CBO estimates that capping cost-sharing for insulin at $35 per month in the Build Back Better Act would decrease federal revenue by $4.6 billion over a decade, which is an indication of how much people who use insulin would save.
There are two ways capping insulin cost-sharing leads to lower federal revenues:
1. It raises premiums in ACA marketplace plans, which increases the premium tax credits paid by the federal government.
2. It raises premiums in employer plans, which are not taxed as income.
Economists generally assume that when premiums for employer-provided health insurance rise, wages fall.
Since wages are taxed as income and health insurance premiums are not, a shift from wages to premiums will lead to a decrease in federal revenue.
Consider this example:
A worker is in the 22% tax bracket. With the employer and employee shares of Social Security and Medicare taxes, they also pay an extra 15.3%.
So, if a dollar in wages shifts to tax-free health insurance premiums, the federal government loses 37 cents.
There's a case to be made that patients should pay nothing for insulin. It would raise insurance premiums, but it's a lifesaving drug that we don't want people being cost-conscious about.
In the UK, for example, there are no drug copays for people with diabetes (or for people with cancer, people who are pregnant, kids, or seniors).
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Filling the Medicaid coverage gap has become a contentious political issue. How many people know what it is and how it originated?
The ACA originally envisioned a seamless system of health coverage eligibility.
States were required to expand Medicaid to everyone with incomes up to 138% of the poverty level.
People with incomes 138-400% of the poverty level were eligible for premium subsidies.
In 2012 the Supreme Court threw a massive curveball at the ACA's seamless coverage system.
Even though the federal government was initially covering 100% of the cost of the Medicaid expansion, phasing down to 90%, the court ruled that it had to be voluntary.
A big reason why the public overwhelmingly supports government negotiation of drug prices is that they don't buy the drug industry's arguments against it.
93% of people believe drug companies would still make enough to invest in research, even if prices in the U.S. were lower.
So much of the debate over the Build Back Better package has been on new spending and the overall price tag.
The provision that could prove to be among the most popular -- negotiation of drug prices -- saves money for both the government and patients.
As sweeping as the Democrats' budget measure is, its goal in health care is to fill in gaps, not overhaul the system.
Cover poor people in 12 states not expanding Medicaid.
Expand community-based care.
Address ACA affordability.
Add dental, hearing, and vision to Medicare.
Filling in these health care gaps would be paid for primarily by negotiating drug prices in Medicare and limiting price increases to inflation.
While that would be a big deal, Medicare has for years controlled prices for hospital and physician care.
The more unprecedented part of the Democrats' health agenda is giving privately-insured patients access to government-negotiated drug prices. That's quite common in other countries, but does not happen here for drug prices or any other type of health care.
Key details about the House plan to cover poor people in states not expanding Medicaid:
ACA marketplace coverage 2022-2024 with nominal cost-sharing.
Coverage in a new federal Medicaid plan starting in 2025.
States that drop the expansion have to continue paying their share.
Here are links to the proposed legislative language from the House Energy and Commerce Committee to cover poor people in states that have not expanded Medicaid under the ACA.
COVID vaccines are widely available and free to people whether they have insurance or not.
Now, under President Biden's plan, workers at businesses with 100+ employees will also get paid time off to get vaccinated and recover from any side effects.
It's sort of remarkable that your ability to work, attend many entertainment events, and go to certain restaurants and bars is still going to depend on proving vaccination using a flimsy, oddly-sized CDC card with no electronic verification.
A vaccine mandate means unvaccinated workers lose their jobs. A health insurance surcharge for unvaccinated workers is less coercive and likely less effective. It also opens up a hornet's nest of issues around whether people's behavior should affect what they pay for health care.