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A catch-22 bedevils Medicaid or Medicare buy-in plans designed to co-exist with the ACA marketplace, whether on the state or national level.
On one hand: If the public option is integrated into the marketplace and conforms to ACA benefit and subsidy levels, it won't help subsidized buyers much. They will still pay the same premium for the same level of benchmark plan benefits. The affordability of their options besides the benchmark plan depends on price spreads -- how much less or more other options cost compared to the benchmark. It's highly unpredictable how a public option will affect those spreads -- unless the silver public option plan is the cheapest in that market and way cheaper than the benchmark.
A public option may help unsubsidized buyers by providing a low-overhead choice and possibly stimulating lower unsubsidized premiums across the board. That helps the federal treasury too. But it may compress premium spreads and so make subsidized buyers' choices worse. The problem for subsidized buyers (over 85% of enrollees on ACA exchanges and over 60% of enrollees in ACA-compliant plans) is that the marketplace is under-subsidized. Premiums and out-of-pocket costs are just too high at income levels above 150% FPL.
A catch-22 bedevils Medicaid or Medicare buy-in plans designed to co-exist with the ACA marketplace, whether on the state or national level.
On one hand: If the public option is integrated into the marketplace and conforms to ACA benefit and subsidy levels, it won't help subsidized buyers much. They will still pay the same premium for the same level of benchmark plan benefits. The affordability of their options besides the benchmark plan depends on price spreads -- how much less or more other options cost compared to the benchmark. It's highly unpredictable how a public option will affect those spreads -- unless the silver public option plan is the cheapest in that market and way cheaper than the benchmark.
A public option may help unsubsidized buyers by providing a low-overhead choice and possibly stimulating lower unsubsidized premiums across the board. That helps the federal treasury too. But it may compress premium spreads and so make subsidized buyers' choices worse. The problem for subsidized buyers (over 85% of enrollees on ACA exchanges and over 60% of enrollees in ACA-compliant plans) is that the marketplace is under-subsidized. Premiums and out-of-pocket costs are just too high at income levels above 150% FPL.
