Tweak the Affordable Care Act to mandate backstop health insurance

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Universal health coverage in the US—once considered a hopeless goal without a single-payer plan in place—is surprisingly within reach. Thanks to the Affordable Care Act and increased subsidies in the 2021 US rescue plan 91% Americans now take out health insurance.

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Bridging the gap will be a win-win for the uninsured, healthcare providers and for policyholders who will see lower premiums through wider shared risk.

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But using only additional federal subsidies to achieve universal coverage would be too costly. Congressional Budget Office Estimate That permanent expansion of the increased subsidies would cost the government more than $25 billion annually. The pricing subsidies can be high enough to entice more people into the ACA Marketplace which can be many times higher than the figure.

A better answer is to create an individual health insurance mandate that would be more politically palatable than the ACA version. Let me explain

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The ACA included a tax penalty of up to $2,085 per family For those who haven’t signed up for a plan. Although the ACA’s mandate followed the approach used by the Massachusetts Predecessor Plan (sometimes referred to as “Romanicare”), which was widely accepted in that state, the ensuing partisans to repeal the ACA. The fight was a demonstration of that approach to the mandate. , What economists saw as a way of sharing responsibilities and risks – and reducing the cost of expanding coverage – was seen by many Americans as an overabundance of government. As a result, Congress repealed the tax penalty in 2019.

Have a more effective and friendlier approach “Backstop” Insurance, Here’s how it would work:

Imagine an uninsured person who seeks care in the emergency room. Once the hospital determines that the patient is not insured and does not qualify for Medicaid, the patient will be automatically enrolled in a “backstop” plan in the ACA marketplace. Like all Marketplace plans, the Backstop plan will pay claims and scale premiums as per your ability to pay through existing ACA subsidies. In tax filings after the end of the year, individuals covered by a backstop plan will be charged premiums retroactively based on the number of months not covered by other insurance.

Auto-enrollment can effectively create universal coverage, because any time individuals lack any other source of coverage, they will be covered by the Backstop plan. Backstop plans will provide temporary coverage, after which individuals will be converted to traditional individual market plans.

Of course, there will be details to work out. Should the government run the backstop scheme effectively by making it a “public option” insurance scheme? Alternatively, private insurers may compete for the ACA marketplace to be designated as a back-up plan. Or several private insurers may offer back-up plans on an exchange, with the government assigning uninsured individuals to plans with lower premiums.

Additionally, the ACA Marketplace will require the use of various risk-management tools to account for some individuals choosing backstop insurance rather than paying for coverage at a higher premium level.

The increased subsidies in the US rescue plan—initially designed to help the country get through the COVID pandemic—could make backstop insurance more acceptable than before as compared to the premium required to file taxes may be less. Original ACA. The fact that increased subsidies were recently extended through 2025 in the Inflation Reduction Act makes it likely that they will continue, although Congressional budget practices are unlikely to turn them into an obvious right.

Other countries that use private insurance to obtain universal coverage, such as Switzerland, the Netherlands and Germany, make effective use of covering essential persons. The approaches used more closely resemble the backstop scheme than the original ACA approach of penalties for the uninsured. It would be a shame, to come so close to the goal of universal coverage, to hold back when America has the tools in hand to achieve it.

Paul B Ginsberg He is a Senior Fellow at the USC Schaefer Center for Health Policy and Economics and Professor of the Practice of Health Policy at the USC Price School of Public Policy.

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