A significant portion of the change is based on correcting the so-called "family-glitch," which prevents some families from receiving insurance subsidies due to the way income thresholds are currently calculated. Health advocates and progressives had urged the White House to issue new rules allowing more families to purchase health insurance through the ACA's insurance marketplaces, also known as Obamacare.
Some people can purchase federally subsidized health insurance through the ACA even if their employer provides coverage. Federal assistance is only available to those who would have to spend more than 10% of their household income on a monthly premium.
The income formula only considers premiums for an individual's health insurance, excluding policies that also cover spouses, children, or other dependents. The Biden administration wants to change the formula so that the cost of purchasing health insurance includes more than one person, which means that subsidies will be available if premiums for an entire family exceed 10% of income. The new subsidies would be distributed by the Treasury Department.
The Biden administration is able to circumvent Congress in order to change the formula and fulfill one of the items on the Congressional Progressive Caucus' executive action wish list released last month.
According to the White House, 200,000 uninsured people would gain health coverage, and 1.2 million people would be eligible for lower-cost health insurance. The changes would take effect at the beginning of next year.
"Fixing the family glitch is the most significant step the Biden Administration could take without Congress to improve ACA affordability," Larry Levitt, executive vice president for health policy at the nonpartisan Kaiser Family Foundation, tweeted.
Former President Barack Obama joined Biden at the White House on Tuesday to commemorate the ACA's 12th anniversary. In March 2010, he signed it into law.
"Today, the ACA hasn't just survived; it's also pretty darn popular," Obama said, citing multiple GOP-led court challenges as well as Trump administration efforts to repeal and replace the law.
Extending temporary ACA health insurance subsidies enacted under the Biden stimulus law until spring 2021 was one of many proposed policies in the now-defunct Build Back Better legislation. These subsidies will be phased out at the end of December.
One senior Senate Democrat claims that the ACA subsidies are unlikely to be cut in order to secure Sen. Joe Manchin's vote. Democrats hope to persuade the conservative West Virginia Democrat to support a smaller social and environmental spending plan later this spring or summer.
"I don't see anybody speaking out," Oregon Senator Ron Wyden, chair of the Senate Finance Committee, told Insider. "I don't see anyone opposing either the health portion, which is essentially prescription drug cost containment, or the ACA premium assistance."