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Affordable Care Act (ACA) - State Health Policy

Summary

Eleven years since its enactment, the Affordable Care Act (ACA) is still the law of the land.  The ACA ushered in comprehensive reforms and have 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, 31 million people have received coverage and the uninsured rate dropped to 8.8 percent in 2016. Since then, we have seen an increase in the uninsured rates for some groups and after years of decreasing uninsured rates, the U.S. saw coverage gains stall or reverse for some groups (see latest insurance stats). 

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).  States can expand their Medicaid programs to cover all adults with income below 138 percent of the FLP. Thirty-nine states (including DC) to date 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 and 2019, the Trump administration and GOP-led Congress, along with the courts, attempted to repeal the law or otherwise weaken it through executive action. Those efforts included repealing the individual mandate, shortening the health insurance marketplace open enrollment period, and expanding the availability of health plans that do not comply with the ACA’s consumer protection and health insurance regulations. The Biden Administration has taken a different approach by reversing policies that reduced coverage and increasing funding for health insurance marketplace outreach and education. On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 which expanded the generosity and eligibility for ACA premium tax credits through 2022.

Texas v. United States – In December 2018, a federal district judge ruled the entire ACA is unconstitutional. The judge’s ruling stated that the ACA’s “individual mandate”—a requirement that most Americans maintain “minimum essential” coverage or face a tax penalty—was no longer constitutional and the rest of the law cannot stand without it. The ACA remained in place pending appeal. In March 2019, the U.S. Department of Justice filed a brief supporting the decision that invalidated the ACA. In April 2019, the U.S. House of Representatives filed a brief that warned of chaos in the health care system if the ruling was upheld. ACP, together with the American Medical Association, the American Academy of Family Physicians, the American Academy of Pediatrics, and the American Academy of Child and Adolescent Psychiatry, joined in an amicus curiae brief urging the courts to consider the impact on tens of millions of patients who would coverage and other patient protections if the judge’s decision was not reversed. ACP joined again with other organizations in the filing of another brief for the appeal in April 2019.

On June 17, 2021, the U.S. Supreme Court voted 7 to 2 to uphold the ACA in California vs. Texas (also known as Texas v. U.S. in the lower courts) by rejecting a lawsuit filed by a group of Republican states and two individuals claiming that the change made by Congress in 2017 to the individual mandate had rendered the entire law unconstitutional. The Supreme Court ruled that the plaintiffs do not have standing to challenge the law. ACP signed on to an amicus brief to the Supreme Court with other medical organizations that detailed the immense harm that a decision to do away with the law would have had.

Expansion of Health Coverage Access – President Biden has prioritized expanding enrollment and lowering premium costs in the ACA exchanges. On September 17, 2021, CMS issued a final rule that extended the open enrollment period for 30 days, which now last from November 1, 2021 to January 15, 2022 and expanded the Federally-facilitated Marketplace (FFM) Navigators program to reduce health disparities by helping consumers understand their benefits and rights, review options, and enroll in Marketplace coverage. It also re-launched the “Champions for Coverage” program.

According to CMS data, over 1.5 million Americans have signed up for new health insurance coverage through HealthCare.gov during the 2021 Marketplace Special Enrollment Period between February 15 and June 30, 2021. In addition, 2.5 million who already had coverage took advantage of expanded assistance created by the 2021 American Rescue Plan which expanded the number of people eligible for subsidies for ACA marketplace coverage and bolstered the tax credits for those already purchasing coverage to make the plans more affordable. Average premiums for returning customers in the 36 states using the federal marketplace dropped 40 percent from $104 a month to $62 a month on average, according to CMS data.

Medicaid Waivers – In 2018, during the Trump presidency, the Centers for Medicare and Medicaid Services (CMS) issued new guidance regarding Medicaid waivers that allows states to restrict Medicaid eligibility and enrollment by imposing work requirements; premiums cost sharing for vulnerable individuals, benefit cuts, and other conditions for them to receive benefits.

In his first week in office, President Biden signed an executive order requesting a review of these rules and other Medicaid restrictions. The Biden Administration has also notified states with approved work requirements that they plan to withdraw approvals.

On April 16, 2019, ACP published a position paper in the Annals of Internal Medicine titled “Improving the Affordable Care Act’s Insurance Coverage Provisions.” This paper explores common-sense approaches to improve the ACA even as internists continue to advocate for universal health care for all patients. While the ACA has made health care more accessible and affordable for millions of Americans, especially patients with pre-existing conditions, many still remain uninsured or face significant gaps in coverage.

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 expanding eligibility for premium tax credits beyond 400 percent of the federal poverty line (FPL).

Resources

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