Essay on Transforming Healthcare: Analyzing Biden's ACA Overhaul and Its Impact on Coverage and Premiums

Introduction

The Affordable Care Act (ACA) has reduced the rate of uninsured people. However, nearly 11% of middle-aged Americans are still not uninsured as ACA marketplaces have extraordinary premiums and deductibles. The existing subsidy structure has eliminated affordable individual market coverage for poor people, and all those under employer-sponsored coverage are ineligible for market subsidies. Biden's proposal was established to expand the subsidy and create a public option plan that favors all income levels in the United States.

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Biden's Changes to the Affordable Care Act (ACA) Marketplace Subsidies

The success of Biden’s proposal of increasing financial assistance and expanding subsidy eligibility for marketplace purchasers from the existing 100-400% of poverty is based on several changes. The first change would be fixing the benchmark for a premium tax credit from the current silver benchmark to a more affordable Gold plan. Additionally, the maximum premium contribution cap for the benchmark gold plan would be reduced to 8.5%, which is lower than the existing 10% of the benchmark silver plan. Hence, Biden’s plan will eliminate the subsidy cliff by removing the upper-income limit on the premium. The creation of a public options plan and reinforcing it through mandate penalties to enroll all income levels in all states is a notable change.

Effect of Biden’s Proposal on the Premiums for People Purchasing Their Own Coverage

With the transition to Biden's gold plan, the mean premium for all the demographic groups purchasing their USA coverage will change. For instance, a person making $50,000 and unsubsidized will transition from $ 522 to $ 354 per month. Similarly, the county-by-county premiums will change. This will be a high relief to middle-income enrollers, older, and those residing in rural areas where premiums tend to be higher. Biden's proposal will provide no upper on subsidy eligibility making; for instance, an adult in Georgia where gold plans are much more expensive will be eligible for a subsidy even if their income surpasses $ 300,000 per annum. The proposal will also eliminate the subsidy cliff.

Subsidy Changes and Premium Subsidy Changes for Other Groups.

According to Biden's proposal, the premium subsidy will change for other groups. Adults earning a low income to qualify for marketplace subsidies will be automatically enrolled in the public plan for zero premium. There will be a slight change or no change to some enrollees, for instance, People residing in areas where gold plans already exist with prices less than 8.5%. In counties practicing silver loading, subsidies will shrink as the gold plans are much cheaper than the benchmark silver plan (Cynthia Cox, 2020).

Effects of Biden’s Proposal Affect Premiums for Employer Group Coverage

Biden’s proposal helps workers under employer-sponsored insurance to save substantially. Under Biden's proposal, workers were made eligible for premium tax credits through the public option plan. The employer-based insured household will spend less than 8.5% of their income, which is approximately a deductible of $1,500, compared to the current deductibles of more than $2,000. Another effect is that low-income employees would meet the requirements for cost-sharing reductions, which in return, lowers the marketplace plans deductibles. Lastly, the proposal will eliminate the provider comparison difficulties through its proposed public option plan, which covers every physician and hospital across the United States.

The proposal by Biden to expand the ACA subsidies will bring down the marketplace coverage for all enrollers including the uninsured demographic people in the USA whose low earnings have resulted in them being priced out of the marketplace. Similarly, creating a public option and expanding subsidies will increase the operating costs of the marketplace.

References

Cynthia Cox Follow, R. F., & 2020, S. (2020, September 28). Affordability in the ACA Marketplace Under a Proposal Like Joe Biden's Health Plan. KFF. https://www.kff.org/health-reform/issue-brief/affordability-in-the-aca-marketplace-under-a-proposal-like-joe-bidens-health-plan/.