GAO: Proposed Rule May Leave Some Children Ineligible For Subsidies

Julie Appleby — Tue, 24 Jul 2012 17:04:40 +0000

While most uninsured children will qualify for coverage under the federal health law, a small percentage — 6.6 percent of the total, or at least 460,000 — may be shut out because of how the government proposes to define “affordable” coverage, from the U.S. Government Accountability Office.

The proposed Treasury Department rule says workers and their families are ineligible for federal subsidies for coverage if an employer offers them affordable coverage at work. An employer’s offer is considered affordable if the worker’s share is less than 9.5 percent of household income. But the rule bases affordability on what a worker would have to pay to cover himself or herself, not on the cost of covering the entire family, which is generally higher.

The agency recommends the Secretary of the Treasury, in consultation with the IRS Commissioner, consider whether an “alternative approach” would be consistent with the goals of the health law. The IRS finalized the rule in May, but it has not finalized the affordability standard.

“Under the proposed standard, an offer of affordable employer-sponsored health insurance to one family member could impede other family members’ access to affordable insurance—an outcome which would not further the broader goals of [the] PPACA,” the report says.

The GAO says the proposed standard could affect more than 460,000 children if states stop funding the Children’s Health Insurance Program (CHIP) beyond 2015. Under the health care law, CHIP is not funded beyond 2015, and even if federal funding is extended, states may opt to reduce or eliminate programs beginning in 2020, the report said.

that the proposed rule means the spouses and children of employees who forgo the work-based coverage because of cost would be ineligible for federal subsidies to help them buy private insurance.

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GAO: Proposed Rule May Leave Some Children Ineligible For Subsidies - �鶹Ů�� Health News

GAO: Proposed Rule May Leave Some Children Ineligible For Subsidies