Study: Obamacare ‘Family Glitch’ Could Hit Up To 2 Million People

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Close to 2 million Americans could be restricted from Obamacare’s coverage expansions due to the health-care law’s so-called “family glitch,” according to a study from the American Action Forum. 

Obamacare has expanded eligibility to Medicaid in 27 states and Washington, D.C., and the health-care exchanges offer subsidies and coverage to those who aren’t offered affordable, employer-based coverage nationwide.

The “family glitch,” instituted by an IRS ruling, occurs when an employer offers individual coverage through that Obamacare regulations deem affordable (less than 9.5 percent of their income), but doesn’t extend it to their workers’ spouses or children.

The IRS requires this “affordable” coverage only for individuals — meaning that when workers’ families aren’t offered affordable coverage, they’re not eligible for exchange or Medicaid coverage instead.

According to the American Action Forum, a right-leaning think tank headed by former Congressional Budget Office director Douglas Holtz-Eakin, close to 2 million Americans fall into this coverage gap.

The AAF study found that this year alone, up to 428,000 women, 519,00 men, and a whopping 984,000 children could be left uninsured as a result. If Congress doesn’t reauthorize funding for the Children’s Health Insurance Program (CHIP) in the fall, another 2.28 million children will be at risk as well.

For the millions of Americans that are facing these problems, the only real solutions are not exactly attractive. AAF notes that legal separation and refusing to get married to start out with, are options for establishing Medicaid eligibility, if those with expensive conditions truly need coverage.

The number of Americans affected by the glitch “will likely increase as the employer mandate goes into effect,” according to study authors Brittany La Couture and Conor Ryan. Employers are increasingly hard put-upon by growing health care costs and will soon have a new swath of Obamacare-related taxes on their health benefits to deal with.

Some have already responded to the health-care law by eliminating benefits for spouses, which could make the glitch even worse. For one, UPS sparked controversy by cutting spouses from health insurance offerings last year.

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