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Affordable Care Act (ACA) - State Health Policy

Summary

Nine 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. 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).  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-seven 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 and 2019, the administration and GOP-led Congress, along with the courts, have continued their assault on the Affordable Care Act in attempts to repeal the law or otherwise weaken it through executive action. Those efforts have largely failed with the exception of the following:

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 remains 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 warns of chaos in the health care system if the ruling is upheld. If the decision is upheld, all of the ACA would be terminated without a replacement; no federal dollars for Medicaid expansion, no premium subsidies, no coverage of preventive services at no cost to seniors, no essential benefit requirements, annual and lifetime limits on coverage would return, and insurers could again turn down people with pre-existing conditions. 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 which urged the courts to consider the impact on tens of millions of patients who will lose coverage or other patient protections if the judge’s decision is not reversed on appeal, both prior to the judge’s ruling and now on appeal. ACP joined again with other organizations in the filing of another brief for the appeal in April 2019.

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 and to the present, 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.

Expanded the Use of Loosely-Regulated Plans – In 2018, the Department of Health and Human Services finalized regulations allowing for the expansion of short-term, limited-duration health plans (STLD) and association health plans (AHPs), which are not required to comply with certain ACA consumer protections. STLD plans and AHPs expose individuals who buy them to undue financial risk with no assurance of adequate health coverage if they get sick. The CMS Office of the Actuary estimates that broadening access to extended STLD plans will cause marketplace premiums to increase and federal spending to rise by over $38 billion over the next 10 years.  The administration has taken actions that non-partisan researchers have stated destabilize the market by increasing premiums, undermining patient protections, and result in “adverse selection” in the individual market.

For more information, view the 2018 report below on Individual Insurance Market Performance in Mid-2018. 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.

Approved New Medicaid Eligibility and Enrollment Restrictions – In 2018, 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.

All of these efforts have already, or will cause, significant disruption in the insurance market and potentially in peoples’ 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 expanding eligibility for premium tax credits beyond 400 percent of the federal poverty line (FPL), among other things.

Resources

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