Democrats' next ACA frontier: out-of-pocket costs

A new bill hints at what could be the Democrats' next goal in incremental expansion of the ACA: lowering out-of-pocket costs.

Why it matters: Despite record ACA enrollment and historically low uninsured rates, millions of Americans — including those with health insurance — struggle to pay for care because they can't afford their deductibles and other cost-sharing.

• Democrats have already made ACA premium subsidies more generous since President Biden took office, and now they want to lock in those higher subsidies — and go beyond.

Driving the news: Sen. Jeanne Shaheen reintroduced legislation last week that would make the enhanced ACA premium subsidies permanent rather than letting them expire after 2025, as they would under current law.

• The bill also ties the value of the subsidies to a more generous plan, which would effectively lower enrollees' out-of-pocket costs.
• Finally, it would increase the value of the ACA's cost sharing reduction subsidies for people with incomes between 100% and 250% of the federal poverty level — the currently eligible population — and make them available for people up to 400% of poverty.
• The bill's cosponsors include Tammy Baldwin, Bob Casey, Tim Kaine, Amy Klobuchar, Ben Cardin and Kirsten Gillibrand — all up for re-election next year.

The big picture: Out-of-pocket costs have risen from the ACA's passage in 2010 through 2020, meaning it's common today for even covered Americans to find care unaffordable.

• A survey by the Commonwealth Fund last year found that nearly a quarter of working-age adults were underinsured, including 29% of people with employer coverage and 44% of those with coverage through the individual market.
• That makes costs a ripe political target.

Yes, but: Approaches like Shaheen's don't lower underlying health care costs. Instead, they increase the level of government financial assistance. That, of course, increases the burden on taxpayers.

• Democrats say the Inflation Reduction Act's prescription drug provisions demonstrate their commitment to cost containment. But that law's impact is limited to Medicare, and neither party has much of a track record of going after provider costs.
• But some Democrats are hinting that they're interested in underlying cost reduction.
• “We’re going to be all about containing costs this session," Finance Chairman Ron Wyden told me when I asked him about Shaheen's bill, citing the need to give people more bargaining power to bring down their costs.

What we're watching: Shaheen's bill is unlikely to go anywhere while Republicans hold the House. But ACA incrementalism is an easy health care goal for the party to coalesce around compared with more progressive policies like Medicare for All.

• So it would be unsurprising if more Democrats start messaging about the need to address cost sharing, even while avoiding some of the harder conversations about underlying prices.