What are the news: President Joe Biden has ordered the Treasury Department and the IRS to finally put an end to the much-maligned “family problem.” The issue prevented hundreds of thousands of families from getting financial assistance to purchase coverage from the ACA market, because affordable employer coverage was available to the worker, but not to their family.
the Esteemed White House The move, which was to take effect in January, in time for the next year of Medicare, “would save hundreds of thousands of families hundreds of dollars a month.”
The AMA has long sought the change and presented it as part of its broader plan for coverage of the uninsured (PDF).
“The family issue is inconsistent with the goals of the Affordable Care Act and unfairly penalizes family members of low-income workers,” said AMA President Gerald E. Harmon, MD. “The American Medical Association has repeatedly called on Congress and administrations to address the issue, and the Biden administration has delivered on its promise to make health care coverage more affordable.”
Why it matters: The family issue has meant that “working families remain ineligible for subsidized ACA market coverage even as they face unaffordable premiums for employer-provided coverage,” wrote the executive vice president and CEO of the AMA, James L. Madara, MD, in allast fall to Chiquita Brooks-LaSure, administrator of the Centers for Medicare & Medicaid Services (PDF).
Now, “in determining eligibility for premium tax credits, coverage for an employee’s family members is considered affordable as long as employee-only coverage is affordable,” Dr. Madara explained, noting that the problem “leaves many working families ineligible”. to receive premiums and cost-sharing subsidies to buy coverage on health insurance exchanges, even though in reality they would probably have to pay well over 9.83% of their income for family coverage.
In 2020, the average estimated employee contribution for stand-alone coverage was $1,243, Dr. Madara’s letter notes. In contrast, the average estimated contribution for family coverage was $5,588. More than half of the 5.1 million people affected by the family problem are children who do not qualify for the children’s health insurance program, Dr. Madara’s letter notes.
Learn more: Read this Leadership Views column by outgoing AMA President Susan R. Bailey, MD, to learn more about why it’s time to fix the family problem and make those other ACA fixes. .
Resolving the ACA family issue is an important development to strengthen the ACA, but there is still much to be done. The AMA also called for extending the ACA enhancements included in the U.S. bailout that made coverage much more affordable in ACA markets and expanded eligibility for grants to purchase market coverage at more people. If Congress does not extend these provisions, they will expire at the end of this year.