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Affordable Care Act (ACA) - State Health Policy

Summary

Eight years since its enactment, the Affordable Care Act (ACA) is still the law of the land. The ACA ushered in comprehensive reforms and has transformed the U.S. health care system by extending access to coverage, providing consumer protections and essential benefits, and improving quality of care for millions of Americans. Under the ACA, nearly 20 million people have received coverage and the uninsured rate dropped to 8.8 percent in 2016.

The ACA established marketplaces (also called exchanges) where individuals can, during an annual open enrollment period, purchase one of four levels of coverage as well as receive progressive income-based premium subsidies (meaning the lower one’s income, the higher the subsidy) if their incomes fall between 100 and 400 percent of the federal poverty level (FPL), and cost-sharing subsidies for persons with income up to 250 percent of the FPL.  The law also sets actuarial value requirements to ensure that each plan offered through the marketplaces covers a minimum set percentage of total costs to the enrollee (deductibles, premiums and co-payments combined).  The ACA also gives states the option to expand their Medicaid programs to cover all adults with income below 138 percent of the FLP. Thirty-three states to date (including DC) have expanded their Medicaid programs.

In addition, the ACA established basic consumer protections including no lifetime or annual dollar limits on coverage; prohibits insurers from denying, cancelling or charging higher premiums to people with pre-existing conditions;  requires all health plans to cover 10 categories of essential health benefits; and prohibits insurers from charging higher premiums to women based solely on their gender.

In 2018, under this Trump Administration and GOP-led Congress, repeated attempts have been made to repeal and replace the Affordable Care Act, or otherwise weaken the law through executive action. Those efforts have largely failed with the exception of the following:

Repealed the Individual Mandate — The Tax Cuts and Jobs Act, H.R. 1, which was enacted in December 2017, included a provision that repeals the individual insurance mandate which requires individual to have health insurance of some kind or else pay a penalty. The repeal of this mandate will cause tens of millions of Americans to lose coverage, premiums to rise sharply, and insurers to pull out of the health insurance marketplaces.

Ended the Cost Sharing Reduction (CSR) Payments — The Administration ended CSR payments to insurers which help lower deductibles and other out-of-pocket health care costs for roughly 6 million low- and moderate-income people who enroll in the “Silver” plan. This action will raise costs for consumers and further disrupt health insurance markets.

Shortened the Enrollment Period — For health insurance enrollment in 2017, the Administration shortened the enrollment period from 90 days to 45 days and significantly curtailed their efforts to educate, promote, and enroll people in the exchanges. 

All of these efforts have already, or will cause, significant disruption in the insurance market and potentially in people lives and their ability to access the care they need.

ACP has supported the ACA throughout its implementation because, on balance, it has made tremendous strides in making health coverage more accessible and affordable to most all Americans.  That is not to say that the ACA is perfect, no law is, and ACP has continually worked with Congress at every turn to offer feedback and recommendations to improve the law.  Going forward, ACP will urge Congress to take steps to stabilize the individual insurance market by advocating for bipartisan approaches such as, establishing effective re-insurance programs and restoring cost-sharing reduction payments to keep premiums down and make it attractive for insurers to offer plans in the marketplaces. Key leaders in the Senate have been working on the development of a market stabilization proposal but the fate of that is unclear at this time.

Resources

For questions, please contact Ryan Crowley at rcrowley@acponline.org.