Health Reforms to Cover the Uninsured and Improve Affordability under a Biden Administration
The United States has a very high priced health system that fails to cover all Americans and yet charges the highest prices in the world. https://policyadvice.net/insurance/insights/how-many-uninsured-americans/
The Affordable Care Act has covered over 20 million uninsured Americans and reduced premiums and out of pocket costs for care; over 27 million Americans still remain uninsured. The ACA increased coverage for about 5 million uninsured Californians. And about 2.7 to 3 million Californians still remain uninsured; sixty percent of the remaining uninsured Californians are undocumented workers, most of the others cannot afford their individual insurance premiums in the Exchanges.
The Affordable Care Act (ACA) has been under steady attack by the Trump Administration for the past 4 years and under repeated attacks by many House and Senate Republicans for the last 10 years. It was nearly repealed in 2017 but for the votes of Senators McCain, Collins and Murkowski.
These were the some of the key elements of the ACA:
· Guaranteed issue of coverage for every American regardless of pre-existing conditions
· Ten essential health benefits for every American purchasing health coverage
· Medicaid expansion to cover the poor with a 90/10 federal match
· Purchasing pools (Exchanges) available for all small businesses and for all individuals
· Premium assistance for individuals with incomes 133-400% of the federal poverty level purchasing their coverage in the Exchanges to make their premiums more affordable
· Cost sharing reductions for individuals with incomes 133-250% of the federal poverty level purchasing their coverage in the Exchanges to make health care more affordable and accessible
· Requirements that every business with more than 50 employees offer basic coverage for full time workers
· Requirements that all Americans enroll in some form of affordable coverage (private employment-based, private individual or public programs) or pay a tax penalty – also known as the individual mandate or shared responsibility.
· It was paid for primarily through increases in the tax rates on high income Americans and reductions in provider reimbursement rates.
The individual tax penalties of the ACA were repealed as a part of the Trump tax cut package. The Republican Attorney General of Texas and many others, including the Trump Administration, then sought for a second time to have the ACA declared unconstitutional. https://www.scotusblog.com/case-files/cases/texas-v-california/ The Supreme Court is expected to rule early next year. The Court is not expected to find the ACA unconstitutional, but it may find that the requirement of shared responsibility (individual mandate) is unconstitutional and should be severed from the rest of the ACA. Similar state tax penalties, in states like New Jersey, California and Massachusetts, will not be impacted by a Supreme Court ruling to invalidate and sever the ACA’s individual mandate (shared responsibility).
The incoming Biden Administration has narrow majorities in the House and a 50/50 Senate on which to build support for its health reform proposals.
President Biden proposes to do the following:
· He wants to give poor citizens in the fourteen states that have still refused the 90/10 federal match to expand Medicaid the option to enroll in Medicare instead. These are primarily states in the old South like Florida, Georgia, Mississippi, Texas, North Carolina, South Carolina, Tennessee, and Alabama. https://www.healthinsurance.org/medicaid/ It would cover about 5 million individuals and parents with incomes less than 133% of the federal poverty level about $17,000 annually for an individual.
· He wants to improve affordability in the Exchanges by expanding eligibility, increasing subsidies, and removing caps. https://www.kff.org/health-reform/issue-brief/affordability-in-the-aca-marketplace-under-a-proposal-like-joe-bidens-health-plan/ What does this mean and entail? Eligibility for premium assistance stops at 400% of FPL; Biden would eliminate that cliff for premium assistance. The cost sharing assistance is tied to silver plans (70% of expected medical costs); Biden would tie them to gold plans (80% of expected medical costs). Individual responsibility for premiums is capped at 9.5% of family incomes at 400% of FPL; Biden would reduce that to 8.5% of family incomes and remove the cliff. Biden would also change the formulas for premium assistance to reduce the amounts that individuals pay for their coverage. This will encourage more to sign up for individual coverage in the Exchanges and make coverage much more affordable and care more accessible in the Exchanges.
· Biden proposes to start eligibility for Medicare at age 60, rather than 65. This will reduce premiums and reduce out of pocket responsibilities for those individuals aged 60-64 who choose to opt for Medicare.
· Biden proposes to offer the public option (Medicare coverage) in the Exchanges. This will add an additional plan choice and may increase price competition and affordability in the Exchanges. This is particularly important in high premium, high cost rural regions and in those communities where provider monopolies and oligopolies control the health markets and set high prices.
· Biden proposes a five and eight year pathway to legal residency and citizenship respectively for undocumented workers and their families. This will increase their future opportunities for health coverage through employment, Medicaid and the Exchanges for those with new legal residency status.
As of now, we have low uninsured rates in states like Massachusetts (3%), which pioneered many of the ACA reforms, and persistently high uninsured rates in states like Texas (over 20%), which have resisted and fought the ACA at every turn. https://wallethub.com/edu/uninsured-rates-by-state/4800 California, New Mexico, Nevada and Kentucky are among the states showing the greatest reductions in uninsured rates.
Prepared by: Lucien Wulsin
Dated: 1/21/21