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Analysis: A Proposal Like Biden’s 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 Coverage Interactive
Maps Show Affordability of 2020 Marketplace Premiums by County, and Projected
Changes Under a Proposal Like Biden’s
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. While
the former Vice President’s plan to create a public option has received
substantial public attention, his companion proposal to expand ACA
marketplace subsidies has been less discussed, even as it has the potential
to affect the affordability of health insurance for many Americans. The plan
is also projected to more than double federal marketplace spending, according
to Biden campaign officials. Premium
savings would be greatest for older people with incomes just above $400% of
poverty, where current subsidy eligibility cuts off. A 60-year-old making
$50,000 would go from paying $1,029 on average per month for the
second-lowest cost gold plan to paying $354 per month under a Biden-like
proposal, a savings of $675 (or 66%) per month. The
cost savings would be even more substantial for people living in rural areas,
where premiums are often higher. Currently, a 60-year-old making $50,000 in
Floyd County, Georgia would pay $1,903 per month (45.7% of income) for the
second-lowest-cost gold plan; a Biden-like proposal would reduce his monthly
costs to $354 for the same level of coverage (8.5% of income). Under
the current law, the maximum premium contribution is capped at just under 10%
of income and is benchmarked to a mid-level silver plan. Biden’s plan caps
premium contributions at 8.5% of an enrollee’s income for a benchmark gold
plan, making lower-deductible plans more affordable for consumers. The
proposal also removes the upper income limit on premium subsidies,
eliminating the so-called “subsidy cliff,” after which people making more
than 400% of poverty ($49,960 for an individual, or $103,000 for a family of
four) must pay the full price for their coverage. The
analysis focuses on Biden’s plan to enhance premium subsidies under the ACA.
His plan also includes a new public option, available through the Marketplace
and administered by Medicare, which would provide zero-premium coverage to
adults in the Medicaid coverage gap – those with incomes below 138% of
poverty, but living in states that have not expanded Medicaid under the ACA. Additionally,
people with employer-based coverage would be allowed to buy into the public
option or enroll in another Marketplace plan if the cost of the coverage
offered by their employer exceeds Biden’s proposed premium cap of 8.5% of
household income. KFF estimates that 12.3 million people could save money by
switching to a Marketplace plan under a proposal like Biden’s plan. The
issue brief includes interactive maps that allow users to see the most and
least affordable ACA premiums by county in 2020, and how premiums would be
projected to change if Biden’s proposed reforms were implemented. The
analysis does not account for how the creation of a public option may impact
pricing across the Marketplace, including Marketplace subsidies or the net
cost of non-benchmark plans, nor does it estimate the increase in federal spending
necessary to fund Biden’s plan. Filling
the need for trusted information on national health issues, KFF (Kaiser Family Foundation)
is a nonprofit organization based in San Francisco, California. |
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Tuesday, September 29, 2020
New Analysis Examines Affordability in the ACA Marketplace Under a Proposal Like Biden’s Health Plan
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