How Biden's Coronavirus Plan Will Fill the Holes in Obamacare - By Jonathan Chait

[DonViejo]

By Jonathan Chait


Democrats have spent the past 11 years beating back Republican efforts to dismantle, repeal, or sabotage the Affordable Care Act. Over time, the issue has transformed from a Democratic political liability to an advantage. And now that the Democrats control the federal government again, they are moving into a new stage of expanding the law.

Obamacare has two major flaws that have hampered its ability to cover the uninsured. One was created by Senate Democrats, and the other was created by Chief Justice John Roberts. The coronavirus-relief legislation begins to fix both these flaws. If it is signed into law, millions of Americans will gain access to health insurance and millions more who have insurance will pay less.

The goal of Obamacare was to create universal coverage without the politically toxic step of disrupting existing insurance arrangements. It did this through a combination of methods. The lowest-income uninsured would be covered by an expansion of Medicaid. People at a higher income level would gain access to a newly regulated and subsidized individual insurance market. Insurers would no longer be able to pick off healthy customers and deny coverage (or charge exorbitant rates) to people with preexisting conditions. Instead, the new exchanges would require insurers to sell plans regardless of health status, and people buying in would get tax credits to defray the cost.

The tax credits were too stingy, because Democrats needed 60 Senate votes to pass the law, and their most conservatives members were more concerned about holding down the law’s overall cost than optimizing coverage. The subsidy cutoff is especially harsh for middle-class people earning just over $50,000 a year.

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