Covering the Uninsured Under a Biden Administration
The Biden-Harris Administration wants to build on the Affordable Care Act to cover America’s 30 million uninsured. About 10% of Americans are uninsured. In Massachusetts 97% are insured; in California about 93% are insured. Elsewhere uninsured rates for adults can run as high as 20% in Texas or other states where Governors and state legislators have adamantly opposed implementation of the ACA. https://www.kff.org/other/state-indicator/adults-19-64/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D The uninsured are predominantly a working population, working in sectors of the economy such as gig workers or agriculture where health benefits are not commonly offered. During our Covid recession, many of the newly unemployed cannot afford to pay COBRA premiums to keep their health insurance which was previously paid by their employer.
What is proposed?
Biden has proposed to cover the lowest income uninsured through Medicare in those states that have rejected the ACA’s Medicaid expansion. These are the working poor in states like Texas, Florida, Georgia, Alabama and Mississippi and other states that have declined to expand their Medicaid programs despite the 90/10 federal match being offered. These uninsured are individuals with incomes below 138% of FPL. ($17,610 for an individual, $29,975 for a family of three). Medicare would need to be redesigned with low, nominal or no out of pocket responsibilities for this population.
Biden has proposed to tie the premium assistance subsidies available through the Exchanges to the gold level plans rather than the silver level plans. Gold covers 80% of expected medical expenses; whereas silver covers 70% of expected medical expenses. This will help all families and individuals purchasing through the Exchanges. Medicare and most employer plans already offer at least gold level coverage.
Biden has proposed to assure that no one in the individual market pays more than 8.5% of income for their coverage. This will primarily help middle aged and older individuals and families with incomes in excess of 400% of FPL purchasing through the Exchanges.
Biden has proposed the “public option” i.e. Medicare-like coverage for individuals purchasing their coverage through the Exchanges who would prefer it. This could prove to be a less costly option for many seeking coverage through the Exchanges, particularly those living in rural regions or in other regions with little to no price competition among insurers and hospitals resulting in high priced insurance premiums.
He has proposed that individuals between the ages of 60 and 65 would have the option to enroll in Medicare. This would dramatically reduce the costs of care and coverage for those approaching the start of their Medicare eligibility.
What are the projected impacts?
The UPenn/Wharton analysis is strikingly positive.
“The Biden healthcare plan focuses on expanding access and affordability of insurance and decreasing prescription drug prices. We estimate that by 2030, relative to current law, the Biden plan would decrease the uninsurance rate from 10 percent to 6 percent, decrease private insurance premiums by 23 percent and out-of-pocket spending by 16 percent, and decrease the percent of the population that forgoes medical care from 7 percent to 4 percent. The Biden healthcare plan would increase net spending by $352 billion over ten years but would reduce debt by 4.5 percent over that period due to dynamic growth effects.” https://budgetmodel.wharton.upenn.edu/issues/2020/10/6/biden-healthcare-proposals
“A new KFF analysis finds that expanding Affordable Care Act (ACA) premium subsidies like Democratic presidential nominee Joe Biden has proposed would lower the cost of Marketplace coverage for nearly all potential enrollees, including the uninsured and others currently priced out of the Marketplace.” https://www.kff.org/health-reform/press-release/analysis-a-proposal-like-bidens-health-plan-would-lower-the-cost-of-aca-marketplace-coverage-for-nearly-all-potential-enrollees-and-lower-premiums-for-over-12-million-workers-with-employer-c/
See also, the excellent summary assessing expected wprovider and payer responses to these proposals in the following link: https://revcycleintelligence.com/features/what-healthcare-cfos-can-expect-under-a-biden-presidency
What else should/could be done?
First, there should be automatic enrollment for all the low income uninsured with an option to “opt out”.
Second, a Biden Administration will need to come up with a plan that offers coverage for undocumented workers, of whom there are about 11 million residing in the US. This is a very hot button political issue, and very urgently needed in states like California, Texas, Arizona and Florida with high percentages of undocumented workers. About 60% of California’s remaining uninsured are undocumented workers; many work in the informal economy and live in the shadows fearful of deportation; all pay various forms of taxes for government services and benefits, which they often are not qualified to then receive. California has begun to offer Medicaid coverage (with no federal match) to those under the age of 26 who are otherwise income eligible — an approach with notable success as California’s uninsured rates for pregnant women and children are now extraordinarily low. I think that an approach that builds on coverage through their their employers with three way financing from employers, employees and government might be more successful in Congress.
Third, a Biden Administration should enroll any still remaining uninsured in the lowest cost public coverage at the bronze level. Those enrolled should help pay for some of the costs of their coverage with a small Health Insurance tax – e.g., 2-3% of incomes in excess of the Federal Poverty Level – on those not otherwise enrolled in any form of coverage.
With these types of approaches we can achieve good and affordable coverage for everyone living in the USA. Building on existing coverage and financing does not require us to refinance all existing forms of coverage; however it does need to be quite carefully done such that individuals and employers do not drop their existing coverage.
Prepared by: Lucien Wulsin
Founder, Insure the Uninsured Project
Dated: 11/23/20