For the first time since the Affordable Care Act (ACA) was enacted more than 15 years ago, political developments are pushing congressional Democrats into direct negotiations with the GOP over key design features of the law. The odds are still long on the parties striking a compromise, but it is worth considering what might be possible if a bipartisan path were to open up. An option that is not currently on either party’s radar but should be is helping more low-wage workers stay in employer plans.

Changes to the ACA that Democrats would normally resist are now possible because Republicans control Congress and the White House. Democrats want the more generous ACA subsidies approved during the Biden administration to get extended beyond December and need Republican votes to achieve that goal. The party’s failed gambit to link reopening the government to a subsidy extension did not help their cause.

The GOP is already signaling directionally where it would like to go, which is toward “individualization” of ACA subsidies. Instead of sending premium credits to health insurance companies, Republicans want to give them directly to eligible households. That could be a constructive development, but the details will matter.

For some Republicans, the point is to help patients pay for medical services instead of insurance. That seems to be what Senators Rick Scott and Bill Cassidy have in mind. It is not clear if individuals would be eligible for support if they were not enrolled in insurance. The value of the enhanced ACA credits is far less than the charges patients receive when major health problems present themselves.

President Trump seems to have a different take on the same basic idea. He has indicated support for allowing individuals to use ACA subsidies to pay directly for care, but he also mentioned allowing consumers to use them to buy insurance outside of the ACA exchanges. That possibility begs the question of what rules would apply in this non-ACA insurance market.

The answer most Republicans would give is sure to make Democrats uncomfortable. The GOP has long argued that the ACA hurt young and healthy consumers by making them pay the same rates as less healthy enrollees. Democrats argue the ACA’s insurance rules are critically important to protecting the sick. If the GOP pushes to allow the credits to be used to buy insurance outside of the ACA’s regulatory boundaries, Democrats will balk.

There is another possibility, however. Instead of reopening the debate over pre-existing conditions and insurance rules, Congress could allow very low-wage workers to opt to use their credits to partially pay for premiums or cost-sharing associated with employer-sponsored insurance (ESI).

There are reasons both parties should see advantages in this approach.

For Republicans:

• It would slow the migration out of ESI. Under current law, low-wage workers get much more support when they enroll in ACA plans than they do when agreeing to take offers of ESI. The ACA’s “firewall” is supposed to stop the movement of workers out of ESI, but it is not airtight. Allowing some very low-wage workers to get a partial subsidy for ESI enrollment would offset some of the financial advantage the ACA has over ESI.
• ESI offers a more flexible insurance market than does the ACA and provides a degree of resistance to ever-growing federal control.
• Tying subsidies to ESI enrollment would promote work and encourage more employers to make coverage available to their employees.

For Democrats:

• It would give more low-wage workers access to open-network coverage that is often only available to higher-income households. ACA plans tend to come with narrow networks that make accessing services more challenging.
• Supporting ESI could unlock more generous support for low-wage workers without altering the ACA’s current insurance rules.

A major complication is the potential cost of allowing subsidization of ESI enrollment. Under current law, low-wage workers in ESI are barred from receiving the ACA’s premium credits. Their employer plans come with a federal tax subsidy, but that support is worth much less than the ACA’s credits. It would be prohibitively expensive to make ESI enrollees eligible to receive the ACA’s insurance subsidies.

To keep costs down, eligibility for ESI enrollment support should be restricted, perhaps by limiting it to workers with household incomes below 200 percent of the federal poverty line (FPL). Further, the value of the credits should be capped at levels that can be easily offset with other savings, such as $500 to $1000 per person annually. Although less than the ACA credits, this support would help low-wage workers who prefer ESI to the ACA to act on that preference.

Allowing the very lowest wage workers to get ESI would be an important step away from the ACA’s federally regulated and controlled market.