The glitch means families end up paying higher and less affordable premiums for work-based health insurance — or skipping coverage altogether.
According to the Urban Institute’s analysis, about 90 percent of people affected by the outage purchase coverage that is considered prohibitive. In other words, while most people affected by the outage are signing up for coverage rather than being uninsured, “they’re paying through the nose,” Ms Keith said.
Once the outage is resolved, the cost of employment-based coverage should be considered affordable for the entire family. If coverage was not affordable, the rest of the family — except the insured employee — would then be eligible to shop the exchanges and use tax credits to lower their premiums.
The solution isn’t perfect, says Cynthia Cox, director of Kaiser’s Program on the Affordable Care Act. If the workplace plan is affordable for the employee—say, the mother in the family—she should sign up for that plan, while her husband and children sought cheaper market coverage. That would mean paying two separate premiums and paying two deductibles, which might not be more affordable, and you might have to navigate two carrier networks.
That’s partly why, while an estimated five million people will be affected by the outage, far fewer people are likely to benefit from the newly available tax credits. The Urban Institute estimated that 710,000 more people would enroll in market coverage with tax credits. Another 90,000 — mostly children — would enroll for coverage through government plans like Medicaid and the Children’s Health Insurance Program, because the Obamacare marketplace automatically checks for eligibility.
The Biden administration estimates that 200,000 uninsured people will receive health coverage, and nearly a million will have more affordable coverage under the proposed solution.
The proposal comes as the expanded health insurance subsidies offered to Americans during the Covid-19 pandemic will expire. The pandemic aid, which temporarily made it easier for people to get affordable coverage in government markets, was approved until 2022. To extend the aid or make it permanent, Congress must take action. If the extra aid continues, solving the family breakdown would lead to even greater savings for families, according to an analysis by Third Way.