Sep 29, 2020 - Health

Joe Biden's plan to make the ACA more affordable

Joe Biden speaks at an event about affordable health care.
Joe Biden speaks at an event about affordable health care. Photo: Jim Watson/AFP via Getty Images

Joe Biden's proposal to increase Affordable Care Act subsidies and open the marketplace to people with employer insurance could save millions of people hundreds of dollars a month, according to a new Kaiser Family Foundation analysis.

Why it matters: Biden's plan to build on the ACA — making it more affordable and drawing more people onto its exchanges — sets up a stark contrast with President Trump's vision, which is to tear the entire law down.

The big picture: Biden's proposal for a public option got a lot more attention during the primary, as it was contrasted against Medicare for All.

  • While less flashy, expanding ACA subsidies could enormously benefit middle-class people — particularly older people who live in more rural areas — who don't qualify for subsidies and so spend a large portion of their income on premiums each month.
  • It could also be helpful for people who spend a lot on employer insurance, but are barred from choosing a subsidized plan on the individual market.

Driving the news: Affordable coverage options have become even more important during the pandemic, as millions of Americans lose their jobs and their insurance.

  • Employers looking to reduce expenses are increasingly opting out of providing health coverage, a problem that is likely to get worse, the NYT reported yesterday.

By the numbers: Biden has proposed to limit what anyone pays in premiums to 8.5% of their income, and to change the way subsidies are calculated.

  • This would lower the cost of coverage for nearly everyone who is already enrolled in an ACA plan, as well as for those who can't afford this coverage, per KFF.
  • A 40-year-old making $50,000 a year — which is just above the subsidy threshold — would save 32% a month on premiums for a lower-deductible ACA plan. A 60-year-old with the same income would pay 66% less a month.
  • More than 12 million people with employer insurance would spend less on premiums if they switched to an ACA plan subject to premium caps.

Yes, but: "Any health reform plan involves trade-offs. In the case of Biden's, it's primarily the budgetary cost -- an estimated $750 billion over 10 years, according to the campaign," KFF's Larry Levitt tweeted.

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