At a Glance | March 21, 2019 What Lies Ahead for the Employment-Based Health Benefits System? 2 LOOK ING AT SUBSIDIE S Current Federal Health Insurance Forgone Tax Revenue 1 Subsidy per Individual Although employment-based coverage incurs the lowest Employment-based coverage Federal subsidy under current law per-person subsidy, it is the $1,722 $272 Billion largest tax expenditure in the Individual/“Non-group” Subsidy limited to individuals below 400% of the federal U.S. budget. The “forgone tax poverty level (FPL) $6,111 revenue” associated with the $125.6 Billion employment-based health Medicaid/Children's Health Insurance Program Subsidy limited to individuals below 400% of FPL and capped $4,418 benefits system makes it a $101.9 Billion target for policymakers. Capping, reducing, or eliminat- Subsidy for employment-based coverage eliminated and individuals moved to non-group market (below 400% FPL only) ing the tax preference could $445.7 Billion generate additional tax revenue. 3 A R A NGE OF PROPOSA L S Proposed Health Insurance Benefit Plans Several bills are likely to be introduced or reintroduced in PLAN ELIGIBLE INDIVIDUALS EMPLOYER IMPACT 2019. They include single-payer Expanded and Improved All U.S. residents. Replaces private insurance, including Medicare for All Act employment-based coverage. Prohibits proposals such as Medicare- Sen. Sanders/Rep. Ellison employers from providing duplicative for-all, a public plan option, health benefits. and Medicare and Medicaid Medicare-X Choice Act U.S. Citizens, lawfully admitted permanent residents, not Small employers and their employees buy-in proposals. Sen. Bennet/Rep. Higgins incarcerated, and not otherwise eligible for Medicare. and dependents have access through Offered in individual market beginning in 2020 in areas the small group insurance market. with one issuer or high costs due to provider shortages, Medicare-X offered in small group market Some would have no direct then in all areas by 2023. beginning in 2024. impact on the current The CHOICE Act U.S. Citizens, lawfully admitted permanent residents, Small employers and their employees/ Rep. Schakowsky/Sen. not incarcerated. participants have access through the employment-based system. Whitehouse SHOP marketplace. However, they could affect Medicare at 55 Act U.S. citizens or nationals ages 55 to 64, residing in the No provision. the extent to which employers Sen. Stabenow U.S. or lawfully admitted for permanent residence in continue to offer health the U.S., and who are not otherwise entitled to/eligible for benefits under Medicare Parts A or B. benefits, as well as the manner Medicare Buy-In and Health Ages 50 to 64 not otherwise entitled to Medicare Employer may pay premiums on eligible in which they offer them. Care Stabilization Act Part A or eligible to enroll under Medicare Part A employees behalf, if enrollment is choice Rep. Higgins or B, who would be eligible/entitled if age 65 or older. of the individual and not employer. Medicare Extra All lawfully present individuals in the U.S. would be May offer Medicare Extra, and workers Center for American Progress eligible for Medicare Extra. Newborns and individuals would have the option to choose it over turning age 65 would be automatically enrolled. employment-based coverage. State Public Option Act Individuals who are residents of states electing to No provision. Sen. Schatz/Rep. Lujan establish the Medicaid buy-in option, who are eligible to participate in the marketplace, and who are not concurrently enrolled in other health coverage. Healthy America Program All lawfully present people younger than 65. No provision. Urban Institute SOURCE: Paul Fronstin. “What Does the Future Hold for the Employment-Based Health Benefits System?” EBRI Issue Brief, no. 476 (Employee Benefit Research Institute, March 14, 2019). 1. EBRI estimates based on data from the Congressional Budget Office for people under age 65, 2018. 2. EBRI simulations. 3. Adapted from the Kaiser Family Foundation, Side-by-Side Comparison of Medicare-for-All and Public Plan Proposals. © 2019 EBRI Other Medicaid Buy-In Medicare Buy-In Public Plan Option Single Payer