Short Takes On News & Events

Some Families Will Be Ineligible For Insurance Subsidies Under Final Rule

By Julie Appleby

January 30th, 2013, 2:23 PM

Some families with costly job-based health coverage may be ineligible for federal subsidies to help them buy less expensive coverage through new online insurance markets, under final rules released Wednesday by the IRS.

The two rules, published by the Treasury Department here and here, uphold earlier proposals outlining what is considered affordable, employer-sponsored coverage.

Under the federal health law, low and moderate-income workers with job-based coverage that is deemed unaffordable can opt out of that and turn to new marketplaces, called exchanges, to buy coverage with government subsidies.

But the rule defines the standard for affordability more narrowly than most consumer groups had hoped — as an amount less than 9.5 percent of household income to cover just that employee’s share of premium costs, not on what he or she must pay to cover their entire family, which is generally more expensive.

Consumer groups had hoped to sway the IRS to base the affordability threshold on the cost of a family plan, saying the rules could prevent some children and spouses from getting coverage. A July report from the U.S. Government Accountability Office estimated that a small percentage of uninsured children — 6.6 percent of the total, or at least 460,000 — may be shut out because of how the government proposed to define affordable coverage.

“It doesn’t make sense to test the affordability of children’s coverage by looking at the cost of covering one person, the employee,” said Joe Touschner, senior health policy analyst at Georgetown University’s Center for Children and Families. More than 100 groups, including the March of Dimes, the American Academy of Family Physicians and the Children’s Defense Fund, had signed a letter to Treasury making that argument.

Touschner acknowledged that if the IRS had used the cost of family coverage as the threshold it would have boosted the cost of the law because more people would become eligible for subsidies.

Supporters of the rule, among them employer groups and insurance brokers, say it closely follows the wording in the law and will be easier to administer.

The final rules also outline exemptions to the federal law’s rule requiring most Americans to carry health insurance coverage, including not being able to afford coverage.

The exchanges and subsidies, as well as the requirement that most Americans carry insurance, go into effect on Jan. 1, 2014.

18 Responses to “Some Families Will Be Ineligible For Insurance Subsidies Under Final Rule”

  1. Bob says:

    Can someone please answer the question that Congress gets paid by the health insurance lobby to ignore? What purpose does health insurance serve except to collect money from consumers, pass the money along to providers and skim a significant margin off the top for themselves?

  2. Katherine says:

    Please consider the very small “profit” or margin experienced by most carriers. The problem is more complex than your question. Charges at hospitals and physicians’ offices should be transparent and “leveled”, and fees/discounts on services should be the same – no matter the insurance company (no “favorite nation” clauses). The hospitals have to offset indigent care since the Act of 1986, however, they do not need to perform every service and have multiple cranes looming overhead either.

  3. Not Bob says:

    Bob, you can answer your own question by considering this:

    For what reasons do you not go without health insurance and pay the providers yourself?

  4. Killroy71 says:

    The headline and article assume there will be more affordable coverage for families on the exchanges than the coverage they get at work. That seems unlikely, given that group coverage is typically more affordable than individually purchased coverage.

    And believe me, folks, when you see the premium prices on the exchange policies, with their ACA-mandated essential health benefits, you will realize that calling it the “affordable” care act was all about spin.

  5. Bob says:

    Dearest Not Bob,

    To you question…

    “For what reasons do you not go without health insurance and pay the providers yourself?”

    Fact is, I do go without health insurance. I’m one of those fortunate 50 million people that get my care at the hospital ER and then watch your premiums go up to pay for it. Fact is, I pay nothing! Never!

  6. Lance says:

    And nothing, not even Obamacare, will force Bob to get his healthcare any other way. Living under the radar has fantastic benefits. By Congress allowing the outsourcing of jobs to 3rd world countries, that is exactly the culture of the future. When Republicans in Congress promote the practice of cannibalism with regard to historically sound corporations by corrupt venture capitalists, what more can we expect. The jobs are gone, never to return. What’s left? Poorly paying jobs with no healthcare benefits. What we will see is a growing healthcare system that centers itself around random visits to the emergency room. Like more and more Americans, Bob has broken the code. Bob gets it! Bob has adapted! Those of us that still play the stupid game and continue to pay for our healthcare are the real dopes. Meanwhile, Bob has it all figured out.

  7. David says:

    Oh dear! Emergency Room care is certainly an option, but as a parent who has taken a child to the Emergency Room on a Saturday night, it is an extremely poor option. I had no choice due to the nature of the injury but to go at this time. The other parents there, holding sick children, many with ailments that could have been prevented, was sad to see. Triage will have your child waiting to be seen while the knife & gun injuries and drunks from car crashes and drug overdoeses to be seen and treated before you child gets care. Yes, this person may have ‘broken the code, but the price is too high for any parent who has better choices.

  8. There is an entire population out there waiting for their free health insurance. A family of 4 making $90,000 per year will be charged $743.00 per month for their “subsidized” coverage. That payment will be debited form their checking account before the pay the rent. After all the misinformation put out by this administration, this will come as a complete shock. Here is my prediction: Americans wiil be marching in the streets by March of 2014. The day light will have dawned, that the 1 % is not going to give them Healthcare (as they call it) and neither is Obama.

  9. Rachael says:

    If there was ever an attempt at misinformation, the previous post takes the prize! No doubt, she is a Republican. What’s next? More hate speech about death panels?

  10. The very best premium calculator is on this very site. Look it up for yourself. Remember that the subsidized premium will only cover 70% of your healthcare costs and will not pay that, until the patient has paid the poiclies deductible. There will be copays for drug and doctor visits that come out of the patients pocket also. Yes, in 2700 pages, you bury lots of little surprises.

    Ask Kaiser yourself.


    This is Kaiser’s own Premium Calculator… Try it out!

  12. John Mitchell says:

    It is a shame that this law was rushed through as it was. We in the self-funded industry had hoped there would actually be some improvement to the system when all was said and done. Our focus is on the actual cost of healthcare and not a shell game played upon who pays for it. We have also long been aware of glaring deficits in the legislation, regulation writing and implementation. But, I suppose we should be getting used to deficits by now.

    Wake up Americans. This law does not have a chance of doing anything positive for us individually or culturally. Remember, our government is US, not THEM.

  13. Lance says:

    Rachael, you are correct. I’ve fact-checked the claims. Twisted truth at best. Mostly spin. More GOP talking points and hate speech. These clowns will do and say anything to try to destroy the Affordable Care Act (ACA). Fact is, the ACA is a small start and begins to put us on a road to universal single-payer healthcare in the future. There’s coming a time when we will not be spending twice as much for a healthcare system that excludes nearly 60 million citizens.

  14. Allen says:

    I’m old enough to remember the outrageous fight they had in Congress about Social Security (SS) back in the 1930′s. I watched the Republican naysayers in Congress telling everyone that SS will bring about the end of America. They said the exact same thing in 1965 about Medicare. The Congress was filled with Chicken Little Republicans telling us to take cover, the sky is falling! Like SS, Medicare was going to turn America into a 3rd world nation. Same is true for Medicaid. The end of the world! We hear the same thing from members of Congress like Paul Ryan. Still wet behind those big ears, Ryan, a high school prom king, tells us he’s the expert about fiscal issues. He knows everything about economics. Just ask him! Fact is, without SS, Ryan’s family would have suffered greatly. After Ryan’s father died, Paul gladly accepted the SS benefits that helped put him through college. Ryan went to “Oxford”. Not the Oxford in the United Kingdom. Ryan majored in economics at Miami University in Oxford, OHIO! Ryan’s heros were Milton Friedman and Ayn Rand. Need I say more about his extreme positions on economics? Ryan received a B.A. in 1992 with a double major in economics and political science. A bachelor’s degree degree! A bachelor’s degree makes Ryan an economic expert? Give me a break!

  15. Dennis Brebner says:

    I am not old enough to remember SS back in the 1930′s but do recall the fights over great society programs Medicare and Medicaid. The post from Alan is a rant about the Republicans opposition to these programs that it would end America. We now are basically bankrupt with 16 trillion in debt a flat economy and intractable high employment, falling incomes, rising gas prices, and most recently news that the economy did not grow the last two quarters of last year. The huge costs of the so called entitlement programs is by agreement from both the Republicans and the Democrats unsustainable. More importantly every other reputable group or individual looking at it has also agreed. The laws that have been passed on the so called reforms are a great example of liberal insantity. Beside the 2700 page ACA we have 800 plus page in Dodd Frank. plus tens of thousands of pages of regulations. The recent regs were published on the Hitech HIPPA section and it is 560 some pages. I would say that the assessment of the Republicans about these programs destroying America were spot on just the time frame was off. Most important the Country is divided more so than at any time since the civil war. We may see the out break of violence on a large scale because the two view points are so far apart and unlikely to be resolved. Obama is also the most divisive President since the Civil War and shows no interest in bringing the Country together.

  16. John Mitchell says:

    Wow. I can’t believe how most of you miss the details of this legislation. Especially you, Ryan. All reasonal estimates indicate that the legislation will increase the actual cost of healthcare for individuals by a signifianct amount. More disturbing is that our federal government might have to take the whole thing over after this grand project fails. Have you seen how irresponsible our elected officials have been with the management of our country? Do you want these people to have control of another 15% or more of your life?

    On a technical note, are you aware that the feds have now decided that coverage under Medicare A constitutes Essential Benefits? That is absolutely crazy and demonstrates their stupidity.

  17. kelly says:

    Dennis and John,

    Let me guess…

    You are both Republicans, right?

    Tea Party?

  18. perry says:

    Obamacare is not completely unwrapped yet and is still in the process of rolling out. Yet, seniors are already seeing the great benefits. Young people are enjoying those benefits too. Seniors are now enjoying the closing of the donut hole and are enjoying preventive diagnostic services that are completely covered. Regarding our youth, kids are now worry free to complete college or begin a career while they remain on their parent’s health plan. All reasonable estimates are that at least 30 million more Americans will have comprehensive, accessible and affordable healthcare coverage beginning in 2014. All of this is happening as we speak and yet we still have the Republican Obamacare hating naysayers. They have absolutely nothing to base their assertions upon except wild speculation. Is it perfect? Nobody is saying Obamacare is perfect. It’s a beginning. A beginning that Republicans are hell bent to destroy just to score political points. What’s the Republican alternative? The Heritage Foundation was their answer back in the 1990′s. The Heritage Foundation invented the individual mandate. GOP Governor Mitt Romney liked the Heritage Foundation mandate so much, got it successfully enacted in Massachusetts. In case you didn’t know, Massachusetts mandated healthcare is working! Obama liked what Romney did in Massachusetts so much, he hired the same people to come to Washington DC and help create the Affordable Care Act. Now, because Obama got it done, Republicans say their very own Heritage Foundation mandate idea is no longer a good idea. The same idea that the Supreme Court upheld. Republicans? Morons? You bet!