Obamacare 'Glitch' Cuts Out Poor Families

It turns out that the Affordable Care Act, which is also known as Obamacare, is not so affordable after all.

Nearly 500,000 children, under Obamacare, will still lack health insurance because many poor families will not qualify to get government assistance to buy health insurance because of how Congress defined “affordable.” 

Under the IRS regulations released on Wednesday, families that cannot “afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own.”

Congress said “affordable” meant Obamacare plans cannot be “more than 9.5 percent of family income.” But under the new IRS rules, “people with coverage the law considers affordable cannot get subsidies to go into the new insurance markets,” because what counts as “affordable” is keyed to the cost of insurance for an individual worker and not families.

Since the Kaiser Family Foundation estimates that “a typical workplace plan costs about $5,600 for an individual worker” while the average family plan costs $15,700, family members of workers whose employers do not “chip in” for family coverage could be out of luck. They will not be able to make up the difference and will not qualify for Obamacare subsidies. 

It is unclear how many people this “glitch” will impact, and the IRS will not subject families impacted by this “glitch” to a tax penalty. 

Bruce Lesley, president of First Focus, an advocacy group for children, estimated nearly 500,000 children could remain uninsured.

“The children’s community is disappointed by the administration’s decision to deny access to coverage for children based on a bogus definition of affordability,” he said.