The Impact of the Family Glitch on Health Insurance Coverage and Expenditures

The Affordable Care Act of 2010 created health insurance marketplaces where individuals and households could purchase non-group coverage beginning in 2014. Recipients are also eligible for varying levels of premium tax credits to assist in purchases on these marketplaces. These premium tax credits depend on whether the recipient has access to affordable employer-sponsored insurance. However, the definition of “affordable” insurance varies by household size. For both individuals and households, affordability is based on the cost of individual-only coverage even though family plans are generally much more expensive. This is known as the family glitch. I study the impact of the family glitch on the take up of non-group insurance, as well as its impact on healthcare expenditures. I find that compared to single person households, those in multi person households are less likely to take up privately purchased insurance. However, it does not appear that out of pocket expenditures or insurance premium payments are impacted by the family glitch.