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The Biden administration announced on Tuesday that it's adjusting federal regulations to allow over a million Americans to purchase cheaper health insurance under the Affordable Care Act without needing new legislation out of Congress.
A large part of the change rests on fixing the so-called "family-glitch," which excludes some families from insurance subsidies due to how income thresholds are currently calculated. Health advocates and progressives had urged the White House to issue new rules to permit more families to buy health coverage through insurance marketplaces established under the ACA, or Obamacare.
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Under the ACA, some people can buy federally-subsidized health insurance even if their employer offers coverage. Only those who would have to spend over 10% of their household income on a monthly premium qualify for federal assistance.
The income formula only takes premiums for an individual's health insurance into account, leaving out policies that also offer coverage for spouses, children, or other dependents. The Biden administration wants to adjust the formula so the cost of buying health coverage takes more than one person into account, meaning that subsidies will be available if premiums for an entire family exceed 10% of income. The fresh subsidies would be deployed through the Treasury Department.
The Biden administration is able to sidestep Congress to adjust the formula, and fulfill one element that had been in an executive action wish list released from the Congressional Progressive Caucus last month.
The White House estimates that 200,000 uninsured people would gain health coverage and 1.2 million people would be eligible for cheaper health insurance. The changes would kick in at the start of next year.
"Fixing the family glitch is the biggest step the Biden Administration could take without Congress to improve affordability under the ACA," Larry Levitt, the executive vice president for health policy at the nonpartisan Kaiser Family Foundation, wrote on Twitter.
Former President Barack Obama joined Biden on Tuesday at the White House in an event marking the 12th anniversary of the ACA. He signed it into law in March 2010.
"Today the ACA hasn't just survived, it's also pretty darn popular," Obama said, noting multiple GOP-led court challenges along with efforts to repeal and replace the law under the Trump administration.
Extending ACA health insurance subsidies temporarily enacted under the Biden stimulus law in spring 2021 was one of many proposed policies in the now-defunct Build Back Better legislation. Those subsidies are set to expire at the end of December.
One senior Senate Democrat argues that the ACA subsidies are likely safe from potential cuts to gain Sen. Joe Manchin's vote. Democrats want to sway the conservative West Virginia Democrat to pass a smaller social and climate spending plan sometime later this spring or summer.
"I don't see anybody speaking out," Sen. Ron Wyden of Oregon, chair of the Senate Finance panel, told Insider. "I don't see anybody who is opposing either the health portion which is really prescription drug cost containment and ACA premium assistance."
