On Thursday the House of Representatives voted 262-157 in favor of a bill that would modify how adjusted gross income is calculated for the purposes of qualifying for certain healthcare programs under the Affordable Care Act. Specifically, H.R. 2576 would factor in the full amount of Social Security benefits received for determining whether an individual is entitled to obtain, among other benefits, premium assistance credits for health insurance purchased through the future health insurance exchanges. This premium assistance credit – which is a refundable tax credit payable in advance directly to the insurer – is available for individuals with household incomes between 100 and 400 percent of the federal poverty level who do not otherwise receive health insurance through an employer or a spouse’s employer, or whose employer-provided coverage is deemed unaffordable (i.e., premium payments are more than 9.5% of the employee’s household income).

According to a report submitted by the House committee on Ways and Means, the calculation of an individual’s modified adjusted gross income for determining eligibility for a premium assistance credit and entitlement to Medicaid and the Children’s Health Insurance Program (CHIP) should include the full amount of a taxpayer's Social Security benefits, as doing so “provides consistency with eligibility for other Federal needs-based programs and furthers the goal of deficit reduction.” The practical result of this bill, if enacted, would be that fewer people would ultimately qualify for the health exchange subsidy and other federal health programs.

On a procedural note, the text of this measure will be appended to that of another bill – H.R. 674 – and presented to the Senate as a package for consideration. H.R. 674 would repeal the imposition of a 3% withholding on certain payments made to government vendors. The amendments made by H.R. 2576 would help pay for this repeal.