President Biden will try to bolster Obamacare by fixing its “family glitch” as he celebrates the program Tuesday with former President Barack Obama and cajoles Congress to extend supersized subsidies that fueled record enrollment but will expire after this year.
Mr. Biden will outline efforts to shore up the 2010 Affordable Care Act in a public event with Mr. Obama, who is visiting the White House for the first time since leaving office five years ago. They will point to their signature health program as an example of how the government “can work for people,” White House press secretary Jen Psaki said.
Senior administration officials said the Treasury Department will issue a proposed rule that impacts people who are typically shut out of the Affordable Care Act’s insurance exchanges if they are offered coverage by an employer.
An individual can access the exchanges and subsidies that defray premiums if the cost of employer-based coverage exceeds about 10% of his or her income, but that provision doesn’t take into account the cost to cover dependents. The new rule will allow a person to enter the Obamacare exchange and qualify for subsidies if the cost of coverage for the entire family exceeds about 10% of household income, instead of pegging the threshold to the employee’s coverage alone.
The new rule will apply that affordability standard to the whole family instead of the employee alone, so spouses or children who lift the cost of premium contributions above 10% of income can seek subsidized insurance under Obamacare.
“In the family glitch, a lot of these people have insurance, they’re just paying a lot of money for that insurance. What this would do is give them the option to move some of their family members” into the exchanges, said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its program on the health care law.
Administration officials said the family glitch impacts about 5 million people in the U.S. They estimated that 200,000 will tap into Obamacare coverage in the next enrollment period due to the change.
Ms. Cox said some families might prefer to remain in a unified, pricey employer plan because the Treasury’s proposed rule will likely allow dependents to flow into the exchanges but not the actual employee with company coverage that is deemed affordable under the law. Families might want to retain a joint deductible or out-of-pocket maximum under one plan, or coverage that applies to one set of doctors.
The administration could not provide an estimate of how much the change might cost taxpayers in terms of new subsidy payments, or how it would be paid for, though highlighted the change as a significant one.
“To borrow a phrase, this rule is a big deal,” an official said.
Mr. Biden famously called the Affordable Care Act “a big f—-ing deal” when, as vice president, he looked on while Mr. Obama signed his signature domestic effort into law in March 2010.
The program stumbled out of the gate with a faulty website and wobbly economics. Premiums skyrocketed because fewer than expected healthy persons signed up for insurance while sicker persons flooded the market because insurers, under the law, had to accept persons with preexisting medical conditions and could not charge them more.
Since then, Obamacare has survived three near-fatal showdowns before the Supreme Court and a 2017 attempt by then-President Trump and GOP lawmakers to repeal and replace the law.
Mr. Biden reopened enrollment in the exchanges that offer private insurance and income-based subsidies for much of 2021, citing the impact of the coronavirus pandemic. Democrats also made the subsidies more generous, resulting in a record-high 14.5 million Americans signing up for the current plan year.
The enhanced subsidies only last until the end of the year, however. Mr. Biden’s massive social welfare plan would extend the subsidy enhancement through 2025, but the broader package ran into opposition from centrist senators, forcing him to try and muscle crucial parts of the legislation through Congress instead.
Senior administration officials said they couldn’t preview talks with Congress, but the president has been clear about the need to extend the beefed-up subsidies.
“We looking forward to getting it done,” an official said.
Beyond the exchanges, nearly 19 million more Americans gained coverage under Obamacare’s expansion of Medicaid insurance for the poor. All but a dozen states have tapped into federal matching funds that pay for much of the cost of covering the expansion population.
Mr. Biden is expected to tout this portion of the law, which experts have described as the quiet workhorse of the program even as the private-insurance portals generate most of the headlines and legal disputes.
In states like Texas and Florida, which have declined to expand Medicaid, some Americans are caught in the so-called “coverage gap” because they earn too much to qualify for Medicaid but below the poverty level — the threshold needed to qualify for Obamacare subsidies.
Mr. Biden has proposed ways to smooth over the gap by offering to put these people in a form of Obamacare-exchange coverage with low costs, though he’s pressing Congress to pass that provision as part of his Build Back Better agenda, leaving the family glitch as something he could tackle as part of his celebration with his former boss.
Mr. Biden and Mr. Obama also plan to have lunch together Tuesday — just like old times.
“They are real friends, not just Washington friends,” Ms. Psaki said.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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