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The so-called “family glitch” is one of the persistent deficiencies in the Affordable Care Act. Under the ACA, people with access to employer-sponsored health coverage only qualify for subsidies to help them buy Marketplace health insurance if premiums for their employer plan are unaffordable (i.e., above 9.83% of household income). Affordability, however, is measured against the cost of individual coverage. This means that family members are ineligible for subsidized ACA coverage if one parent has an offer of affordable employer-sponsored single coverage, even when the employee’s cost to cover additional family members is not affordable. Because of the family glitch, an estimated 5.1 million Americans – mostly children of low-income workers – can’t access subsidized Marketplace health insurance. Affected families face the choice of remaining uninsured, or enrolling in employer plans that may cost 25% or more of family income. Patient groups (including HFA), state insurance regulators, and health policy experts have long sought a fix for the family glitch.

On April 5, 2022, the Biden Administration issued a proposed rule to eliminate the family glitch. If the rule is finalized, family members of workers who are offered affordable self-only coverage – but unaffordable family coverage – will be able to qualify for ACA subsidies. The Administration forecasts that 200,000 uninsured people would thereby gain coverage, and nearly 1 million Americans would see their coverage become more affordable. If finalized, the proposed rule would take effect before the open enrollment period for 2023 coverage.

Quick Hits:

  • On April 12, U.S. Health and Human Services Secretary Xavier Becerra renewed the official determination that COVID-19 constitutes a national public health emergency. The renewal means that waivers allowing for expanded telehealth services, enhanced federal funding for Medicaid, and a pause on Medicaid disenrollments will continue at least through July 2022.
  • On April 28, HHS issued its annual Notice of Benefit and Payment Parameters governing aspects of health insurer operations in the upcoming plan year. The NBPP is a vehicle by which HHS could rein in insurers’ use of copay accumulator adjuster programs (CAAPs) – but, despite requests from HFA and other patient groups, HHS once again chose not to address this harmful insurer practice. While HFA applauds other policies contained in the 2023 NBPP (standard plans, nondiscrimination in pharmacy benefit design), we are disappointed that the rule fails to protect patients who rely on copay assistance. HFA will continue to advocate for federal as well as state protections against copay accumulator adjusters.
  • At a White House event on April 11, Secretary Becerra announced new efforts to ease the burden of medical debt and protect consumers. The Administration is directing agencies to eliminate the use of medical debt as a qualification for participating in federal credit programs.
  • The U.S. Centers for Medicare & Medicaid Services proposed a rule to shorten waiting periods for certain Medicare enrollees. Currently, individuals who sign up for Medicare coverage after the date on which they first become eligible may have to wait several months before their coverage becomes effective. CMS’s proposed rule, if finalized, would make Medicare coverage effective the month after enrollment for individuals who sign up during the last three months of their “initial enrollment period” or during the annual general enrollment period, thereby reducing gaps in coverage.
  • In Medicaid waiver litigation news, the U.S. Supreme Court returned a case overturning Medicaid work requirements to the circuit court. The work requirement waivers at issue, approved by the Trump Administration, had been rescinded by the Biden Administration, so the case is now moot. Separately, CMS abandoned its effort (and related legal battle) to rescind an uncompensated care Medicaid waiver granted to Texas in the final days of the Trump Administration.
  • A new report from the Urban Institute found that average benchmark premiums in the ACA Marketplaces declined for the third straight year in 2022. The 1.8 percent decrease is roughly the same as 2021, but less than the 3.2 percent decline in 2020. Benchmark premiums (for the silver tier plans to which premium tax credits are based) ranged widely by state. Lower premiums were generally found in states with more insurers; Medicaid expansion states; states that offer a reinsurance program for exceptionally high-cost claims; and/or states that operate their own Marketplaces.
  • The Maine legislature passed a bill that, if signed by the governor, would make the state the 14th to prohibit harmful copay accumulator adjusters. Comparable legislation remains pending in about a half dozen states, including Ohio and New York where they have passed at least one chamber.  Among the states with existing laws prohibiting CAAPs, Illinois and Virginia updated their laws this month to create a “savings clause” protecting consumers in high-deductible health plans from outdated IRS guidance that prevented CAAP protections from applying until after they satisfied their deductible.  R. 5801, a federal bill that would extend protections from copay accumulators to all health plans (not just those that are state-regulated), has 32 cosponsors but has yet to advance in Congress.

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