Family Firewall Needs to be Removed to Fix Health Care in the U.S.December 31, 2020
According to the Commonwealth Fund, thousands of families are unnecessarily suffering because of fulfilling obligations outlined in the employer health insurance. At the time of designing and implementing the Affordable Care Act, its creators ensured that people have access to employer’s sponsored health insurance, and those plans fulfill the ACA’s basic coverage tenets. The employers who failed to provide such plans to their employees had to pay a tax.
However, individual plan members were allowed to refuse substandard company coverage and have health insurance through the exchange network, where they can obtain premium subsidies if they were eligible for it. But families of such members were not given a similar option and hence thousands of family members were burdened with useless health insurance plans. Their inability to access the exchange plan was known as the “firewall”.
The removal of this firewall will allow people having employer coverage to buy health plans from the exchange and have premium subsidies if they qualify. This will provide substantial financial relief to innumerable families having lower incomes. This change will also benefit Black and Latino workers having employer coverage. Removal of Firewall between Marketplace coverage and employer insurance will surely make health care highly affordable for people.
As per the Commonwealth Fund, the family coverage firewall even affect economically disadvantaged people. This family coverage glitch has affected millions of low and middle-income families, who were forced to enroll in expensive family plans, as they were unable to qualify for marketplace subsidies. Moreover, this family glitch has negatively impacted more than 6 million people, as per the Urban Institute estimates.
According to the Commonwealth Fund, around 6% to 13% of non-elderly people covered under employer insurance could pay low premiums for a marketplace plan, if this firewall is lifted. Basically, low or middle-income families will be the major beneficiaries. Though the Commonwealth Fund acknowledges that removing family firewall will not instantly provide better health coverage to families at a lower cost but other policy revisions will also be required to make sure that these families have access to a better plan at an overall lower cost. However, removing the firewall is a major step and it needs to be taken.
The analysis of the Commonwealth Fund states that the removal of the firewall between employer-sponsored plans and subsidized marketplace plans may provide financial relief to several low and middle-income families who are facing problems due to high premium costs. Besides, even the pandemic-related recession is slowing the income growth, more people having employer-sponsored plans maybe eligible for marketplace health plans. Firewall removal will also eliminate family glitch due to which millions of people are unable to access subsidies. Once it is removed, Congress can further start planning for offering health plans that ACA has expected for its people.