Strictly speaking, by my my lights, "the ACA as it should have been" would be "Medicare for all who want it": a public plan paying Medicare rates to providers, accepted by all providers who accept Medicare, with competing private plans paying similar rates to providers and probably offering somewhat more generous coverage as a tradeoff for limitations in provider choice. These plans would be available to all, including those with access to employer-sponsored insurance. Oh, and add an OOP cap -- a cap on annual out-of-pocket costs -- to the public plan -- as we should do for traditional Medicare.
In the political universe we're bound by, however, "the ACA as it should have been" denotes the ACA more or less as is, but with subsidies generous enough to make coverage in the ACA marketplace truly affordable to most Americans who lack access to other insurance -- excluding (always, alas) undocumented immigrants.
And that is about to happen! -- temporarily at least -- when Biden signs the American Rescue Plan Act of 2021 later this week (see Section 9661). It's an eye-rubbing moment for progressives who've dreamed fruitlessly for a decade of an Affordable Care Act offering affordable coverage to almost all comers.
The inadequacy of ACA marketplace subsidies was immediately apparent to progressives as the ACA took shape in late 2009 and has been manifest ever since. Enrollment in the exchanges, totaling about 12 million at the end of Open Enrollment for 2012 is half of original CBO projections. According to Kaiser Family Foundation estimates, only about 47% of who are potentially eligible for marketplace coverage are enrolled, and about 52% of those who are subsidy eligible.*
The remedy included in the Covid relief legislation has a familiar shape. In August 2015, Urban Institute scholars Linda Blumberg and John Holahan put out a detailed proposal for subsidy enrichment that reduced the percentage of income paid for a benchmark plan at all income levels and removed income cap on subsidies, so that no one who lacked access to other insurance would pay more than 8.5% of income for a benchmark plan. The proposal also raised the actuarial value of the benchmark plan to 80% from the current 70%. The Blumberg/Holahan subsidy scale became the template for multiple Democratic bills seeking to enhance the ACA, though recent iterations dropped the boosting of benchmark AV.
Well...a year is just a year. And 2022 could be a big year for re-employment, if current economic projections hold -- not that there's evidence that many newly unemployment during the pandemic landed in marketplace coverage. (Far more found their way into Medicaid. In fact, if CBO's projections are on point, the pause in Medicaid disenrollments effected by the Families First Act last March will have had about four or five times the impact of the ACA subsidy boosts). What about enrollment in subsequent years, if Democrats manage to make the subsidy boosts permanent?
I posed the question to Kaiser's Cynthia Cox, coauthor of the brief cited above and Director of Kaiser's Program on the ACA. Cox would not venture a hard forecast. But she said she "wouldn't be surprised if we end up with about 3 million new enrollees" over the next 3-4 years under the new subsidy schedule, if it's extended. That's in line with CBO 1-year projections. It's a bit more than a quarter of the currently uninsured who will be subsidy-eligible (adding about half of the 3.4 million uninsured over 400% FPL to Kaiser's estimate of 8.9 million current subsidy-eligible uninsured). Uy.
Takeup could be considerably higher. But that depends on an effective boost to marketing, outreach and enrollment assistance, and ultimately, perhaps, on a streamlined enrollment process. Cox's conservative quasi-estimate is grounded in long years of surveying the uninsured, which has meant plumbing the depths of ignorance in the general population about current marketplace offerings.
Citing survey data, Cox notes, "If you ask uninsured people why haven’t signed up, 75% will say it's because of cost. That can’t be, because 40% of them are eligible for free coverage [mostly zero-premium high-deductible bronze plans]. If you ask, have you shopped in last two years?...75% have not."
As one source of this ignorance, Cox points to news coverage that focuses on unsubsidized premiums, currently averaging $478 per month for benchmark silver for a 40 year-old. "People don't know that almost no one pays that," Cox says. And as several veteran enrollment assistors have told me, the toxic Republican vilification of marketplace coverage over many years still has its effect: throughout the red states, there are still many uninsured who won't touch "Obamacare."
The Trump administration cut federal funds dedicated to outreach and enrollment assistance for 36 states using the federal exchange (raised from user fees charged to insurers selling plans on the exchange) by 84%, and advertising by 90%. Kaiser has estimated that more than a billion dollars in such unused funds is available to the Biden administration. Navigator groups have been operating on spit and grit in the Trump years. Some navigator programs have disappeared; some have developed deep ties to nonprofits, medical facilities, houses of worship, and government entities that they may leverage effectively with a fresh infusion of federal funding.
The persistent truth in the U.S. is that the uninsured are hard to reach, and ACA marketplace enrollment is all too often hard to execute. "So much will depend on assistance -- navigators, brokers, tax preparers," Cox says. She sees particular potential in the tax preparers, especially if the Open Enrollment season can be moved to tax season. That includes non-human "preparers." She envisions TurboTax and its ilk floating pop-up messages: "Uninsured? Pay zero dollars for this plan."
Getting enrollment assistance -- or simply enrollment marketing messages -- embedded in the tax filing process is a step toward another progressive dream: auto-enrollment, with opt-out. When coverage is affordable, it should be accessed. Today, by Kaiser's estimates, almost 7 million uninsured are eligible for Medicaid, which is free. High as that total is, it suggests a Medicaid takeup rate of more than 90%, compared to about 60% takeup of ACA-compliant plans if 3 million are added to current totals.
One further point. The pending subsidy boosts do not touch the marketplace's metal level structure -- that is, the out-of-pocket costs in plans available. I have examined two means by which the Biden administration can boost the real actuarial value of plans offered at or below the cost of benchmark coverage: 1) mandate full "silver loading," which would make gold plans available below benchmark, and 2) change the AV formula by cutting the most expensive enrollees out of the calculation of the "average enrollee's annual costs." Even more urgently, the legislation does not touch the family glitch: employees for whom an employer-sponsored single-person plan is deemed affordable by ACA standard, but for whom family coverage is unaffordable, are ineligible for subsidies. That too can be changed administratively -- and likely will be.
All of these steps would further fulfill the "affordable care" promise. But affordability, again, does not guarantee enrollment.
* As of January 2021, Kaiser estimates that 14.9 million uninsured are eligible for marketplace coverage, and 8.9 million of them are eligible for subsidies. Current effectuated enrollment through ACA exchanges is likely a bit above 11 million (as of the end of Open Enrollment, it was almost exactly 12 million), with about 9.5 million subsidized. In 2019, Kaiser estimated off-exchange enrollment in ACA-compliant plans at 2.1 million; I am guessing it's up slightly after 3 years of flat premiums and the spur of the pandemic.