WASHINGTON — A so-called "family glitch" in the 2010 health care law threatens to cost some families thousands of dollars in health insurance costs and leave up to 500,000 children without coverage, insurance and health care analysts say.
That's unless Congress fixes the problem, which seems unlikely given the House's latest move Friday to strip funding from the law, which is also called the Affordable Care Act.
Congress defined "affordable" as 9.5% or less of an employee's household income, mostly to make sure people did not leave their workplace plans for subsidized coverage through the exchanges. But the "error" was that it only applies to the employee — and not his or her family. So, if an employer offers a woman affordable insurance, but doesn't provide it for her family, they cannot get subsidized help through the state health exchanges.
That can make a huge difference; the Kaiser Family Foundation said an average plan for an individual is about $5,600, but it goes up to $15,700 for families. Most employers help out with those costs, but not all.
"We saw this two-and-a-half years ago and thought, 'Has anyone else noticed this?'" said Kosali Simon, a professor of public affairs at Indiana University who specializes in health economics. "Everyone said, 'No, no. You must be wrong.' But we weren't, and that's going to leave a lot of people out."
The issue has recently received attention, especially after former president Bill Clinton highlighted it in a recent speech.
"The family glitch is definitely a drafting error that Congress made that needs to be fixed," said Joan Alker, executive director of the Georgetown University Center for Children and Families. "But that seems unlikely."
New rules state that those families will not be penalized for not purchasing coverage, but the point of the law was to make coverage affordable for families.
Other challenges for families remain as the Obama administration and the health care industry gear up for the Oct. 1 opening of the exchanges, websites for each state on which customers can shop for and buy health insurance. The law requires uninsured Americans to buy health insurance; many are eligible for government subsidies to help them for the policies. For example:
• Kids may not receive Medicaid or exchange coverage if their parents aren't eligible and, therefore, don't know to check.
• Undocumented immigrants may not learn their children are eligible for insurance.
The law has already helped children, Alker said, because it "stabilizes Medicaid and CHIP," the insurance program for children.
However, 70% of uninsured kids are eligible for Medicaid and CHIP, but they're not all enrolled, she said.
"There has to be a lot of outreach and education about the importance of getting health care," she said. "These kids could enroll today."
If congressional Republicans were to succeed in cutting funding for the law, the CHIP program would expire in October, said Bruce Lesley, president of First Focus, a bipartisan advocacy group for families.
The Children's Health Insurance Program provides insurance for kids whose family incomes are too high for Medicaid, but whose families still can't afford coverage. The Affordable Care Act extended it for two years, which means as many as 6 million children have health care.
Eliminating money for the law would force states to rethink their children's programs quickly, Alker said.
But even with the funding, not all kids are getting coverage. In fact, two-thirds of kids are eligible for Medicaid or CHIP but not enrolled. Advocates hope that adults signing up for insurance through the health exchanges will find out their kids are eligible, and have said as many as 4 million kids could sign up.
"In Massachusetts, the uninsured rate for kids is lower than 2%," Lesley said, explaining that when Massachusetts implemented "RomneyCare," children were enrolled for insurance in droves. The Massachusetts program became law in 2006 under then-Gov. Mitt Romney, last year's unsuccessful Republican nominee for president.
The Obama administration is working with the YMCA and other organizations to get the word out about children's eligibility, he said.
This can be a particularly big deal for immigrant families, where one parent might be a documented immigrant, a second could be undocumented, and the children could be U.S. citizens.
"Most of the kids are United States citizens," said Jenny Rejeske, a health policy analyst for the National Immigration Law Center. "We know already that many kids in mixed-status families don't have insurance."
Though she said the majority of immigrants are in the country legally, undocumented immigrants may be afraid to seek benefits for their children. Those children, she said, need immunizations and preventive care, in part to keep everybody else's kids healthy, too.
"I feel very confident saying it is safe for mixed-status families to sign up," she said. "The information they give will not be used for immigration enforcement."
The information will go only to the agencies that need to see it, and there are "protections" built in to the Affordable Care Act so families will go sign up their children, she said.
Others who might miss coverage options for kids include veterans receiving care through the VA but who don't have benefits for their families, as well as grandparents receiving Medicare. There is a child-only coverage option that would allow the child to receive subsidized insurance.
Alker said kids also benefit when their parents have coverage because the family is more likely to be financially secure. Medical bills are the leading cause of bankruptcy. She also cited examples, such as maternal depression or healthy pregnancy benefits that affect children as well as adults.
According to a Georgetown policy brief, 11.5 million parents and 6.3 million children were uninsured in 2010. Three-quarters of the parents' incomes fell below the poverty line, and 38% lived in deep poverty. About half of them are white, 29% are Hispanic, and 17% are African American.
Despite their concerns, the analysts said several promising things for families have happened through the law, including:
• Foster kids who have "aged out" of the system can continue to receive insurance through Medicaid until they are 26
• American children of immigrant parents -- even undocumented -- can get insurance subsidies through the new health insurance exchanges, and may be eligible for Medicaid.
• The children and spouses of disabled veterans, who receive their health care through Veterans Affairs, could be eligible for subsidized insurance through the exchange, even if the veteran is not. The same could apply to children who live with retired grandparents who receive care through Medicare.