Important thread from someone I don't usually agree with which touches on the ACTUAL secret sauce in Biden's plan, which I actually forgot to mention in my own writeup of his proposal! 1/
Here's my writeup. I went in depth on a lot of his plan but somehow skipped over this critical sentence:
"If a family is covered by their employer but can get a better deal with the 8.5% premium cap, they can switch to a plan on the individual marketplace, too." 2/
"If a family is covered by their employer but can get a better deal with the 8.5% premium cap, they can switch to a plan on the individual marketplace, too." 2/
Under the ACA as it stands today, medium & large businesses are required to provide group coverage for all employees working 30+ hours/week. Some have tried to skirt that, but for the most part they comply. 3/
The flip side is that if your employer does offer you ACA-compliant group coverage, you're ineligible for ACA exchange subsidies. That is, if you decide your employer's offer sucks and want to buy an exchange plan instead, you have to pay full price regardless of income. 4/
Whoops! I forgot the link to my writeup above: acasignups.net/20/07/23/biden… 5/
Anyway, this means people in employer plans are heavily incentivized to stay there.
So what happens if you a) remove the 400% FPL eligibility threshold for ACA subsidies, b) beef up those subsidies AND c) open up those subsidies to the ~160 million people in employer plans? 6/
So what happens if you a) remove the 400% FPL eligibility threshold for ACA subsidies, b) beef up those subsidies AND c) open up those subsidies to the ~160 million people in employer plans? 6/
Suddenly, ACA individual market plans become a LOT more attractive to not only the ~11 million currently enrolled in them AND the ~9 million or so uninsured who are currently eligible for subsidies AND the ~3.3 million uninsured who *aren't* currently eligible for subsidies... 7/
...but the exchange plans ALSO become competitive with a chunk of the GROUP market as well. Not all or even most group plans, mind you--most employers cover something like 70% of the premiums--but a lot of it. 8/
Let's say just 10% of the ~160 million currently in group plans shifted to a subsidized ACA exchange plan. That'd still be ~16 million people...50% more than are on ACA exchange plans today!
How much would all that cost? Well, now we're getting into cost/revenue shifting. 9/
How much would all that cost? Well, now we're getting into cost/revenue shifting. 9/
On the one hand, this would increase ACA subsidies by billions of dollars.
On the other hand, the feds are losing out on ~$270 BILLION/year in tax revenue due to the ESI tax exclusion.
Every employee who shifts from ESI to an ACA plan reduces that. 10/
taxpolicycenter.org/briefing-book/…
On the other hand, the feds are losing out on ~$270 BILLION/year in tax revenue due to the ESI tax exclusion.
Every employee who shifts from ESI to an ACA plan reduces that. 10/
taxpolicycenter.org/briefing-book/…
It wouldn't be a 1-to-1 ratio. It doesn't mean that for every $1,000 in additional ACA subsidy being paid out there's a $1,000 increase in tax revenue from the reduced ESI exemption...but it would cancel out a large chunk. 11/
There would also be a dramatic impact on the risk pools of BOTH the individual market (as it doubled or tripled in size) AND the small and large group markets (as they shrank). My guess is that the small group market would be the one most impacted. 12/
The fallout from all of this is that nearly half the U.S. population would still be enrolled in employer coverage...but that coverage would be gold-level or higher for all of them. Meanwhile, the individual market, currently around ~12 million, could triple to ~35 million+. 13/
It's even possible that the *small* group market, which has been shrinking for years (it was down to 13.6 million in 2016) could be absorbed into the individual market altogether. VT & MA already merge them for risk pool purposes anyway. 14/
commonwealthfund.org/publications/i…
commonwealthfund.org/publications/i…
If you're a single adult/no kids, your cost regardless of your age for a GOLD plan (under BidenCare) would max out at (depending on your income):
$30K income: $100/month
$40K income: $220/month
$50K income: $354/month
$60K income: $425/month
16/
$30K income: $100/month
$40K income: $220/month
$50K income: $354/month
$60K income: $425/month
16/
According to @KFF, in 2018 the average premium for employer-based insurance for a single adult was $560/month. Of that, the employee pays an average of $120/month. This is why most employees would stick with their employer plan... 17/
kff.org/other/state-in…
kff.org/other/state-in…
...and why those most likely to shift over to an ACA plan would be at lower income levels. HOWEVER, that's just an average. It depends on your income AND how good your current employer plan is. If it's Platinum level, you'll likely stick with it. Bronze? Likely to switch. 18/
The only big downside I can see from an enrollee POV is noted by @stevedemaio: Enrolling in an ACA plan, while not *that* complicated, can still be a hassle, so even many who'd be better off would likely stick w/the employer plan regardless. 19/
Plus there's the issue of networks--if your preferred/necessary doctors/hospitals/medications are included in your employer plan but not included in the ACA exchange plan, most will stick with the group plan regardless. So no, this wouldn't wipe out employer coverage... 20/
...but it would certainly cut a slice out of it, and it'd be the slice which is most problematic anyway. /END
