Joe Did What? Obamacare

Claes Corneliszoon Moeyaert, “Hippocrates Visiting Democritus” (1636), via Eidolon.

I knew big things were intended to happen with our miserable health care provision system in the Biden presidency, and saluted the executive order of 28 January declaring a special open enrollment period for individual-market "Obamacare" policies from the healthcare.gov site, which started on Monday and goes on through mid-April, for people who have lost employer-based policies along with their jobs to the pandemic, that's maybe 7.7 million workers plus 7 million dependents, and perhaps some additional number who have been paying through the nose for COBRA extension of the employer policy they lost.

Now we're getting some information about further developments in the improvement of the Affordable Care Act through the gigantic Covid relief–and–budget reconciliation bill currently making its way through Congress, from a story this morning in Business Insider and their link to a report from the Center on Budget and Policy Priorities, which gives you some of the wonkery you may crave without making it more than I want to handle. I probably shouldn't include it under the "Joe Did What?" rubric, I think it comes from the House Ways and Means committee chaired by Rep. Richie Neal, but it's got some of that delightful surprise element—surprising to me, anyway, and possibly to you guys as well.

The bill offers a number of ideas for expanding health coverage, not just through the pandemic but out into the future, with in the first place

a strong incentive for the 14 states that have not yet implemented the ACA’s Medicaid expansion to quickly do so by providing increased federal funds to states that newly expand. If the remaining states expanded Medicaid nearly 4 million uninsured low-income adults, including about 640,000 essential or front-line workers, could gain coverage. Also among those gaining coverage would be over 2 million people now in the so-called coverage gap — that is, people whose incomes are below the poverty line, and thus ineligible for premium tax credits for marketplace coverage, but who are ineligible for Medicaid under their state’s rules.

What startled me was the line on making Obamacare proper—those individual-market policies—more affordable, which I had assumed would be done by tinkering with the premium subsidies and especially raising the cutoff of subsidies above 400% of the poverty line, but they've taken a completely different approach, looking not at the details of the subsidies but at the provision that you're not supposed to pay over 9.83% of your income for a health insurance policy if you earn 300% to 400% of the poverty line; it cuts the percentage to 8.5% of income, which seems to make an enormous difference at the upper end of the scale, and says nobody under 150% of the poverty line pays any premiums at all, which has an even bigger effect at the lower end, bringing in all the folk who are too well off to get Medicaid but can't in fact easily afford the Obamacare premiums.

• A single individual making $18,000 would pay zero net premium rather than $54 per month (3.6 percent of income) and would qualify for the most generous subsidies for deductibles and other cost-sharing amounts.
• A single individual making $30,000 would pay $85 rather than $195 per month in premiums (3.4 instead of 7.8 percent of income) and would qualify for a plan with reduced deductibles and other cost-sharing amounts. (See Figure 1.) Or, with the bigger subsidy, the same person could opt to buy a gold plan with lower cost-sharing charges for $115 per month.
• A family of four making $50,000 would pay $67 rather than $252 per month in premiums for benchmark coverage (1.6 instead of 6.0 percent of their income) and would qualify for generous cost-sharing reductions.^[4]
• A family of four making $75,000 would pay $340 rather than $588 per month in premiums for benchmark coverage (5.4 instead of 9.4 percent of their income). A typical family could purchase a gold plan with lower deductibles and other cost sharing for about $440 per month (roughly 7 percent of income).^[5]

• A typical 60-year-old making $60,000 would see their premiums cut by more than half, or $535 per month. Instead of paying $960 per month in premiums for benchmark coverage, or 19 percent of income, the consumer would pay $425, or 8.5 percent of income.
• A typical family of four with income of $110,000 would see their premiums cut almost in half, by $666 per month. Instead of paying $1,445 per month in premiums for benchmark coverage, or nearly 16 percent of their income, the family would pay $779, or 8.5 percent of their income, with the premium tax credit making up the difference.

These are all permanent changes to ACA, making the cost much more affordable across the board, up to those who make so much money that their insurance is less (mostly a lot less) than 8.5% of income already. In addition, for purposes of Covid relief, the government will pay for 85% of COBRA premiums.

How it looks to me is that the House bill (at least) is reducing a number of the kludge aspects of Obamacare as we know it, not simply filling up some doughnut holes but simplifying the way it works so that the holes fill up themselves. I associate it with Biden because it's such an example of Building Back Better.