Glitch in health care law could hurt families

WASHINGTON -- Some families could get priced out of health insurance because of what's being called a glitch in President Barack Obama's overhaul law.

As a result, some families who can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.

The Obama administration says its hands were tied by the way Congress wrote the law.

IRS regulations issued Wednesday failed to fix the problem, as liberal backers of the president's plan had hoped. However, the IRS did decide that families that can't get coverage because of the glitch will not face a tax penalty for remaining uninsured.

Starting Oct. 1, many middle-class uninsured will be able to sign up for government-subsidized private coverage, effective Jan. 1 through new health care marketplaces known as exchanges.

At the same time, virtually all Americans will be required to carry health insurance, either through an employer, a government program, or by buying their own plan.

The problem seems to be the way the law defined affordable.

Congress said affordable coverage can't cost more than 9.5 percent of family income.

People who already have coverage the law considers affordable cannot get subsidies to go into the new insurance markets.

The purpose of that restriction was to prevent a stampede away from employer coverage.

Congress went on to say that what counts as affordable is keyed to the cost of coverage offered for an individual worker, not his or her family.

A typical workplace plan costs about $5,600 for an individual worker. But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.

So if the employer isn't willing to chip in for family premiums, some families may not be able to afford the full premium on their own, but they will be locked out of the subsidies in the health care overhaul law.

"This is a very significant problem, and we have urged that it be fixed," said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. "It is clear that the only way this can be fixed is through legislation and not the regulatory process."

But there's not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed.