Underinsured and deep in debt: which cracks did this family fall through?

USA Today has a story today, by Jayne O'Donnell, highlighting the plight of (under)insured Americans who face crippling out-of-pocket healthcare costs. The lead example raises a couple of question marks about exactly how this family fell through various cracks:

Christian and Jaycee Garcia of Silver Spring, Md., have been hard hit by medical bills, even with their out-of-pocket maximum of $6,350 a year for each family member. Their 20-month-old son, CJ, was born with the rare genetic disorder Eagle Barrett Syndrome and severe scoliosis. He will have his 13th surgery in August, with two more to follow in September, all to rebuild his digestive system and urinary tract and to insert metal rods next to his spine so he can sit up without a brace.

Although Christian Garcia earns $60,000 a year as a restaurant manager, the more than $700 monthly insurance premiums for his work plan and another privately purchased plan for his wife and kids plus other monthly bills make paying the family's share of the hospital bills impossible. The couple have $11,000 in medical bills they are paying $270 a month on, and bills from two other hospitals have gone to collections. Monthly expenses, including the payment on his medical bills, are about equal to his take-home pay of about $3,000 a month.

They have sold their wedding rings and moved out of their apartment into Christian's stepfather's home, where they pay $500 a month for rent and share a bedroom with CJ and their baby, Jeremiah, who is 5 months old.

Because there's a cap on how much people can make to get Supplemental Security Income to help with disabled children, Christian Garcia said he was told the only way they could get help would be to have two more kids.

One salient fact here is that Christian is insured through his employer but the rest of the family is in a private plan purchased on an ACA exchange. That suggests that this family is a victim of the ACA's so-called "family glitch," a drafting error that deems coverage offered by an employer "affordable" if an individual plan for the employee costs less than 9.56% of the family's income, even if insurance for the whole family would cost far more than that. With coverage deemed "affordable," the family is ineligible for subsidies on the ACA exchange -- hence the Garcias' $700 in monthly premiums. Jayne O'Donnell confirmed to me that the family glitch is part of the Garcia's problem. (Democrats would love to fix this problem, but Republicans will not agree to any simple fix that doesn't involve radically changing other features of the ACA.)

The real mystery in this tale, however, concerns CHIP -- the federal Children's Health Insurance Program, which provides no-cost or low-cost insurance to qualifying children. If $60,000 is the Garcias' whole family income, the children should be eligible. In Maryland, the eligibility threshold is a bit north of 300% of the Federal Poverty Level, or $76,797 for a family of four. I did a 'shoparound' on Maryland Health Connection, the state ACA exchange, punching in a $60k income for a married couple with two children, and the site confirmed that if income and eligibility checked out, the children would be in CHIP -- specifically, in Maryland's MCHP Premium, which for a family of four with an income of $60,000 costs $52 per child per month.

O'Donnell tells me that according to Jaycee Garcia, the family applied for MCHP in December 2013 -- when they were a family of three, not four -- and was denied. She's looking further into that. Two possibilities occur to me:1) the family has income other than the cited salary, and 2) when they first applied for MCHP their income was slightly above the 3-person threshold, which was $63,723 as of March 2014 and was probably about $1,000 lower* when they were denied. There may of course be other unseen factors. Access to the renowned urologist treating CJ is crucial to the family, but while that might explain forgoing CHIP, it wouldn't explain being denied access.  I will update when possible. I'll borrow a caution offered by Judy Solomon of the Center on Budget and Policy Priorities: "I never would say for sure without a chance to ask questions regarding other income and circumstances that might be relevant."

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* The $63,723 MCHP eligibility cutoff for a family of three is 3.219 times the 2014 Federal Poverty Level. Multiply the 2013 FPL for a family of three by that amount and you get $62,867.


* As of March 2014,