Biden proposes tax credit fix to Affordable Care Act ‘family glitch’ affecting 5 million people

WASHINGTON — President Joe Biden aims to expand access to health care by proposing changes to the Affordable Care Act that would make more people eligible for premium tax credits to buy ACA marketplace plans.

The Treasury Department proposal would allow families to receive tax credits if their coverage costs exceed more than 10 percent of their incomes, a senior administration official told reporters.

The change, scheduled to take effect in January, would allow 200,000 uninsured people to gain coverage and lower premiums for a million others, the official said.

“We think it’s the most significant administrative action to improve the implementation of the ACA,” the official said.

The official declined to say how much it would cost to fix the so-called family glitch or how it would be paid for.

Under the current system, costs for single people on coverage plans are capped at 10 percent of their incomes, but that doesn’t apply to spouses and children who are offered insurance through family members’ jobs. That means those family members are sometimes paying 25 percent or 30 percent of their incomes on health insurance, the official said.

The proposed rule, which will require a lengthy rule-making process before it can take effect, would provide tax credits to extend the 10 percent cap to other family members, thereby eliminating the “family glitch,” according to a White House fact sheet.

The administration added that a finalized rule would lower many families’ premiums by hundreds of dollars a month.

Politico previously reported key aspects of the proposed rule changes.

Since Biden took office, enrollment and coverage through the ACA, commonly known as Obamacare, is at its highest level. The administration has taken steps to boost participation by opening a special enrollment period for people to get coverage during the coronavirus pandemic and by increasing outreach and marketing efforts. Over the winter, 14.5 million people bought ACA marketplace plans, including 6 million newly insured people, the White House said.

In announcing the change, Biden will be joined Tuesday by former President Barack Obama at the White House for the first time since he left office, a White House official said. The celebration of the 2010 health care overhaul will be their first joint appearance since they attended events commemorating the 20th anniversary of the Sept. 11 attacks at Ground Zero in New York last fall, the official said.

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