The New York Times reports that an “ambiguity” in President Obama’s signature health care law may make the Affordable Care Act unaffordable for millions of American workers and their families.
Ironically, the glitch is Clintonesque in nature, over the meaning of the word “affordable.” The definition of the word could have enormous practical repercussions in decisions about who obtains government assistance for health insurance.
Under rules proposed by the Internal Revenue Service, which will carry out some of the primary provisions of Obamacare, some working class families would be unable to afford employer-sponsored family coverage health care benefits and yet would also not qualify for subsidies granted in Obamacare. In other words, these workers and their families will fall between the cracks of the language of the legislation.
For a family whose annual income is $35,000 and who pays $4,130 -- or 12% of income -- for family health care coverage sponsored by an employer, the costs would be considered “affordable” under IRS rules. Under Obamacare, however, employer-sponsored health insurance is considered “unaffordable” if a worker pays a premium of more than 9.5% of the worker’s household income. The IRS argues that this calculation should be based only on the cost of individual coverage for the employee, not coverage for a spouse or children. Thus, the family would not be eligible for government subsidies to buy private health insurance in the states’ exchanges.
