The Difficulties of Shopping for Family Health Insurance
The search for affordable family health insurance can get complicated given the intricate rules that determine eligibility for coverage, at times creating households where some relatives remain uninsured -- while others can tap private and public plans.
Challenges arise because eligibility guidelines can vary from one family member to another, depending on age, household income, family size and citizenship status. Sometimes someone with a job-based plan has different rules than the rest of the family, or the children qualify for subsidized coverage, but the parents don't.
"These situations put many families in a bind," says Christine Barber, a senior policy analyst at Community Catalyst, a national health advocacy organization based in Boston.
The "Family Glitch"
What many consumer advocates call the "family glitch" occurs when the employer-based plan only provides affordable coverage to the employee. Under the Affordable Care Act, job-based plans are deemed affordable if the cost of coverage does not exceed 9.5 percent of household income.
But what happens if the family can't afford the additional expense of covering a spouse and children under the employer-sponsored plan?
These dependents can shop for coverage in the federal and state-run health insurance marketplaces created by the federal law. But they can't apply for tax credits because the government's affordability requirement is based only on the cost of coverage for the individual employee, not on the cost of coverage for the family.
"The whole family becomes ineligible for marketplace tax credits, because one member has an offer of affordable individual coverage through an employer," Barber says. "Some family members may go without insurance because they can't find an affordable plan."
Nearly 4 million non-working dependents live in families where a working family member has access to affordable employer-sponsored coverage but the family does not, according to a 2011 analysis by the Kaiser Family Foundation.
Family members who are uninsured because they can't afford coverage don't face a tax penalty, Barber says. But without health insurance, these individuals are responsible for all their medical costs.
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Insurance Options for Children
Varying age and income eligibility rules for Medicaid and the Children's Health Insurance Program can leave parents juggling multiple insurance plans.
"Some parents [shopping in the new marketplaces] are surprised to find they end up with private coverage, but their kids are eligible for two different public programs," says Shana Alex Charles, director of the Health Insurance Studies Program at the Center for Health Policy Research at the University of California--Los Angeles.
The health law requires Medicaid to cover children under age 6 with family incomes of at least 138 percent of the federal poverty level -- even in states that have turned down Medicaid expansion for adults. Medicaid is the state-federal health insurance program for the nation's poorest residents.
Children of low- and moderate-income families not eligible for Medicaid may qualify for coverage under the Children's Health Insurance Program.
"CHIP provides children with access to quality, affordable health care and gives their families peace of mind about their health and financial security," says Eva Marie Stahl, project director of the New England Alliance for Children's Health at Community Catalyst. "It's a great opportunity for children to access coverage when there are no family options that are affordable."
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Different Kids, Different Plans
Depending where you live, children in the same family might be enrolled in different plans, because implementation of Medicaid and CHIP can vary from state to state. Some states are in the process of transitioning CHIP beneficiaries to Medicaid.
"A family may have younger kids who qualify for Medicaid and older children who qualify for CHIP or other programs with different premiums and cost-sharing expenses," Charles says. "Some families may encounter situations where their children can't see the same doctor because they have different plans and provider networks."
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Citizenship Status
Families comprised of adults and children with a range of citizenship and immigration status face obstacles, too. Take a family of four, for example, with two parents and one child who are undocumented immigrants and a second child born in the United States.
"This child is a native-born citizen who might be eligible for Medicaid or CHIP, whereas his sibling and parents are not eligible for subsidized care," Charles says. The law prohibits undocumented immigrants from shopping in the government marketplaces.
Given the complexities of buying coverage, advocates urge consumers to get one-on-one assistance from health insurance "navigators" who can answer questions about the enrollment process.
"People are more likely to find the right coverage if they work with a navigator who can help them through the process," Barber says.
Read: [What to Consider When Shopping for Medicare Coverage]
