As the 46th president of the United States, Joe Biden has some big plans when it comes to healthcare. In his healthcare plan, President Biden says he plans “to build on the Affordable Care Act by giving Americans more choice, reducing health care costs and making our health care system less complex to navigate.”
So, what does this mean and how exactly does the President plan to accomplish his goals? Below, we provided a quick breakdown of The Biden Plan and how it may affect Brokers and their Small Groups.
Reinstate the Individual Mandate
After President Donald Trump repealed the individual mandate when he signed the Tax Cuts and Jobs Act into law in 2017, President Biden has said that he will bring back the penalty for not being covered under health insurance.
This should not have much of an effect on Small Groups. Essentially, the individual mandate means that if someone is covered under a health plan offered by an Employer or a government program like Medicare, they can continue to be covered under those programs. However, if someone is not covered nor exempt, then they must purchase a health plan or pay the shared responsibility payment when filing federal income taxes.
Enact a Public Option Under the ACA
If a consumer is not satisfied with their current health insurance plan, whether they are covered under an Employer plan or purchase insurance on their own, President Biden plans to give them the choice to purchase a public health insurance option like Medicare. For Small Groups, this may bring relief to those struggling to afford coverage for Employees.
According to the Kaiser Family Foundation, in 2019, Employers paid 82 percent of health insurance for single coverage and 70 percent for family coverage, which equated to an average of $5,946 and $14,561 a year respectively for each covered Employee. With the public option, some Employees may choose to go off of their Employer health plan in favor of a more affordable ACA option. This would mean that Employers would no longer have to bear the weight of those healthcare costs, which could help improve their bottom line.
Increase Tax Credits to Lower Premiums
As part of Biden’s healthcare plan, the President also plans to ensure that those who receive insurance through the ACA marketplace will receive a higher tax credit than they currently do. Currently, families that make between 100 percent and 400 percent of the federal poverty level are eligible to receive a tax credit to reduce how much they have to pay for health insurance on the individual ACA marketplace. The problem, Biden says, is that many families make more than 400 percent (about $50,000 for a single person and $100,000 for a family of four) and don’t qualify for financial assistance.
To make healthcare more affordable for more people, Biden plans to eliminate the 400 percent income cap on tax credit eligibility. Additionally, he also plans to lower the limit on the cost of coverage from 9.86 percent to 8.5 percent. This means that individuals purchasing healthcare from the ACA marketplace won’t pay more than 8.5 percent of their income on health insurance. For example, under Biden’s plan, a family of four with an income of $110,000 a year would save an estimated $750 a month on insurance, cutting their premiums almost in half.
These are just a few of the many proposals President Biden has to cut the cost of health care and make the system easier to navigate. You can learn more about The Biden Plan here.
In the meantime, FormFire will be keeping a close eye on any changes within the healthcare marketplace. We’re actively working with Brokers, Employers and Carriers to ensure the quoting, selling and enrollment of Small Group benefits is streamlined from start to finish. Contact FormFire today to schedule a consultation and request a demo of our industry-leading software.