An Offer You Can't Refuse: Estimating the Coverage Effects of the 2010 Affordable Care Act

“In our most dynamic case, when all covered employees are compensated in higher wages to offset their payment
of the full ESI premium in order that some will be able to take full advantage of an affordable coverage rule that
is broadly interpreted to mean affordable family coverage, we estimate that the movement of workers out of ESI
and into exchange-based coverage will: 1) overwhelm the number of workers moving into ESI by currently
uninsured workers in large firms due to the mandates; 2) cause the provision of health care insurance to working
Americans to become more sharply segregated based on family income; and 3) cost taxpayers up to $5 billion
dollars in gross subsidies for every one million workers who switch from being an ESI main policy holder to
receiving subsidized exchange coverage, all else equal. As a result, we estimate that increased exchange use in
the most dynamic case will require about $47.5 billion more in gross yearly subsidy payments than in the least
dynamic case.”