The Affordable Care Act, also known as ACA or Obamacare, is our current U.S. healthcare law signed in 2010 by former President Barack Obama. The purpose of this act is to decrease the uncompensated care for low and average income families in the country. The ACA was designed specifically to reduce the health insurance coverage costs for qualified people or families in the U.S., focusing on cost-sharing reductions and premium tax credits to help low-income families by lowering costs for them. What’s been happening with the ACA in ten years, and what is its impact on the healthcare market in the U.S.?
The History of the ACA and Healthcare After COVID-19
The History of the Affordable Care Act
In 2010, former President Barack Obama signed the ACA with the purpose of reforming the U.S. healthcare system. A year later, in 2011, the House wanted to cancel the law, but the Senate rejected this cancellation. By the year 2011, 22 percent of the U.S. population believed that the ACA had been canceled already.
In 2013, the government made significant tax changes. For instance, medical expenses for individuals must be at least 10 percent of income, and people making $200,000 in salary would be required to pay higher taxes, including 3.8 percent on capital gains, dividends and Medicare. Medical device manufacturing companies and businesses would pay a 2.3 percent tax.
In 2015, the Supreme Court stated that the government has the right to provide subsidies in different states, especially ones that had not set up their exchanges.
A few years later in 2018, the government asked health insurance companies to make an informed decision on offering plans on the exchanges for the following year. Areas too small were dropped by the companies. For instance, 963 counties have only one health insurance company. Experts argue that if the Trump administration won’t enforce the mandate requiring people to pay a tax or buy insurance, more and more companies are going to drop out.
The Current Status of the ACA
Currently, the ACA still offers the same rights, benefits, and protection. For instance, not only does it offer protection for preexisting health conditions, but it also provides benefits like cost assistance. In most states, there is no fee if you don’t have health coverage this year. There is an expansion in ACA alternatives – the purpose of which is to provide more options to individuals and families looking for limited benefit coverage (short-term coverage).
The benefits and protections of the Affordable Care Act apply to major medical plans in the healthcare market. However, they are not applicable for short-term coverage. In 2019, an open enrollment option was provided so that individuals could enroll in a plan for 2020 coverage.
In 2020, the administration has decided to expand CHIP and Medicaid in many states of the country. A person’s income, size of family, and access to other insurance coverage decide the type of cost assistance. In general, there are three types of cost assistance: Medicaid/CHIP, Premium Tax Credits, and Cost-Sharing Reduction Subsidies.
Medicaid offers free or low-cost coverage to individuals in numerous states – for example, this is beneficial for single adults. On the other hand, for families, they offer low cost coverage in all states throughout the year.
Premium Tax credits are offered only during open enrollment. In addition, Cost Sharing Reduction Subsidies are reducing out-of-pocket assistance. This type of cost assistance is offered only during open enrollment on marketplace silver plans.
The ACA and the U.S. Population
Ten years after the passage of ACA, it is still one of the hottest topics in public policy debates. The ACA has reshaped private insurance in different ways. The ACA established minimum consumer protections at the federal level. For instance, the ACA prohibited insurers from discrimination based on health status – they could not charge higher premiums or turn people away due to pre-existing health conditions.
The Affordable Care Act is constantly debated as a matter of public opinion however, it is acknowledged as a historic accomplishment when it comes to health insurance coverage and making reforms to the healthcare market. In many aspects, health insurance coverage plans for the majority of U.S. citizens remain unchanged – Obamacare left an ineffaceable mark on the overall U.S. healthcare system via its insurance coverage expansion.
The entire purpose was/is to enhance the health delivery system. In the last 10 years in the U.S., we have seen a considerable drop in the number of uninsured people. The ACA has sought to make an impact on quality and cost of care. So much so, Obamacare or ACA is still facing several challenges, which will add uncertainty to its legacy and impact.
Before the implementation of ACA, cancer was considered a preexisting condition that people could barely get insurance for. Most companies would not cover treatment for cancer and related disorders, because the injury or illness occurred before an individual was covered by their insurance plans. However, under the ACA, a person cannot be denied insurance coverage because of this pre-existing health issue. This is one of the touchstone aspects of the ACA.
The Future of the ACA and COVID-19
Recently, the Affordable Care Act has increased coverage by expanding Medicaid eligibility. In 2019, there were over 18 million fewer people in the U.S. lacking coverage as compared to 2010.
The COVID-19 health crisis has stunned the world’s economy. Hundreds of thousands of businesses are affected and the personal health of each individual is at stake. It’s an alarming situation for the U.S. and the rest of the world.
The COVID-19 outbreak is continuously putting pressure on the economy and healthcare system. Experts say that we could soon face another recession if we don’t try to normalize our economy, but lack of social distancing could cause an overrun, overworked health system. In this regard, the government is making substantial efforts to keep the repercussions minimum. The ACA will provide additional insurance or coverage options for people who are losing their jobs due to the pandemic. Since the beginning of the ACA, this will be the first economic recession in the country, so the ACA law is likely to provide protection and safety to people losing employment-based health insurance—something that has never been done before in U.S. history. Likewise, the ACA is incorporating new insurance standards to ensure people have easy access to care.
Despite the efforts being made, there will still be gaps in our healthcare system. Due to the COVID-19 outbreak, the future of our healthcare is right before our eyes, staring us in the face. In general, experts say that the ACA will decrease enrollments for health insurance by 14 million individuals in 2020, but by 2026, estimations highlight that over 20 million people could face the loss of health insurance still. On the one hand, there is a decline in uninsured people – i.e. 27 million for the last couple of years, but chances are that the ACA will face further problems due to the pandemic.