The Affordable Care Act – Making Health Insurance More Available, Affordable, and Understandable

affordable care act

The Affordable Care Act (ACA or Obamacare) makes health insurance more available, affordable, and understandable. It puts information for consumers online, creates a marketplace where individuals and small businesses can compare different health plans on a level playing field, and provides subsidies (through premium tax credits and cost-sharing reduction payments) to make coverage more affordable. It also expands the Medicaid program to cover more low-income Americans. It encourages integrated care systems and provides incentives for doctors to join together in accountable care organizations to improve the quality of their patients’ care, prevent disease, and reduce costs.

The ACA made it possible for people with preexisting conditions to get health insurance by banning insurers from denying coverage or charging higher rates because of these illnesses or injuries. It required every health plan to offer essential health benefits like prescription drugs, hospitalization, maternity care, and mental health treatment. It also prohibits lifetime monetary caps on coverage and allows young adults to stay on their parents’ policies until they are 26 years old.

Moreover, it eliminated annual limits on coverage and prevents insurance companies from canceling or rescinding existing policies. It requires that 80% of insurance company revenues be spent on actual medical care and improvements to healthcare facilities. The ACA’s strong consumer protections also include a requirement that all health insurance plans provide free or lower-cost preventive services like vaccinations and screenings.

In addition, the ACA makes Medicare more financially sustainable by preventing big cuts in its provider networks. It also provides additional funds for seniors to receive home and community-based health services. It also includes a provision that allows people to use tax-deductible contributions toward the cost of private health insurance plans.

Although the ACA has brought millions of previously uninsured persons into the insurance market, the current structure of the individual and small-group markets, high out-of-pocket costs for many ineligible for premium subsidies, tepid insurer participation, and a lack of transparency about pricing and enrollment procedures have prevented it from achieving its full goal of universal coverage.

It is still too early to determine how the law will play out in the long term, but recent events such as the elimination of the individual mandate penalty starting in 2019, the approval of waivers for contraceptive coverage and cost-sharing reductions, and continued uncertainty about the future of the individual insurance market may threaten its effectiveness. The AMA remains committed to a comprehensive solution that will restore market stability, promote transparency and affordability, and ensure that all Americans have access to the health coverage they need. This is the only way to continue bringing the country closer to the vision of universal coverage. We need to do everything we can to encourage enrollment, increase insurer participation, and ensure that the system is working for everyone. We will continue to advocate for the most effective and equitable policy options to achieve this objective. The AMA supports a comprehensive solution that includes expanding the availability and accessibility of private marketplace coverage, increasing funding for community clinics that serve patients regardless of their insurance status, and making sure that all Americans have access to the best health care possible.