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Effects of the Affordable Care Act and the Importance of Stability

Published on October 12, 2020

The Patient Protection and Affordable Care Act (ACA), the comprehensive health care law passed by Congress and signed into law by President Barack Obama in 2010, transformed the way the U.S. health care system provides health insurance coverage and controls health care costs, and modified how health care is delivered.

Prior to the ACA, many Americans faced higher health care costs and less access to care, resulting in nearly 44 million Americans lacking health care coverage. Further, in the individual market, more than 60 percent of patients did not have access to maternity coverage, 30 percent did not have coverage for substance use treatment, nearly 20 percent did not have coverage for mental health care services, and almost 10 percent did not have coverage for prescription medications.

After the ACA was signed into law and key provisions were implemented, nearly 20 million Americans gained health insurance coverage through the law’s expansion of public and private insurance. Groups that typically had high uninsured rates rapidly gained coverage, including young adults, people of color, and low-income people. One of the most important coverage provisions of the ACA is the guarantee that health insurers cannot deny coverage or charge higher premium rates based on an individual’s pre-existing conditions. Nearly 54 million Americans, or 27 percent of adults under 65, have a pre-existing condition that would have made them uninsurable prior to the enactment of the ACA. Further, nearly 2.3 million young adults gained coverage through the ACA’s requirement that they remain on their parent’s insurance plan until age 26.

Additionally, the ACA made a number of significant changes to Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) that have had longstanding positive effects. The law expanded Medicaid coverage for adults with incomes up to 138 percent of the federal poverty level (FPL), and expanded Medicaid eligibility for all children up to age 19 to 138 percent FPL and established tax credits and options for coverage under the new health insurance marketplaces.The law also began shifting the Medicare program from a fee-for-service based payment model to focus on increasing provider accountability over the quality and cost of health care services. These policy changes in the ACA resulted in expanded access to affordable care, utilization of services, and financial security for low-income and other vulnerable populations.

By transforming the ways in which Americans receive health insurance, the ACA reduced exposure to high medical expenses and increased access to coverage, improving both short and long-term health outcomes and financial security for Americans, and thereby reducing socioeconomic disparities in the United States.

While the United States continues to grapple with the COVID-19 pandemic, and nearly 31 million Americans experience job loss, the ACA can provide a safety net for individuals losing their employer sponsored health insurance (ESI). Americans are able to enroll in health insurance coverage through the ACA marketplace exchanges and qualify for financial assistance with premiums and cost-sharing responsibilities. They are also able to enroll through the ACA’s expansion of Medicaid eligibility in states that have expanded the program. As of June 2020, roughly 487,000 people signed up for an ACA insurance plan after losing their ESI since the last open enrollment period that ended in December 2019, which is a 46 percent increase in sign-ups compared to the same period last year.

Further, all forms of public and private insurance, including self-funded plans, must now cover FDA-approved COVID-19 tests and costs associated with diagnostic testing with no cost-sharing, as long as the test is deemed medically appropriate by an attending health care provider as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. When a vaccine for COVID-19 is eventually approved, it will most likely be covered for nearly all insured people without cost-sharing, under the ACA requirement that federally- recommended preventative care be covered without cost-sharing for anyone enrolled in private insurance, Medicare, or in the Medicaid expansion.

Meanwhile, support of the ACA is at an all-time high, with 55 percent of Americans in favor of the law as of February 2020. As the nation faces the 2020 election, concerns over health care quality and cost continues to be a top concern among voters as it was in the 2018 midterm elections, which played a significant role in House Democrats winning the majority. At least six in ten voters now say that health care and the economy are very important to their 2020 vote choice, ahead of foreign policy or national security, taxes, immigration, climate change, and international trade and tariffs.

In several swing states, including Michigan, Pennsylvania, and Wisconsin, voters are more likely to support the stability of the ACA over proposals like Medicare for All and repealing and replacing the ACA. Notably, most Democrats and Democratic-leaning independents also prefer to expand the ACA rather than replace the law with a Medicare for All plan. While most Republican voters still hold unfavorable views on the ACA, only three percent say they are in favor of repealing the law – a considerable decrease from the 2016 election in which 18 percent of Republican voters at the time mentioned opposition to the ACA or repealing the ACA as their top concern.

While the country continues to experience economic setbacks due to the COVID-19 pandemic, newly unemployed Americans are turning to the Medicaid program for health insurance. A majority of adults now say that the Medicaid program is personally important to them and their families, and about one in four adults who are not currently on Medicaid say that it is likely they or a family member will turn to Medicaid for health insurance in the next year.

This is the first time that the country is experiencing an economic recession since the ACA was implemented, while also dealing with the uncertainty of a global pandemic and an upcoming national election. The ACA has significantly improved health coverage and outcomes for millions of Americans and it is crucial to continue to build on the gains the law made in affordable coverage for low and middle-income consumers.

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