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Report: Fixing health law ‘glitch’ would expand subsidies to tens of thousands

The Hill, December 13, 2011

 By Julian Pecquet

Fixing a glitch in President Obama's healthcare reform law would allow an extra 144,000 Californians to benefit from the law's promise of affordable coverage, according to a new report from the University of California at Berkeley. 

The proposed fix would have similar effects on states across the nation.

The glitch, which The Hill first reported over the summer, could exclude millions of families from becoming eligible for subsidies when state-based insurance exchanges come online in 2014. Thats because the law bars workers families from being eligible for subsidies if employers offer affordable employee-only coverage — regardless of the cost of their family plans.

Advocacy groups have been pressing federal regulators to apply the affordability test to family coverage, but Treasury Department officials said their hands are tied because of the way the law was written.

The new study recommends that federal regulators change their draft rules to exclude employees with affordable workplace insurance from getting subsidies, while still allowing their families to get them. Under that scenario, the study concludes, 1.6 million Californians would end up in the states subsidized exchange, versus 1.46 million under current regulations.

Regulations recently proposed by the Department of the Treasury would make family members ineligible for subsidized coverage in the exchange if an employee is offered affordable self-only coverage by an employer, even if family coverage is unaffordable, UC-Berkley stated in its report. This could have significant financial consequences for low- and moderate-income families that fall in this gap.

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