House panel approves change to income definition for subsidized insurance

Members of the House Ways and Means Committee on Thursday approved a measure to change the definition of income used in the healthcare reform law that determines the eligibility for insurance exchange subsidies, Medicaid and the Children's Health Insurance Program.

Currently, the statute uses a uniform definition of modified adjusted gross income, or “MAGI,” to determine eligibility for those three programs. MAGI is based on adjusted gross income, which excludes (for income tax purposes) a portion of Social Security benefits. The bill that Rep. Diane Black (R-Tenn.) introduced this past summer—and that the committee approved Thursday—would count the entire Social Security benefit, and not just the portion that is subject to income tax.

In a summary of the bill, the committee's majority staff said the legislation more closely aligns the income requirements for these health programs with the measurement of income for other social welfare programs, such as public housing assistance. The definition in the current law, the committee asserts, results in millions of households being eligible for subsidized health insurance that is designed for those with fewer financial resources. Both the Congressional Budget Office and the Joint Committee on Taxation have estimated that the measure could help reduce the federal deficit by $13 billion over 10 years, according to the committee.

Members approved the measure in a 23-12 vote, with 22 Republicans and one Democrat—Rep. Ron Kind of Wisconsin—voting in favor of it. Two Democrats on the tax panel did not vote.

“I think it's a step in the right direction,” Rep. Tom Price (R-Ga.), a physician who serves on the committee, told Modern Healthcare on Thursday evening. “We want to be attentive and responsive to folks in need,” he added. “But I think the country is crying out for greater oversight and accountability.”