The Affordable Care Act Still Not Affordable for Families
An Obama Administration ruling yesterday saved the federal government more than $500 billion. But it did so interpreting the new law in a way that will cause families to pay a fine if they do not pay premiums for employer-provided health insurance that could equal a tenth of their income or more. The Affordable Care Act makes workers eligible for taxpayer-subsidized coverage in the health insurance exchange if their employee health plan premiums exceed 9.5% of their income. Advocates for the poor had assumed families were also eligible for taxpayer-subsidized family coverage in the exchange if employer plan family premiums exceed 9.5% of family income. We wrote about this here. If the Treasury took the more broad interpretation, the cost to taxpayers would approach nearly $60 billion extra per year.
HT: Avik Roy writing for Forbes.
Isn’t this interesting. And of course we all know what is going to happen. Either the mandate will be dropped or there will be enormous pressure to spend another $500 billion.
This is a time bomb.
I’m rather surprised that the Treasury and HHS made that narrow of a ruling. There will be immense pressure to reverse and allow families to enroll in the exchange if their premiums exceed 9.5% of income. Yet, if allowed, the employer market would probably shrink by half over the course of the next two decades.
Bruce, I’m with you.
Why hasn’t this matter been reported on by the major news papers? The only coverage I’ve read about it outside of wonky healthcare policy blogs was in the Hill News paper.
What’s another $60 billion when we’ve already got unfunded liabilities in the trillions?
I’ve been reading “The Big Short” right now, and it just occurred to me that maybe Lewis’ next book will have to be about the demise of American health care.
It’s reasonable to expect that the poverty industry will litigate this ruling, or that the Administration would change it unilaterally. However, it wouldn’t do that until after the 2012 elections, so the costs don’t become a campaign issue. In which case, taxpayer groups might litigate!
Once again, the Administration is hoisted on its own petard.
I wonder if employers could also game this. That is, could employer make employee coverage artificially cheap and spouse/dependant coverage artificially expensive, in order to dodge penalty, but still be “unaffordable” in aggregate?