By NextBestFitPhase 1: Enactment & build · Step 1.11
Rewrite insurance & benefits law
Effective in stages with each enrollment wave · Congress; DOL EBSA; Treasury; state insurance commissionersDiscuss this step
Pros & cons of this step
Pros
- +Prevents a duplicative tier from draining capacity.
- +Ending the exclusion removes a regressive subsidy that is worth more to high earners.
Cons
- −The duplicative-coverage ban is a restriction on voluntary contracts; it will be litigated.
- −Employers lose a flexible, tax-favored tool for recruiting.
- Equity of a single tier vs. liberty to buy more.
high confidence
Choice: of plan vs. of doctor
People lose the choice of insurance plan but gain an unrestricted choice of doctors and hospitals, since networks disappear.
Today
Choice of plan is mostly the employer's choice: about half of firms offering coverage offer only one plan type. Narrow networks are common in Marketplace and MA plans.Under the plan
One plan for everyone; every participating provider is in network.Who gains
- People in narrow-network plans
- People who change jobs or move
Who loses
- People who valued choosing between plans (e.g., MA vs. traditional Medicare)
- People who would buy faster access if allowed
Magnitude: Qualitative.
- Canada, TaiwanFree choice of physician within the public system; no plan choice.
Mitigations
- Integrated care organizations provide a choice of care model.
Risk that remains: Opted-out providers create a de facto cash tier for the wealthy.
Trade-off behind each system change
- COBRA continuation coverageNo longer needed: coverage no longer depends on a job.
- IRC §106 exclusion of employer health coverageRemoves a regressive subsidy worth more to high earners; workers see higher taxable wages instead of tax-free benefits.
- IRC §125 cafeteria plans & Flexible Spending AccountsSimpler; benefits administrators lose FSA business.
- Health Savings Accounts (IRC §223) and high-deductible plansEnds a tax shelter mostly used by higher earners; savers lose a tax-advantaged account.
- HRAs, ICHRA & QSEHRANo longer needed.
- ERISA (employer benefit plans) & its preemption of state law (§514)Large multistate employers lose uniform federal treatment of their remaining benefits.
- ACA insurance market rules (guaranteed issue, community rating, essential health benefits, MLR)None for patients; insurers face strict rules on a much smaller market.
- Ban on duplicative private insurance (new)Keeps one queue; removes a private fast lane (see access trade-off).
- State insurance departments & mandated benefitsStates lose revenue and regulatory reach.
- Short-term limited-duration plans, fixed indemnity plans & health care sharing ministriesRemoves products that left people underinsured; members of sharing ministries lose a faith-based arrangement they chose.