America's new healthcare bind: How to overcome the "family glitch"

Due to a quirk in the law, 3 million low-income kids could soon lose their insurance. Here's the best, only way out

Published November 14, 2014 4:43PM (EST)

         (<a href=''>bikeriderlondon</a> via <a href=''>Shutterstock</a>)
(bikeriderlondon via Shutterstock)

Starting tomorrow, November 15, millions of Americans will go online to obtain or re-enroll in health coverage through the Patient Protection and Affordable Care Act’s (ACA) insurance marketplaces. Working families once again will try to pick a health plan that works for them. Yet this year, the task will be particularly difficult.

A quirk in the ACA, coupled with the expiration of a national children’s health insurance program, will put family coverage out of reach for many. This means that up to 3 million low-income children may lose their insurance because family coverage is too expensive for low-income parents.

A solution exists. But first, let’s explore the ACA problem. Under the law, employers need to provide insurance only for workers – not workers’ families. This has created the so-called “family glitch.” Although premiums paid by workers are capped, there is no limit on the employee’s share of premiums for family members, and these often cost three times as much as an individual’s coverage.

So what are parents to do? What about the Children’s Health Insurance Program (CHIP)? It was expressly designed to help families in these circumstances. Since 1997, CHIP has provided insurance for children 18 and under in families slightly over the poverty level, and all kids in families that can’t afford private insurance.

CHIP is now up for congressional reauthorization. Congress is debating how long to extend the program given that the ACA helps provide private and Medicaid coverage for many children. The ACA’s “family glitch” adds new complications in health care. Politics permitting, Congress hopes to quickly renew the successful program by the end of the year.

But CHIP isn’t a panacea either. Many children eligible for CHIP still lack insurance and access to care. Why? CHIP is a federal block grant. States implement CHIP in their own way. Some create waiting lists when the coffers run empty.

CHIP also struggles to enroll and cover all eligible kids. Many eligible children have parents that are undocumented who are hesitant to get coverage. Application assistance, language access and geography determine the success of outreach of CHIP or any other health program’s enrollment.

What about Medicaid? Can that help parents? Not necessarily. Although it covers nearly 36 million children, and Medicaid and CHIP combined insure more than half of America’s children, many working parents make too much money to qualify or live in states that did not expand Medicaid.

The result? Two-thirds of all eligible low-income children are uncovered. That’s more than 7 million kids. African-American and Latino children are disproportionately uninsured. And two million children have fallen into poverty because of family medical bills, which cut into wages and can devastate families facing child illness.

The ACA hopes to close this gap through enrollment outreach, but millions of kids will still go uninsured. Health enrollment will be much tougher this year. Hard-to-reach populations will remain uncovered. And for kids that do get coverage, CHIP’s eventual convergence with the ACA means more working families will get their coverage through the insurance marketplaces. They’ll have to continue spending a larger share of their paychecks toward their child’s rising premiums, deductibles and co-pays.

This trend is bad for the country. We know that uncovered and under-insured kids cost much more than just medical bills. Healthy kids perform better in school and develop the required skills to successfully enter the workforce.

The problem, then, is that hurdles to basic health care for low-income kids linger because our health care system is fragmented and unnecessarily complex.

There is a better, simpler way. We could have a unified health care plan that covers everybody and is more fair and efficient than our current system. Medicare is a universal program for seniors and the disabled. Let’s expand it to cover everyone.

A single-payer national health program built from Medicare would guarantee universal coverage and permit children and adults to see any physician. Patients would not be blindsided with unexpected out-of-network costs. We would have no coverage gaps or enrollment hiccups. Moreover, we could eliminate the waste and inefficiencies contributing to our $2.8 trillion national health bill by curtailing the enormous overhead incurred by for-profit health plans.

Most industrialized nations offer universal health care. Vermont plans to deliver health care to every resident next year. Bills before Congress present a path forward for a single-payer system.

If we want to really cover all kids, boost outcomes and curb costs, we need to pursue a national health program that guarantees quality coverage for our next generation and beyond.

By Vijay Das

Vijay Das is a health care advocate for Public Citizen's Congress Watch division. Follow him on Twitter @vijdas.