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The Affordable Care Act: Successes and Remaining Challenges

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The Affordable Care Act: Successes and Remaining Challenges

In March, 2010, President Obama signed the ACA into law that made hundreds of significant changes to the U.S. healthcare system between 2011 and 2014. Provisions included in the ACA are intended to expand access to healthcare coverage, increase consumer protections, emphasizes prevention and wellness, and promote evidence- based treatment and administrative efficiency in an attempt to curb rising healthcare costs.

  • Beginning in January 2014, almost all Americans are required to have some form of health insurance from either their employer, an individual plan, or through a public program such as Medicaid or Medicare. Since the so-called “individual mandate” took effect, the total number of nonelderly uninsured adults dropped from 41 million in 2013 to 32.3 million in 2014. The largest coverage gains were concentrated among low-income people, people of color, and young adults, all of whom had high uninsured rates prior to 2014.
  • A major provision of the ACA was the creation of health insurance marketplace exchanges where individuals not already covered by an employer-provided plan or a program such as Medicaid or Medicare can shop for health insurance. Individuals with incomes between 100 percent and 400 percent of the federal poverty line would be eligible for advanceable premium tax credits to subsidize the cost of insurance. States have the option to create and administer their own exchanges or allow the federal government to do so. Currently, only 14 states operate their own exchanges.
  • Designed to promote competition among providers and deliver choice transparency to consumers, the state-based exchanges appear to be doing just that. A recent analysis by the Commonwealth Fund found that the number of insurers offering health insurance coverage through the marketplaces increased from 2014 to 2015. Additionally, there was generally no reported increase in average premiums for marketplace plans over that period. The analysis found only a modest increase in average premiums for the lowest cost plans from 2015 to 2016.
  • The ACA also included a major expansion of the Medicaid program, although the Supreme Court ruled in 2012 that this expansion is a state option. As of November 2015, 30 states have chosen to expand Medicaid. As of 2014, adults with incomes at or below 138 percent of the federal poverty line are now eligible for Medicaid in the states that have adopted the expansion.
  • Despite improvements to the U.S healthcare system under the ACA, a number of challenges remain. In 2014, 10.4 percent of Americans were still uninsured, and those with insurance still face high deductibles and premium costs. Furthermore, in the 20 states that had not expanded Medicaid, an estimated three million poor adults fall into the “coverage gap” where their incomes are above current Medicaid eligibility limits but below the lower limit of premium credits on the healthcare exchanges. The bulk of people in the coverage gap are concentrated in the South, with Texas (766,000 people), Florida (567,000), Georgia (305,000) and North Carolina (244,000) having among the highest number of uninsured.
  • The ACA included a number of other provisions to improve healthcare access and affordability. The law banned lifetime monetary caps on insurance coverage for all new plans and prohibited plans from excluding children and most adults with preexisting conditions. Insurance plans are also prohibited from cancelling coverage except in the case of fraud, and are required to rebate customers if they spend less than 85 percent (80 percent for individual and small group plans) of premiums on medical services. Additionally, the ACA established the Prevention and Public Health Fund to allocate $7 billion towards preventative care such as disease screenings, immunizations, and pre-natal care for pregnant women and between 2010 and 2015. Furthermore, $11 billion in funding for community health centers and $1.5 billion in additional funding for the National Health Service Corps was included in the law.
  • A number of cost control provisions were included in the ACA in an attempt to curb rising medical costs. Among them is the Independent Payment Advisory Board, which will provide recommendations to Congress and the President for controlling Medicare costs if the costs exceed a target growth rate. The administrative process for billing, transferring funds, and determining eligibility is being simplified by allowing doctors to bundle billing for an episode of care rather than the current ad hoc method. Additionally, changes were made to the Medicare Advantage program that would provide bonuses to high rated plans, incentivizing these privately-operated plans to improve quality and efficiency. Furthermore, hospitals with high readmission rates will see a reduction in Medicare payments while a new Innovation Center within the Centers for Medicare and Medicaid Services was created to test new program expenditure reduction methods.

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