Back in 2014, I wrote about the importance of fixing the family glitch in this Health Affairs policy brief, which I, along with other health policy wonks, thought could be fixed administratively through rule-making. At last, the Biden administration has announced steps to do so with a White House event featuring former President Obama, whose legacy accomplishment was the Affordable Care Act (where the family glitch originated due to a technical error). The Federal Register posted the unpublished rule here, which will be updated when the formal notice of proposed rulemaking (NPRM) is published.
Why has the family glitch been a problem? It has to do with fairness and affordability. Eligibility for financial assistance in the Marketplace is not solely determined by income. It is also subject to whether a family has access to affordable employer-sponsored insurance. The problem is that the definition of “affordable” – for both an individual employee and a family – is currently based only on the cost of individual-only coverage and does not take into consideration the cost of a family plan, which cost nearly three times more on average than self-only coverage.
As a result, hundreds of thousands of families have been unable to afford Marketplace coverage without premium tax credits or are paying the full cost of coverage. According to a statement by the White House, should the proposed rule be finalized, it’s estimated that 200,000 uninsured people would gain coverage, and nearly 1 million Americans would see their coverage become more affordable.
My colleague, Joan Alker and I, noted in our recent paper that the family glitch is one of the barriers that could impede children from transitioning to Marketplace coverage when the current Medicaid continuous coverage protection is lifted. Fixing the family glitch will be particularly impactful in the 17 states, including D.C., that currently use funding from the Children’s Health Insurance Program (CHIP) to cover all children in Medicaid (also known as M-CHIP states). All of those children have been protected from disenrollment during the COVID public health emergency and could lose coverage when states begin to process renewals. Children in states where CHIP income eligibility is low compared to Medicaid could also benefit from fixing the glitch.
Until the NPRM is formally published, we don’t know how long the comment period will be (generally 30 or 60 days). But this is a proposed rule that deserves full support across the health care community. It’s time to treat all families fairly in increasing access to affordable health coverage.