The Biden-Harris administration has its sights set on a new future for the US healthcare system, and — yep, you guessed it — the Affordable Care Act (ACA) will be front and center. The new administration is coming into a legislature that will quickly move to protect it and expand it as it hopes to create a healthcare system that tackles key health insurance pain points for consumers: plan quality, accessibility, and costs.

The First Half-Year Will Bring Stabilization Of Coverage In Unstable Times

We expect the new administration to first look to Congress to stabilize the ACA. While the timing might be delayed, the legislature will likely be quick to act. The pandemic has brought on a recession that disproportionally impacts the nation’s lowest earners. The fate of the ACA currently hinges on a Supreme Court decision over the constitutionality of the “individual mandate” clause.

To resolve this issue and preserve the ACA, we see two primary ways this new administration will act to guarantee the ACA’s survival:

  1. Reset the individual mandate above $0, reinstating it as a constitutional tax.
  2. Pass legislation clarifying that the individual mandate is severable from the ACA.

The Next Four Years Will Focus On Coverage For More People Through An Optimized ACA

A new public option (as proposed by the Biden-Harris platform during the election) will lead to an increased number of insured individuals by offering more private insurance alternatives for consumers. The proposed plan could cover up to 25 million uninsured Americans. Under an expanded ACA and proposed plan from the new administration, we expect to see:

  • More competitive rates via a larger health insurance marketplace. This will increase competition and revise subsidies, making coverage more affordable for consumers. The proposed plan eliminates the 400% income cap on tax credit eligibility and lowers the limit on cost of coverage from 9.9% to 8.5% of income.
  • More coverage for the uninsured through auto-enrollment into a $0 premium public option. This is for individuals in states that have not expanded Medicaid coverage. According to Kaiser Family Fund, this would insure an additional 4.8 million uninsured Americans.
  • Elimination of surprise billing for all Americans. The new administration will embrace the real-time pricing information requirement for private insurers and focus price transparency efforts on the elimination of surprise billing by healthcare organizations.
  • Expanded mental health support. Amid the pandemic, we have seen unprecedented levels of enrollment in mental health solutions. The administration would seek to implement a federal mental health parity law, improve access to mental healthcare, and eliminate the stigma around mental health.

What It Means For Health Insurers, Providers, And Consumers

It is expected that the new administration will allocate a higher portion of taxpayer dollars to our healthcare system to support plans for increased and better coverage. More specifically:

  • For health insurers, there will be more money in the private health insurance system via an increased allocation of taxpayer dollars toward Medicare and Medicaid programs.
  • For healthcare providers, we expect a lost revenue stream due to the elimination of surprise billing beginning in 2022. But this lost revenue stream will be partially offset by improved insurance quality and coverage, leading to lower amounts of bad debt write-offs.
  • For consumers, expanded tax credits and a public option will help small businesses and lower-income consumers be able to afford better healthcare access and options. Consumers will benefit from expanded health options, including virtual care and mental health support.


Arielle Trzcinski and Paul-Julien Giraud contributed to this blog.