For the sake of argument, I'm going to assume that amount is $2,500 for an adult and $8,000 for a family of four. That's the Congressional Budget Office estimate of the cost of enrolling new people in Medicaid.
Under this proposal, when an individual enters the exchange, there would be no need to look to the Internal Revenue Service, the Social Security Administration or to ask what insurance is available at the place of work. Why? Because everyone would know from the get-go what the subsidy is.
The tax subsidy for employer-provided insurance would be exactly the same as it would be in the exchanges. Since every individual and every family would receive the same help from government, those subsidies would be the same regardless of whether people obtain the insurance at work, in an exchange or in the marketplace. It wouldn't matter whether they work less than 30 hours a week or more; whether their workplace has fewer than 50 employees or more; and whether they are in a union or not.
This approach would not encourage employers to avoid hiring new workers. Nor would it encourage employers to drop health coverage for current employees or for their retirees. It also would not favor small business over large business, or vice versa.
Here is another idea that would make the transition to a new system even smoother: Allow people participating in Medicaid to claim the credit so they can buy private insurance and let anyone in the private sector buy into Medicaid.