A change in the way the Internal Revenue Service interprets the Affordable Care Act was announced this week and will apparently expand access to low cost health insurance for thousands of Massachusetts families.
“Health care should be a right, not a privilege. But for many Americans caught in the so-called ‘family glitch,’ the peace of mind that health insurance brings has remained out of reach,” President Biden explained Tuesday.
At issue is the interpretation of the Affordable Care Act, the healthcare law passed under then President Barack Obama, though which eligibility for subsidized care was determined by how much of an employee’s pay insurance could cost while still “affordable.”
Employer provided plans costing less than about 9.5% of employee’s pay, as the law has been interpreted, were deemed affordable and an employee offered such a plan would not be eligible for help paying their insurance bills.
This may be fine for most single payers, but for those with families insured through their work, the price of insurance may represent a far, sometimes unaffordable, percentage of a worker’s pay, a cost that has not been considered by the government when doling out subsidies.
“Because of this glitch, employer-based health insurance has been considered “affordable” if the coverage is affordable for the employee even if it is not for their family members—making those family members ineligible for Affordable Care Act subsidies even though they need them to afford quality coverage,” Biden said.
The president proposed a fix in April. On Tuesday, the IRS published their new rules, which will consider the whole cost of health insurance premiums for families when determining eligibility for Affordable Care Act subsidized plans.
“Starting next month, Americans can sign up to take advantage of this change. About 1 million Americans will either gain coverage or see their insurance become more affordable as a result of the new rule,” Biden said.
Affordable Care Act open enrollment for 2023 begins on November 1 and runs through December 15.
According to Amy Rosenthal, executive director of Health Care For All Massachusetts, tens of thousands more Bay Staters now qualify.
“44,000 Massachusetts residents will now be eligible for affordable and accessible health care that they were entitled to under the Affordable Care Act,” Rosenthal said.