An Affordable Care Act rule known as the "affordability firewall" penalizes families for having employer access despite the fact that their household income would make them eligible for subsidies for marketplace plans, according to a post on the Commonwealth Fund blog.
The post explains that a family that is covered by an employer plan pays, on average, $4,955 annually for coverage, while a family that is covered by a subsidized plan in the marketplace will pay $3,075. That's a savings of almost $2,000 each year, with both families having the same number of members and the same income.
Many officials want to modify the affordability firewall, saying that would "allow dependents to receive subsidies--but not the worker--when the family employer premium contribution exceeds 9.56 percent of the worker's household income," the post says.
Following that model, the Commonwealth Fund predicts that 2.3 million individuals who are not currently eligible for subsidies because of the firewall would become eligible and enroll in subsidized coverage in the individual marketplaces. Additionally, by spending about $1,700 per newly subsidized individual, the government would extend insurance to another 700,000 people and substantially reduce healthcare spending for 1.6 million individuals who are insured but face high healthcare costs.
Still, the post points out that such a policy change would increase federal spending by $3.9 billion relative to what the government is expected to spend under current ACA policy.
It's no secret that cost has been an issue for marketplace enrollees. While employer-based coverage is getting more expensive for families, individuals enrolled through the Affordable Care Act marketplaces also struggle with costs. Still, many people who qualify for subsidies don't access them; as many as 2.2 million Americans don't know that they are eligible to take advantage of federal assistance in their health insurance needs, a previous report found.
To learn more:
- read the Commonwealth Fund blog post