A glitch hidden in one of Obamacare’s 10,000 pages of rules could increase some families’ health insurance costs by thousands of dollars and leave children uncovered.
To qualify as “affordable” under the federal health care law, employer-provided health insurance must cost no more than 9.5 percent of the employee’s salary. Otherwise, the individual is eligible to receive subsidies for the purchase of health insurance through the Obamacare exchanges instead.
But this measure applies only to individual employees, not families. The result will be a drastic cost increase in cases where affordable employer-provided insurance doesn’t cover the whole family.
Though this is raising tensions a week before the Obamacare exchanges’ launch date, the problem is not new. Two years ago, The Daily Caller reported on a National Bureau of Economic Research study revealing that the government had restricted subsidy calculations to include just the employed individual, not all family members potentially covered by an insurance plan. (RELATED: Researchers: Obamacare cost estimates hide up to $50 billion per year)
Former President Bill Clinton raised the problem in a recent speech and called the increasing family cost an “unintended consequence,” but the change was deliberate.
The problem appears to stem from the Joint Committee on Taxation’s 2010 decision to change language referring to “individual or family coverage” to “self-only” insurance instead.
In an effort to keep down Obamacare’s ballooning costs — making the change saved an estimated $50 billion per year from the final Affordable Care Act cost estimates — Congress decided only one spouse’s health insurance costs would figure into the calculation of what’s “affordable” for a family.
The result may be that some families end up footing the bill. USA Today reported that some families could see thousands more in premiums each year and as many as 500,000 children could go uninsured.
A legislative fix — currently seen as unlikely due to the ongoing congressional showdown over Obamacare — might increase the cost of subsidies to taxpayers.
As the law is rolled out, premiums are expected to rise in many states and the Obama administration will conduct outreach to help people who are eligible for subsidies or programs like Medicaid learn how to sign up.
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