Rep. Angie Craig takes aim at ‘family glitch’ that can make health insurance super pricey
The glitch is basically this: The ACA was written so no one would be forced to pay more than 9.83% of their income for health coverage — a figure deemed affordable. Anything more than that merits a subsidy. It works for single people. And it works for any parent. But not for the rest of the family.
ST. PAUL — For an estimated 62,000 Minnesotans, the only health insurance they can buy is deemed unaffordable by the federal government — but the federal government refuses to subsidize them.
Allie Krueger is one of those people. Right now, Krueger and her husband are paying 25% of their gross income for health insurance for them and their 2-year-old child — and she’s pregnant with twins.
“I was shocked,” Krueger said in an interview, recalling how she discovered the glitch to her disbelief after she was laid off from her job of 16 years in the entertainment industry, a sector hit especially hard during the pandemic.
Krueger and her family are caught in what’s known in the health insurance world as the “family glitch” of the Affordable Care Act, whose title serves as an irony for the bureaucratic hole that could encompass more than 5 million Americans. There’s a push to address the issue, and it might be as simple as a stroke of the pen by someone in the Biden administration.
The glitch is basically this: The ACA was written so no one would be forced to pay more than 9.83% of their income for health coverage — a figure deemed affordable. Anything more than that merits a subsidy. It works for single people. And it works for any parent.
But not for the rest of the family.
So right now, Krueger’s family is being insured through her husband’s employer. He gets the subsidy, but she doesn’t. Nor does their child. And nor will the twins, one of whom, doctors have told them, will likely require surgery because of a condition the baby appears to have. (Because family insurance is available through his employer, they’re not eligible to buy insurance on the individual market, and they earn too much to qualify for government programs for the poor.)
“We can’t afford to be insured and we can’t afford not to be insured,” she said.
U.S. Rep. Angie Craig, D-Minn., said that’s not the way it’s supposed to be.
“This was never the intention under the Affordable Care Act,” Craig said in an interview. “It was never the intention of Congress that it would be just 9.83% for just one family member. It should never be 25% of a family’s income. It’s ridiculous.”
The glitch actually dates back to an IRS interpretation of the ACA in 2013 — while President Barack Obama, the champion of the ACA, aka “Obamacare,” was in office.
It appears to have festered ever since, slowly gaining attention that was accelerated under the coronavirus pandemic as legions of the employed were suddenly thrust into the ranks of the unemployed — and potentially uninsured.
Craig said she had heard about the phenomenon over the years, but only in the abstract, until Krueger contacted her office.
“As we worked our way through this one individual story, all of a sudden this ‘family glitch’ idea that I had read about over the years had a name and was pregnant with twins,” Craig said. “I paid a lot more attention.”
After President Joe Biden took office, he issued an executive order requiring all federal agencies to examine policies they might have that can be altered to increase the affordability of health care. Some see that as a means by which the IRS changes its interpretation.
Craig is among them and is pushing the White House to make the change.
In a letter earlier this month to Treasury Secretary Janet Yellen, Craig urges “swift action.”
“I’m optimistic,” Craig said. “The administration is open-minded about it.”
According to an analysis by the Congressional Budget Office, closing the glitch — by providing subsidies to all family members covered — would cost $45 billion over the next 10 years.
For Craig, it’s a no-brainer. “The cost would be dwarfed by the savings to American families,” she said.
According to an April analysis by the Kaiser Family Foundation using pre-pandemic data, most people who fall into the family glitch are paying for insurance — and spending an average of 15.8 percent of their gross income. But close to 10 percent ultimately decide to forego insurance completely. Because of the nature of the glitch, the vast majority of people affected are full-time workers and earn too much to qualify for assistance programs for the poor.
Krueger said she and her husband have been able to pay for the premiums — by draining their savings.
“We’re hanging in there, but we are privileged because we have a built-up savings,” she said. “We’re in our 30s. We’re non-smokers. We’re just a typical family. It’s my hope that we get that glitch closed so other people don’t have to go through what we’re going through.”