Understanding the Family Glitch Fix

Congress enacted the Affordable Care Act in 2010 under unusual circumstances. Democrats began drafting the law when they had 60 votes in the Senate and a majority in the House. Senator Edward Kennedy’s passing changed that. Democrats turned to the budget reconciliation process to pass the ACA. However, this circumvented the legislative process we learned about on School House Rock. The law never went to a conference committee. Conference committees fine tune legislation, addressing details, nits and errors. Without these tweaks, laws are usually flawed.

Which meant that the ACA had problems. Whatever your personal opinion on the ACA, the reality is the legislation as passed needed refinement. Normally this problem would be remedied in follow-up legislation. But the politics of the ACA made significant fixes impossible. Republicans historically wanted to repeal Obamacare, not fix it. Democrats couldn’t implement many fixes on their own.

This year, however, the IRS stepped up to fix what is known as the Family Glitch. To oversimplify a bit, these are rules that determined whether a person was eligible for a premium tax credit. Family members of employees offered qualifying employer-sponsored coverage who could not afford the dependent premium were ineligible for subsidies when they obtained insurance through an ACA exchange.

The regulations apply to health plans with January 1, 2023 effective dates – even if those plans are sold before January 1st. For example, plans sold during this year’s open enrollment (November 1, 2022 through January 15, 2023).

Which means if you sell health insurance, understanding the Family Glitch fix is important. Fortunately, the folks at NAHU can help with that. They’ve published a Family Glitch FAQ that is required reading for benefit specialists. (Members of NAHU have access to compliance support that can provide even more assistance). You can view NAHU’s FAQ here.


Putting Healthcare Reform In Perspective

Putting Healthcare Reform In Perspective

I am honored that California Broker magazine has asked me to write a monthly column for their publication. The magazine has been an important resource for insurance agencies in the Golden State for decades. I’ve written numerous articles for them over the year, but this is the first time I’m doing a regular column.

Since the topics I’m writing on are not geographically limited, I thought I’d share them here as well. This first article, Putting Politics Into Perspective, published in the January issue, explains why there is almost no chance of Medicare for All becoming law in the next administration. While the COVID-19 epidemic changes the calculus slightly, I stand by the conclusion made here. Unless something remarkable happens in the Fall, there simply won’t be the votes needed to enact legislation this sweeping. The article has been slightly edited since its publication.


Putting Health Care Reform in Perspective

It’s easy to get caught up in the day-to-day events that comprise America’s politics. Like an easily distracted dog, every day brings another squirrel. Or three.

By the time you read this, for instance, cable news is no doubt obsessing over the twists and turns of President Donald Trump’s impeachment trial. (As I write, the Judiciary Committee is getting ready for its first hearing, but where this road leads is pretty easy to map). Once the trial is over, the news channels will resume fixating on the Democratic Party’s presidential nomination. That means we’ll be hearing a lot more about Medicare For All, Medicare For All Who Want It and all the other permutations that are healthcare reform in 2020.

A winning issue

In the 2018 mid-term elections healthcare reform played a critical role in helping Democrats capture a majority in the House of Representatives. That’s in part because Republicans badly botched their “repeal and replace” approach to the Affordable Care Act (ACA), misplacing the “replace” part of the formula. For Democrats, healthcare reform is a winning issue. They’ll keep it front and center in 2020.

Listening to politicians debate an issue that could devastate your profession and livelihood can be … upsetting. Especially when the issues involve something as complex as healthcare reform and the politicians, by choice and necessity, talk in generalities and principles that often only glancingly connect with reality.

For example, the Democratic Presidential Debates over the past few months have spent considerable time on the need to fix America’s healthcare system. They often fail to separate health insurance practices from, say, pharmaceutical company pricing decisions. There should be a warning on the screen: Politicians conflating insurance policies covering the cost of care and providers setting the cost of care may lead to indigestion and high blood pressure.

Or consider the appropriation of Medicare to sell a single-payer system. Any and every health insurance professional knows that when candidates talk about Medicare For All they are not referring to Medicare As It Is Today. Medicare As It Is Today includes premiums, co-pays, deductibles, coverage limits and more. It limits costs by setting reimbursement levels for doctors, hospitals and other providers. Medicare For All includes no cost-sharing. And it sets prices providers can charge–a fact no politician will emphasize.

However, Medicare As It Is Today is popular. Co-opting the term “Medicare” for a government-run single payer plan is simply good marketing. And good marketing is good politics. Which means this conflation will continue.

Governing isn’t campaigning

There’s a simple way to get through the coming stress-inducing political maelstrom. Relax. Pay attention. But don’t panic. What you’re hearing is the sound and fury to which William Shakespeare referred. He noted such noise signified nothing. In the case of healthcare reform, it signifies something, but much less than might be apparent.

That’s because campaigning and governing are two different things. Campaigns are about hope (or fear). Campaigns are aspirational. Governing is about counting votes. Administrations are pragmatic. That’s because the calculus each use is different.

Campaigns are about aggregating voting blocks to create a majority (or at least a plurality). In presidential campaigns this is complicated by the Electoral College, but let’s not go there. That’s why politicians talk about “big tents” and “coalitions.”

Governing requires cobbling together sufficient majorities in a legislature (let’s assume Congress). This process is focused on the needs and fears of 535 lawmakers, not 130 million voters.

The 60th Senator

The implications of this difference are profound. Despite all the attention paid to the presidential contest and the nearly $2 billion that will be spent to influence who sits in the oval office, the president doesn’t get to decide the final shape of health care reform. That power resides with one senator.

Interestingly, we don’t know who that is. Yet. But let any president, Democrat or Republican, try to push through healthcare reform and we’ll find out. That most powerful Senator is whoever positions themselves as the 60th vote. (There are ways to change laws in the Senate with a simple majority, but let’s consider the traditional method for now).

Getting to 59 votes is tough. Getting to 60 votes is much tougher. Senators who commit late are extremely powerful. They can often determine what the final bill contains.

In 2017 we saw an example of this phenomenon. Senate Republicans needed 50 votes to pass a “skinny” repeal of the ACA (why 50 were needed as opposed to 60 isn’t relevant now). That crucial vote turned out to belong to Senator John McCain. And neither the president nor Senate Majority Leader Mitch McConnell could capture his support. In that famous “thumbs down” moment, Senator McCain doomed the Republican effort to kill the ACA.

 Medicare for All: Not happening

Come November 2020 we’ll find out which party holds the majority in the Senate. Given that every Republican and several Democrats oppose Medicare For All, that proposal will be dead on arrival.

It’s totally appropriate for Democratic candidates to use Medicare For All to define their aspirations and build their coalitions. When it comes time to govern, however, no matter who is elected, Medicare For All is not going to happen. The 60th senator–whoever that may be–won’t let it.

This doesn’t mean the healthcare reform debate this year is meaningless. This doesn’t mean, as knowledgeable health insurance professionals, we can be detached or silent. Quite the opposite. Momentum matters. Education makes a difference. And advocates for a single payer system are not going away. Engaging in the debate is necessary and useful.

Just keep things in perspective. Your blood pressure will thank you.

Alan Katz is a co-founder of Take 44, Inc., the company behind NextAgency, an agency management system for life and health agencies that saves them time, money and clients. Learn more at www.NextAgency.com. Alan is a past president of NAHU, was a senior vice president at WellPoint and general manager of the general agency Centerstone. He has served as chief of staff to California’s Lieutenant Governor and on the Santa Monica City Council. You can follow him on Twitter (@AlanSKatz), connect on LinkedIn (www.linkedin.com/in/alankatz44) and contact him at Alan@Take44.com.