Affordable Care Act limits aid to families who can't afford employer's insurance

Credit: KING

Affordable Care Act limits aid to families who can't afford employer's insurance

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by ELISA HAHN / KING 5 News

WCNC.com

Posted on September 25, 2013 at 10:35 AM

A glitch in the Affordable Care Act (ACA) could cost families thousands of dollars in healthcare premiums. The problem impacts some families who are getting health insurance through an employer.

"If you're one of those families, this is going to be a drag,” said Aaron Katz, a health policy expert with University of Washington’s School of Public Health.

Katz says the problem has to do with how "affordable" is defined when it comes to employer-provided coverage.

"To decide whether something is ‘affordable,’ (The IRS) is only going to look at individual coverage. Family coverage can be quite a bit more expensive,” said Katz.

Under the Affordable Care Act, Congress defined "affordable" as 9.5 percent of an employee's household income. So for a family with a $50,000 income, an affordable premium would be $4750.

The problem is that this rule only applies to the insurance premium for the employee. According to a Kaiser Family Foundation 2013 survey, that average is $4,565.

However, the same study revealed the average annual premium for an entire family is about $16,351.

If employer-sponsored coverage is too expensive, families can go to the Exchange for insurance, but according to Katz, they will not qualify for any federal subsidy.

"Push comes to shove, we say we can't afford to buy that coverage,” said Katz. “So you end with a family with a working person covered through the employer and the rest of the family not covered.”

It's contrary to the whole point of the president's healthcare reform plan, which was to make coverage affordable for families.

Congress could fix the problem, but for now, that seems unlikely given the House of Representatives’ latest decision to strip funding from the ACA.

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