“Family glitch” fix makes insurance cheaper for some Hoosiers
Hundreds of thousands of Hoosiers could save an average of $400 annually
Hundreds of thousands of Hoosiers could qualify for cheaper insurance following a fix to the "family glitch." (Getty Images)
Open enrollment on the federal health insurance marketplace will soon have a fix for the “family glitch,” meaning that thousands of previously ineligible Hoosiers may now qualify for cheaper coverage.
The Indiana Department of Insurance (IDOI) didn’t have specific estimates for the number of Hoosiers who might be impacted by the change; an estimated 5.1 million Americans – between 100,000 and 250,000 of those Hoosiers – fell into the family glitch, disproportionately women and children.
IDOI said that primarily middle-income Hoosiers – who earn too much to qualify for Medicaid or other programs – will benefit from the change.
Some Hoosiers might now be eligible when they weren’t before so be sure to check before the enrollment deadline of Dec. 15 at healthcare.gov/.
What is the family glitch?
The family glitch previously barred millions of family members of employees from receiving subsidized health insurance through the Affordable Care Act (ACA) marketplace. Now families of low-income workers will be newly eligible for coverage, potentially reducing premiums for families.
Americans can use the marketplace to supplement or replace employer-sponsored coverage, with subsidies to make it more affordable. For an employer plan, affordability is defined as an employee contribution of 9.5% or less of one’s household income while the marketplace capped contributions at 8.5%.
If an employer offered an affordable plan for covering a single employee, the marketplace wouldn’t offer additional subsidies to cover spouses or children – even if the employer plan for families wasn’t affordable.
As outlined by the Center on Budget and Policy Priorities (CBPP), that regulation “(forced) families to choose between going uninsured or using a large portion of their income to pay for employer-sponsored coverage.”
Most of the 5 million who fell into this category choose the latter option, sometimes spending as much as 22.5% of their income on insurance premiums. These families earned too much to qualify for other insurance programs, such as the Children’s Health Insurance Program and Medicaid.
According to the Kaiser Family Foundation (KFF), whose analysis predates the COVID-19 pandemic, 4.4 million of those in the family glitch, or 85%, enrolled in the unaffordable employer-sponsored health insurance for the family.
“These families are likely spending far more for health insurance coverage than individuals with similar incomes eligible for financial assistance on the ACA Marketplaces and could spend less on premiums if they could enroll in Marketplace plans and qualify for subsidies,” KFF said.
The organization estimated that somewhere between 100,000 and 250,000 Hoosiers were uncovered because of the family glitch.
One estimate, from the Urban Institute, found that families could save $400 on average in premiums by switching to marketplace plans from employer coverage following the change.
Help for Hoosiers navigating plans
CBPP notes that the program will still have hurdles for some families – many of whom will need to decide whether to get a family plan on the marketplace and a separate, employer-sponsored plan for the household’s breadwinner.
To determine the best path for their family, Hoosiers should turn to the state’s system of healthcare navigators.
Indiana has several navigators who can help Hoosiers understand the options available to them but access varies by county. Hoosiers can search for navigators licensed by the Indiana Department of Insurance – including those with Spanish interpreters – on the agency website or by dialing 211 to reach Indiana 2-1-1.
Unlike an organization found via a Google search, these navigators are obligated to provide free, unbiased application assistance for healthcare programs.
Aside from the fix for the family glitch, two other changes under the Inflation Reduction Act could make health insurance more affordable for Hoosiers: more generous subsidies and the removal of income limits that allows benefits to taper off, rather than disappear entirely.
The change comes as hundreds of Hoosiers could lose Medicaid coverage in the “Great Unwinding,” as the nation’s public health emergency ends. Under the public health emergency, states couldn’t un-enroll beneficiaries of insurance programs for low-income Hoosiers, such as the Healthy Indiana Plan or Hoosier Healthwise.
Enrollment in Medicaid increased from 1.4 million before the pandemic to 2.1 million in September – with previous government estimates finding that roughly 75% will remain enrolled following the Great Unwinding. That process will occur over the next year, once the public health emergency expires, and redetermination for beneficiaries will coincide with the first month in which they received coverage.
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