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Biden, joined by Obama, proposes tax credit fix to Affordable Care Act

The proposed change would provide coverage for 200,000 uninsured family members while lowering premiums for almost a million more people, an administration official said.
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WASHINGTON — President Joe Biden, alongside former President Barack Obama, announced efforts Tuesday to expand access to health care by proposing changes to the Affordable Care Act that would make more people eligible for premium tax credits to buy ACA marketplace plans.

“Starting next year, working families in America will get the help they need to afford full family coverage, everyone in the family,” Biden said at a White House event promoting the law and announcing the change. “As a result, families will be saving hundreds of dollars a month."

The Treasury Department proposal would allow families to receive tax credits if their coverage costs exceed more than 10 percent of their incomes, a senior administration official told reporters. The change, scheduled to take effect in January, would allow 200,000 uninsured people to gain coverage and lower premiums for a million others, the official said.

Obama's attendance at the event was his first time back at the White House since he left office, and the first first joint appearance with Biden since they attended events commemorating the 20th anniversary of the Sept. 11 attacks last fall.

Obama, who on Monday jokingly referred to Biden as vice president, recounted the struggles his administration faced getting the ACA passed and implemented amid Republican opposition.

"I intended to get health care passed, even if it cost me re-election, which for a while it looked like it might," Obama quipped.

Obama acknowledged Democrats' frustration with not having been able to pass more of their legislative priorities during Biden's first year in office, and used the ACA as an example of the long fight it can take to make progress in Washington.

"Everybody feels frustrated sometimes about what takes place in this town. Progress feels way too slow sometimes, victories are often incomplete, and in a country as big and as diverse as ours, consensus never comes easily," Obama said.

"But what the Affordable Care Act shows is if you are driven by that core idea that together we can improve the lives of this generation and the next, if you're persistent, if you stay with it, and work through the obstacles and the criticism and continually improve where you fall short, you can make America better," Obama said. 

The proposed rule announced Tuesday, which will require a lengthy rule-making process before it can take effect, would provide tax credits to extend the 10 percent cap to other family members, thereby eliminating the “family glitch,” according to a White House fact sheet.

Under the current system, costs for single people on coverage plans are capped at 10 percent of their incomes, but that doesn’t apply to spouses and children who are offered insurance through family members’ jobs. That means those family members are sometimes paying 25 percent or 30 percent of their incomes on health insurance, the official said.

“As a country, this is considered one of the biggest things my administration can do to lower costs and expand coverage,” Biden said. “We are taking steps today to get that done. So look, folks, we need to keep up the fight."

The administration added that a finalized rule would lower many families’ premiums by hundreds of dollars a month.

Politico previously reported key aspects of the proposed rule changes.

Since Biden took office, enrollment and coverage through the ACA, commonly known as Obamacare, is at its highest level. The administration has taken steps to boost participation by opening a special enrollment period for people to get coverage during the pandemic and by increasing outreach and marketing efforts. Over the winter, 14.5 million people bought ACA marketplace plans, including 6 million newly insured people, the White House said.