Friday, November 8, 2013

Reform Nuance: Can Adult Children With An Offer Of Family Coverage Instead Get Subsidies?

Question: For people under 26 years old, does the mere fact that the law makes their parents' policy available to them disqualify them from premium tax credits on the exchanges?
Answer: No, it doesn't. The health law allows young adults to stay on their parents' health plans until they turn 26, and about 3 million have done so since the law passed.
But if a young person isn't claimed as a dependent on his parents' income tax, he wouldn't be considered part of the household. So if his own income is within those income guidelines, he may be eligible for subsidized coverage even if he has access to his parents' health insurance. The situation would be different, however, if his own job offers good health insurance coverage. (A plan is considered "good" if it doesn't cost more than 9.5 percent of income for employee-only coverage and covers at least 60 percent of allowed medical expenses, on average.) In that case, he wouldn't be eligible.
This question has caused some confusion. In a House Ways and Means Committee hearing last week, both Rep. Paul Ryan, R-Wis., and Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner both incorrectly stated that young adults in such situations wouldn’t be eligible for tax credits.
But health policy experts say they may under certain circumstances. As Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities, noted in a blog post that day, "The fact that they also can enroll under their parents' policy does not in and of itself preclude them from obtaining exchange coverage using the premium credits."