The Affordable Care Act (ACA) was passed into law in March 2010 and set new standards and opportunities for health care in the United States. This law has a huge impact on individuals and employers alike. Large employers with more than 50 employees are now required by law to provide health insurance coverage for their employees, and small employers can opt to buy coverage through a public exchange. However, not all ACA provisions are implemented as intended, and some are even being challenged in court.
The individual mandate, for example, requires everyone to have insurance or pay a fine. The limits on open enrollment are designed to prevent insurance death spirals, minimize the free-rider problem, and prevent adverse selection of individuals in the healthcare system. One notable exception to this rule is the status of illegal immigrants, estimated at eight million, about a third of the estimated 23 million people in the United States. These individuals do not qualify for Medicaid or insurance subsidies, but they are eligible for emergency services.
As a result, judicial and legislative challenges have come to light in recent months. In the case of King v. Burwell, the Supreme Court upheld the constitutionality of the individual mandate. In addition, it determined that eliminating the individual mandate would lead to the uninsured status of approximately 12 million people. But the Court found that the individual mandate is essential to promoting universal coverage. That means that there are some states that refuse to implement the ACA.
There are a number of federal provisions that have limited the state’s ability to enact their own health care laws. For instance, the ACA requires that insurance plans issued after March 23, 2010 cover certain preventive services and screenings for adults without cost-sharing. Moreover, the federal share of Medicaid funds will increase by one percentage point for certain preventive services. And the ACA also includes provisions that allow states to defer federal health care policy decisions to state legislatures.
As of Oct. 2012, the Affordable Care Act will require most U.S. citizens and legal residents to purchase health insurance. It also provides tax credits for health insurance costs, such as premiums. Individuals are also required to carry insurance, and exceptions can be granted for religious or other reasons. The Affordable Care Act also requires the creation of state-based and multi-state insurance exchanges. It also prohibits health plans from excluding coverage for pre-existing conditions, thereby allowing those who are eligible to stay insured.
Despite the positive effects of the Affordable Care Act, a substantial number of Americans remain uninsured. A recent RAND study showed that nearly 52 million Americans would have otherwise been eligible for coverage under the Act. However, after major provisions of the ACA take effect, about 33 million Americans will gain coverage through Medicaid, but nine million will remain uninsured. These individuals are still subject to high health care costs, despite the availability of health insurance subsidies.