The Times opines on the latest hidden surprise in the Not So Affordable Care Act:
Confusing language in the health care reform law has raised the possibility that millions of Americans living on modest incomes may be unable to afford their employers’ family policies and yet fail to qualify for government subsidies to buy their own insurance. This is a bizarre development that undercuts the basic goal of health care reform — to expand the number of insured people and make their coverage affordable.
The people left in the lurch would be those who had lower incomes but were not poor enough to qualify for Medicaid. They would either have to pay more than they could afford for an employer’s family plan or go without health insurance. The problem arises because the reform law quite properly tries to keep people from dropping affordable employment-based coverage and turning to taxpayer-subsidized coverage on new insurance exchanges, starting in 2014. Only those with coverage deemed “unaffordable” by the health care act would be allowed to receive subsidies.
As Robert Pear reported in The Times recently [link], the law considers a worker’s share of the insurance premium unaffordable when it exceeds 9.5 percent of the worker’s household income. But that calculation is based on individual coverage for the worker alone, not family coverage, which is much more expensive. That is how the wording of the law has been interpreted by the Internal Revenue Service and the Congressional Joint Committee on Taxation.
Analysts at the Kaiser Family Foundation, a nonpartisan research organization, estimated that in 2008, 3.9 million nonworking dependents were in families in which the worker could afford individual coverage (costing less than 9.5 percent of household income) but not the family plan, which cost, on average, 14 percent of household income.
Part of the problem is that employers are penalized if they fail to offer "affordable" coverage. Consequently, expanding the definition of "affordable" increases the penalties to which employers (known to Republicans as "job creators" and to Obama as "fat cats") are subject.
Fortunately, the Times has an answer!
Several analysts have suggested a solution that would allow workers’ dependents to buy subsidized coverage, without penalizing the employers. The worker would simply remain covered through the employer, while the rest of the family could get subsidies to buy separate coverage on the exchanges.
The Treasury Department ought to interpret the law to allow such a compromise. It appears to have little or no opposition. Otherwise Congress would have to amend the law. But that seems unlikely at a time when House Republicans are determined to do everything possible to disrupt the health care reform law. Doing nothing would leave vulnerable families out in the cold.
Familes fooish enough to believe Obama's promise that if they liked their health care they could keep it will be in for the old switcheroo.
As to the effect of this expansive interpretation of "affordable" on the CBO score and the budget deficit, well, the Times doesn't ask and I can't tell. But I'm sure they figure someone else is paying for it, so it's all good.