The Affordable Care Act is failing families on two major issues that need immediate resolution. The employer sponsored health insurance regulation has left many spouses without affordable coverage and household income limits are placing children in Medicaid programs. Together, these two ACA regulations are unfairly fracturing the health insurance coverage for many families and need immediate changes.
Employer sponsored health plans protected
In an effort to protect and support the group health insurance market place the ACA stipulates that if a household member has been offered affordable coverage from their work that can be extended to dependents, then the rest of the household members are not eligible for the tax credits or premium assistance through the federal or state exchange.
No employer contribution for dependents
The first problem with the rule is that it only considers the affordability of the employee only premium, not the dependents. If the employee only premium is less than 9.5% of the household income, then the health insurance is deemed affordable for the rest of the family. A household with a large family where the employer makes no contribution to the dependent coverage can easily realize a health insurance costs of five times the amount of employee contribution.
ACA 9.5% rule
If the employer contributes 100% of the employee’s health insurance premium, then it is impossible for the employee contribution to ever exceed 9.5% because the employee pays nothing for the health plan. But the household may still have to shoulder the cost of the remaining health insurance costs which may top 10% of the household income.
No assistance for group coverage
Usually in situations where the employee has a modest wage the children will qualify for Medicaid as the family income is below 250% of the federal poverty line. But this situation still leaves the spouse without affordable health insurance. I’ve worked with several families where even the full premium of the least expensive Bronze level health insurance plan for the spouse busted the household budget.
Mom cut out of health insurance
The law needs to be changed so that the spouse and children can receive premium assistance through a state or federal exchange even if the other spouse has employee sponsored health insurance. Families are making the hard decision not to purchase health insurance for the spouse and dependents because the health insurance is too expensive.
250% of federal poverty level
The second well intentioned rule has the children of families whose income is below 250% of the federal poverty line automatically enrolled or assigned to Medicaid or Medi-Cal Kids in California. The expanded Medicaid health plans are good insurance plans. The problem arises with keeping the family together and able to all see the family physician.
Can Medicaid support special needs children?
Medicaid has far fewer physicians participating than either the new individual plans or group health insurance plans. Families don’t want to split the household members between different plans with different doctors and providers. This becomes a particularly difficult issue for parents whose children need specialized care current for health challenges. These working families have enough hurdles to jump over and adding the coordination of separate health plans only makes a difficult situation worse. The ACA needs to be changed to either let families’ opt-out of Medicaid for children and take a subsidy for the child’s individual health plan or mandate that all doctors must accept Medicaid reimbursement rates for children.
ACA rules work against families
The promise of affordable health insurance for families is meeting the reality of rules and regulations that are splitting families apart. This is leaving many families with a sour taste in their mouths over the benefits of the ACA. As more people become disillusioned that the promise of the ACA has been distorted by rules that unfairly disadvantage families, more people will be driven to take a second look at the benefits of a single-payer health insurance system. See “ACA plows way for Single-Payer“