The Affordable Care Act has been shrouded in confusion and misinformation from its inception. This is partly due to partisan politics, but it’s also because consumers haven’t been given the information they need to understand the law’s impact on their lives.
The ACA is designed to help bring down health care costs by ensuring that insurance companies spend your premium dollar wisely, and by making it easier for you to shop around for the best deals. For example, the ACA requires that health insurance companies spend at least 80 percent of your premium dollars on medical care and quality improvement. If they don’t, the law requires them to give you a rebate. In fact, since the enactment of this requirement, American consumers have received nearly $2 billion in rebates from their insurance companies.
To reduce the number of uninsured Americans, the ACA made it illegal for health insurance companies to deny you coverage or charge you more if you have a preexisting condition. It also required that most U.S. citizens and legal residents obtain health insurance or pay a modest fine, and it established state-based “American Health Benefit Exchanges” through which individuals can purchase coverage with premium tax credits and cost-sharing reduction payments that lower out-of-pocket costs for people earning up to 400% of the federal poverty level.
As a result of these changes, the number of uninsured in America dropped significantly and health insurance is more affordable than ever for most enrollees. According to a new KFF analysis, a family of four with an individual marketplace plan that does not receive a premium subsidy will have to spend an average of just $456 per month on their health insurance in 2023.
The ACA also invested in expanding the network of community health centers, which provide high quality primary and preventive care to all Americans regardless of their ability to pay. In addition, it increased funding for public health initiatives such as the opioid epidemic response, the Ending the AIDS Epidemic initiative, and efforts to tackle viral hepatitis and HIV/AIDS.
Despite these improvements, the ACA hasn’t yet achieved its goal of universal health coverage. Many people who don’t have health insurance continue to face steep deductibles and copays, and the law’s attempts to curb health care costs have not been as successful as hoped. It’s important for consumers to stay informed about the status of the law so they can make choices that will improve their financial situation.