What the presidential decree on health care and the “family problem” means for working families and small businesses

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Last Monday, President Biden issued an executive order strengthening the Affordable Care Act (ACA) by fixing the “family problem,” a loophole that prevented about 5 million people from qualifying for subsidized health plans. This measure will support working families and high streets across America by giving more Americans access to affordable health care at a lower cost.

Before the ACA became law in 2010, small business owners and their employees had very limited health care options. Either employers paid exorbitant premiums if they could afford it, or, if they were lucky, their state government offered a subsidized health care program. The passage of the ACA has given tens of millions of Americans, including small business owners and their employees, access to affordable health care through subsidies available in health insurance markets, on a scale never seen before.

President Biden increased grants for the ACA through the US bailout, which reduced costs and expanded access for millions of Americans during a critical time of the COVID-19 pandemic. Between the end of 2020 and September 2021, one in seven uninsured Americans was covered, and families also saved an average of $2,400 on their annual premiums.

Under the ACA, people can get a premium tax credit to buy affordable, high-quality coverage through Healthcare.gov or their state’s marketplace if they don’t have access to a “affordable” health insurance. Employer-based health insurance is currently defined as “affordable” if it meets these criteria for an individual plan covering the employee, but the same requirement is not in place for coverage of additional family members . This “family glitch” makes family members ineligible for a premium tax credit, even if they need it; it affects about 5 million people.

The Biden administration aims to address the “family problem” through a proposed rule that says family members of workers with unaffordable family coverage can get premium tax credits to buy a ACA coverage, beginning in January 2023. In addition, the executive order directs federal agencies to use all available resources to increase affordable, quality health coverage through efforts that include continuing to expand eligibility and reducing costs for ACA, Medicare, or Medicaid coverage, and helping to reduce medical debt burdens.

While this supports Americans of all walks of life, it will especially benefit small business owners and their workers. In poll after poll of small business owners, the cost of health care is their number one concern and easing the burden of high costs will help them grow their business and our economy. This decree is another step forward to provide support in this area.

This is an ongoing effort and there is still a lot of work to do. Next, the Biden administration and Congress should turn their attention to reducing prescription drug costs, expanding US bailout subsidies, and expanding access to high-quality care for every American.

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