I wish they would have read it first

Remember when House Speaker Nancy Pelosi said that “we have to pass the bill so that you can find out what is in it?”  As you are aware, they passed the bill and now we’re finding out that there are problems with it.  The New York Times calls the recent discovery “A glitch in health care reform” (see August 25, 2012 edition).

Workers making less than 400% of poverty level income (about $90,000) are eligible for subsidies to purchase their own insurance if they can’t afford the policy available to them through their work.  The “glitch” comes because of the law’s definition of the “affordable” policy.  The employer’s obligation to provide insurance only applies to individual coverage.  For example, a worker making $50,000 can qualify for a subsidy if his or her share of the insurance plan costs more than 6.77% of income, or $3,385.  If the worker pays 25% of the total $4,500 premium, or $1,125, there is no subsidy and the worker pays $1,125.

The problem arises if the worker is looking to insure a family of four.  The typical plan costs $12,130 and the employer is only obligated to provide an individual plan.  The worker is covered, but the family is not.  Remember the worker is eligible for a subsidy only if his or her share is over $3,385.  The worker’s share of the premium for the required plan is still $1,125.  Thus, if family coverage is desired, the worker pays the difference between the cost of a family plan and that of an individual plan.

More proof that it would have been nice if we had known what’s in the law before they passed the law.  The Kaiser Family Foundation has estimated that as many as 3.9 million dependents may be affected by this “glitch.”

The Kaiser Family Foundation Subsidy Calculator can be found at http://healthreform.kff.org/Subsidycalculator.aspx.

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