Patient Support & Advocacy

Why doctors are saying good riddance to the ACA’s “family glitch”

Kevin B. O'Reilly , Senior News Editor

What’s the news: President Joe Biden has directed the Treasury Department and the IRS to finally put an end to the much-maligned “family glitch.” The glitch has prevented hundreds of thousands of families from getting financial assistance to buy Affordable Care Act (ACA) marketplace coverage because affordable employer coverage was offered to the worker but not to the worker’s family.

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The White House estimated the move—intended to take effect in January in time for the next health insurance plan year—“would save hundreds of thousands of families hundreds of dollars a month.”

The AMA has long sought the change and touted it as part of its broader plan to cover the uninsured (PDF).

“The family glitch is inconsistent with the goals of the Affordable Care Act and unfairly penalizes family members of lower-income workers,” said AMA President Gerald E. Harmon, MD. “The American Medical Association has repeatedly asked Congress and administrations to fix the glitch, and the Biden administration has made good on its promise to make health care coverage more affordable.”

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Further refinements will cement ACA’s success

Why it’s important: The family glitch has meant that “families of workers remain ineligible for subsidized ACA marketplace coverage even though they face unaffordable premiums for coverage offered through employers,” AMA Executive Vice President and CEO James L. Madara, MD, wrote in a letter last fall to Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure (PDF).

Now, “in determining eligibility for premium tax credits, coverage for family members of an employee is considered to be affordable as long as employee-only coverage is affordable,” Dr. Madara explained, noting that the glitch “leaves many families of workers ineligible to receive premium and cost-sharing subsidies to purchase coverage on health insurance exchanges, even though in reality they would likely have to pay well over 9.83% of their income for family coverage.”

In 2020, the estimated average employee contribution for self-only coverage was $1,243, Dr. Madara’s letter notes. By contrast, the estimated average contribution for family coverage was $5,588. More than half of the 5.1 million people affected by the family glitch are children who don’t quality for the Children’s Health Insurance Program, Dr. Madara’s letter notes.

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Time to nix the “family glitch” and make these other ACA fixes

Learn more: Read this Leadership Viewpoints column by AMA Immediate Past President Susan R. Bailey, MD, for more on why it’s time to nix the family glitch and make these other ACA fixes.

Fixing the ACA’s family glitch is a significant development to strengthen the ACA, but more needs to be done. The AMA has also called for extending the ACA improvements included in the American Rescue Plan that have made coverage much more affordable in the ACA marketplaces, and expanded the eligibility for subsidies to purchase marketplace coverage to more people. If Congress does not extend these provisions, they will expire at the end of this year.