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With Obama looking on, White House to open ACA plans to more families

Vice President Harris, President Biden and former president Barack Obama announce changes to the Affordable Care Act on April 5 at the White House. (Demetrius Freeman/The Washington Post)
6 min

President Biden announced Tuesday that his administration is making a tweak to federal rules long sought by advocates that would allow millions of additional families to buy health plans through the insurance marketplaces created under the Affordable Care Act.

The announcement represents Biden’s latest effort to use the ACA as the main fulcrum for his goal of making health insurance more available and affordable to American consumers.

In a piece of political theater to symbolize that point, the current president was accompanied during an East Room event by former president Barack Obama, who was in office when the sweeping health-care law passed a dozen years ago. For Obama, it was his first return visit to the White House since he moved out in 2017 after two terms with Biden as his second-in-command.

The reunion was a Democratic tribute to a law that remains politically polarizing a dozen years after its passage — and a self-congratulatory moment by the 44th and 46th presidents for their respective efforts to alter the nation’s health-care system.

“It’s fitting that the first time you return to the White House,” Biden told his former boss, “is to celebrate a law … that shows hope leads to change. You did that.”

Obama invoked a metaphor he has used before, saying that the 2,000-page law was ″a starter home,” containing gaps that would need to be filled over time in the same way that Social Security and Medicare expanded from their original versions.

“So when President Biden said he was not going to just celebrate the ACA but also announce actions that would make it even better, I had to show up,” the former president said.

The tweak involves what is known in health-policy circles as the ACA’s “family glitch.” It involves who is eligible to buy health plans with federal subsidies through, the federal ACA insurance marketplace that opened in 2014, or similar marketplaces in states that operate their own.

For the most part, those marketplaces are open to U.S. residents who do not have access to health benefits through a job. However, the law also contains a provision that lets people buy ACA health plans even if they have a job that offers health benefits. They can do that if monthly premiums would require them to spend roughly 10 percent or more of their household income on that coverage.

The wrinkle has been that, in calculating how big a bite an employer’s health plan would take out of a worker’s income, the amount has taken into account only the premiums for an individual insurance policy — not a policy that covers a worker’s spouse or children, too.

Under the Obama administration, regulatory officials said those dependents were not eligible for a federal subsidy to help pay for an ACA health plan, even when family coverage through an employer’s health benefit costs far more than the law says is affordable.

During a briefing for reporters Monday evening to preview Biden’s announcement, senior administration officials said the Treasury Department, which handles ACA subsidies because they are in the form of a tax credit, is proposing a rewrite of the ACA’s rules so that the cost of job-based coverage for an entire family is taken into account.

Assuming the proposed tweak completes the federal regulatory process, the change will begin Jan. 1 next year, according to the officials, who spoke on the condition of anonymity before Biden announced it.

Slightly more than 5 million people nationwide are affected by the family glitch, according to estimates last year by the Kaiser Family Foundation, a health-policy research group. Most are children and women, Kaiser found.

The White House estimates that perhaps 1 million people will switch to ACA health plans if the rules change, while many others will keep their job-based health benefits, even if they cost more. And an estimated 200,000 uninsured people will gain coverage, the administration officials said.

“Once today’s proposed rule is finalized, working families will get the help they need to get full family coverage,” Biden said. “Everyone in the family.”

Tuesday’s proposal drew praise from the health insurance industry’s main trade group, AHIP, as well as from the American Hospital Association and the American Medical Association.

Larry Levitt, Kaiser’s executive vice president for health policy, said, “Fixing the family glitch is the single most significant step the Biden administration can take to improve affordability under the ACA without Congress. And Congress has not exactly been moving with lightning speed lately.”

Biden gave another plug for elements of his health-care agenda that have stalled on Capitol Hill. Congressional Democrats, who hold slender majorities in the House and Senate, have not amassed enough votes even within their own party to pass broad social policy legislation known by Biden and other proponents as the Build Back Better Act.

Part of that legislation would make marketplace health plans available at little or no cost for low-income people in a dozen states that have not expanded Medicaid under the ACA. The stalled legislation would also try to ease the nation’s expenses for prescription drugs by allowing Medicare, the federal insurance system for older Americans, to negotiate prices directly with drug manufacturers.

“Look, folks, we need to keep up the fight,” the president said. He blamed Republicans — rather than a few dissident Democrats — for thwarting such goals.

In the absence of such legislative accomplishments, Biden is striving to draw attention to changes he can make through his own powers. He also issued an executive order Tuesday that is a sequel to one he signed when he came into office that directed federal agencies to do what they could to strengthen Medicaid and the ACA.

Under the new order, Biden directs agencies to “continue doing everything in their power to expand affordable, quality health coverage.” The order does not spell out specific steps. But it says in broad strokes that the government should help people get and keep coverage, understand their insurance choices and connect with health services when they need them.

After Biden stepped over to a small desk with the presidential seal to sign the order, he looked over his shoulder and handed Obama the pen.