The Affordable Care Act (ACA) is a landmark United States federal statute enacted by the 111th Congress and signed into law on March 23, 2010. Its goals are to provide universal health coverage, prevent growth of health care costs, and promote quality healthcare. Its key mechanisms are to expand Medicaid to cover all Americans with incomes up to 133% of the poverty level and to establish state-based American Health Benefit Exchanges through which individuals and small businesses can purchase health insurance.
The ACA contains numerous tax provisions that affect individuals, families, businesses, insurers, and other organizations. These changes include the creation of state-based health insurance exchanges, expansion of Medicaid, and the creation of new tax credits that help people afford private insurance. The ACA also includes new consumer protections and resources to make the healthcare system more transparent and competitive.
Achieving a Comprehensive Coverage and Cost Model
While the ACA makes a significant impact on the American health system, it has been hampered by several barriers to its success. The primary challenges are rooted in the way the health system is organized and paid, the availability of information and choices, and the ability of participants to respond to the incentives embedded in reform. These issues are often overlooked, but they limit the ACA’s ability to achieve its main objectives.
Achieving a Comprehensive Policy: The ACA’s most important policies are its requirements that insurance plans must include a wide array of essential benefits and must not charge more to people with pre-existing conditions than they charge to healthy individuals. In addition, it limits lifetime monetary caps, establishes state rate review procedures for premium increases, and requires that plans offer affordable catastrophic coverage.
Using the Patient’s Bill of Rights: The ACA provides a set of rights to protect you from abusive practices in the insurance market. The law prohibits insurance companies from denying or charging more for coverage because of a pre-existing condition, requires that children get covered even if they have an existing health problem, and ensures that young adults can remain on their parents’ policy until age 26.
Achieving a Patient’s Choice: The ACA makes it easier to shop for health insurance, by creating state-based insurance exchanges and imposing new regulations on plans in the individual and small group markets. The law also allows consumers to compare health plans based on the level of benefits they receive and the amount they will pay.
The ACA’s requirement that all plans provide a substantial level of maternity and habilitative services is likely to be particularly beneficial for women and individuals with developmental and intellectual disorders, who will no longer be denied coverage for obstetrical and gynecological care and habilitative services to maintain or improve their skills. The ACA also limits the use of annual caps on coverage, and it requires that plans offer comprehensive and affordable catastrophic coverage to individuals under the age of 30.
The ACA also contains provisions that give individuals the power to negotiate with insurance companies to reduce their insurance premiums. The law allows states to block unreasonable premium increases, and it authorizes HHS to impose penalties on large employers who do not offer sufficient health insurance to their employees. While these actions may have some effect, they do not address the larger barriers to access and affordability that still exist in the individual health insurance market.