KHN’s ‘What the Health?’: Finally Fixing the ‘Family Glitch’

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The Biden administration this week issued regulations aimed at fixing the Affordable Care Act’s “family glitch,” which has prevented families that can’t afford their employer insurance from getting subsidized coverage from the insurance marketplaces. The Obama administration had decided that only Congress could fix the glitch.

Meanwhile, open enrollment for Medicare begins Oct. 15, when beneficiaries can join or change private Medicare Advantage plans or stand-alone prescription drug plans. For the first time, Medicare Advantage plans are poised to enroll more than half of the Medicare population despite allegations that many of the largest insurers are getting billions of dollars in overpayments from the federal government.

This week’s panelists are Julie Rovner of KHN, Margot Sanger-Katz of The New York Times, Joanne Kenen of the Johns Hopkins Bloomberg School of Public Health and Politico, and Rachel Cohrs of Stat.

Among the takeaways from this week’s episode:

• The “family glitch” arose because under ACA rules, people offered insurance through their workplace generally don’t qualify for subsidies if they instead purchase a policy on the marketplace — unless their work insurance is deemed unaffordable. That determination was made based on the cost of insurance for the individual worker, not what a family policy would cost. Since family policies are considerably more expensive than individual policies, they are often unaffordable for workers. The new federal regulation will take into account the cost of the family coverage.

• Democrats were aware of this problem even as they passed the ACA. But this is an expensive change, and they were desperate to keep the cost of the bill below $1 trillion. They had promised to fix the “family glitch” but had not done it.

• Many health policy experts believed the fix would need to be made by Congress, but the Biden administration opted to do it through regulation. Whether the regulation will face legal challenges from critics is not clear, but opponents may have a hard time proving they are being harmed by the new rule and have standing to bring a lawsuit.

• Many seniors are happy with their Medicare Advantage plans, which often offer more benefits than traditional Medicare at a reduced cost. Enrollees, however, generally must stay within a plan’s network of health care providers.

• Questions have been raised about federal payments to the plans. They were initially envisioned as a way to save money because lawmakers thought they would be more efficient than the government-run plan. But the benchmark formula for the plans now gives them more than 100% of what the government would pay for an average person in traditional Medicare, and the government pays the plans bonuses for taking on sicker patients.

• Those bonuses have been the subject of numerous government investigations, whistleblower allegations, and some fraud lawsuits that allege the plans misidentify enrollees’ medical conditions to get higher reimbursements from the government. But while some watchdog groups have raised concerns, the Centers for Medicare & Medicaid Services has not made major changes to the reimbursement formulas, partly because Medicare Advantage has high patient satisfaction and bipartisan support on Capitol Hill.

• As lawmakers get closer to Election Day next month, Democrats have trumpeted their support for abortion rights and hit hard at Republicans who supported the Supreme Court’s decision to overturn Roe v. Wade, which had guaranteed access across the country. The Democrats, however, have not been as active in making a case for their passage of the Inflation Reduction Act, which offered several popular changes, including caps on out-of-pocket drug expenses for Medicare beneficiaries, a provision allowing Medicare to begin negotiating the price of some drugs, and an extension of enhanced subsidies for people who buy insurance on the ACA marketplaces.

• Democrat John Fetterman’s campaign for a U.S. Senate seat from Pennsylvania has been slowed down a bit by his recovery from a stroke he had earlier this year. He is back on the trail and is making live appearances, but he uses a computer device to help him translate conversations into written language because he says his auditory processing has not healed. Critics have said he should be more transparent with his medical records. Disability advocates have hit back against the criticism of Fetterman.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read:

Julie Rovner: KHN’s “If You’re Worried About the Environment, Consider Being Composted When You Die,” by Bernard J. Wolfson

Margot Sanger-Katz: KHN’s “Baby, That Bill Is High: Private Equity ‘Gambit’ Squeezes Excessive ER Charges From Routine Births,” by Rae Ellen Bichell

Joanne Kenen: The Food & Environmental Reporting Network’s “For One Historically Black California Town, a Century of Water Access Denied,” by Teresa Cotsirilos 

Rachel Cohrs: Stat’s “A Miniscule New HHS Office Has a Mammoth Goal: Tackling Environmental Justice,” by Sarah Owermohle

Also mentioned in this week’s episode:

• The New York Times’ “‘The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions,” by Reed Abelson and Margot Sanger-Katz

• Politico’s “On Pennsylvania’s Campaign Trail, the Doctor Will See You Now,” by Alice Miranda Ollstein

• CNN’s “’Heartbreaking’ Stories Go Untold, Doctors Say, as Employers ‘Muzzle’ Them in Wake of Abortion Ruling,” by Elizabeth Cohen, Justin Lape, and Danielle Herman

• KHN’s “How Billing Turns a Routine Birth Into a High-Cost Emergency,” by Rae Ellen Bichell

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KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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