The Affordable Care Act and Health Insurance Markets


In 2012, the Affordable Care Act revolutionized the health insurance marketplace in several ways. This bill aimed to curb rising healthcare costs, increase quality, and flip over 30 million Americans from uninsured to insured. Eight years later, the market is still feeling its vast and wide impact.

The Patient Protection and Affordable Care Act was signed into law on March 23, 2010. The legislation aimed to provide basic healthcare security to everyone.

What does the Affordable Care Act cover?

The ACA includes the following:

  • Most people will have to buy health insurance or pay a penalty (individual mandate).
  • Each state has access to a Marketplace or Exchange, where you can purchase health insurance after comparing benefits and premiums.
  • You may be eligible for financial aid to buy insurance (premium assistance or tax credits) and cost-sharing subsidies. This depends on your annual earnings, residence, and family members.
  • Your children can stay on your health plan until they are 26.
  • You must be accepted by any health plan you wish to opt for if you have a health problem. The ACA prohibits the denial of coverage due to a preexisting condition or being charged more for insurance based on your medical history and condition.
  • Your health plan must provide coverage for a list of essential health benefits (doctor appointments, emergency services, hospital stay, maternity care, prescriptions, and more) even if you have a chronic condition or a serious accident.

Pros and Cons of the Affordable Care Act

The Affordable Care Act established health insurance markets where people could sign up for coverage and qualify for federal subsidies. Despite the initial surge in prices in the marketplace, many insurance providers, such as the US Health Group, have made their premiums more affordable so more people can avail them.

More than 20 million American citizens acquired health insurance under the ACA. Thirty-seven states expanded Medicaid, extending their pool of eligible residents to those who live at or below 138% of the federal poverty level. Owing to increased access to health care, it is estimated that the ACA saved more than 19,000 lives.

The federal government reimburses more than 90% of the expenses states pick up under their Medicaid expansion. This has led even red states that criticized the ACA to adopt it as well.

There are certain parts of the ACA with bipartite support, such as barring insurers from denying coverage or charging more from people with preexisting conditions.

The ACA barred health insurers from including lifetime and annual caps in their plans.

The ACA also prohibited insurers from charging rates based on gender. As per the results of a study, women were charged almost 45% more for their health insurance than men.

Medicaid stopped reimbursing hospitals for treating hospital-acquired infections under the ACA. Earlier, if you contracted an infection from the hospital, the hospital earned more money.

There has been a 6% increase in the number of early-stage cancer diagnoses in states where Medicaid was expanded. Early cancer diagnosis increases the probability of successful cancer treatment and thus fewer cancer-related deaths, lower cost of treatment, and better outcomes for patients.

Summary of the pros of the ACA:

The benefits associated with ACA involve:

  • More citizens have access to health insurance. More than 16 million Americans got health insurance coverage in the first five years of the ACA.
  • Health insurance is more affordable for the masses. The ACA prevents unreasonably high rates and increases coverage options for consumers.
  • People with preexisting health conditions are no longer denied coverage. Earlier, it was challenging for people with chronic conditions to get treatment coverage.
  • There is no time limit for coverage. Insurance companies can no longer have a preset limit on the coverage they provide
  • The ACA covers more screenings. Screenings have low deductibles and co-pays. The goal is to practice prevention to avoid major issues in the future.
  • Prescription drugs cost lesser.

The ACA is not devoid of faults, however.

The ACA has failed to reduce overall spending as healthcare makes up for approximately a fifth of America’s GDP.

While the Affordable Care Act succeeded in enabling almost the entire population to have access to health insurance, it did not do much to reduce the underlying cost of medical care. Most Americans are unable to afford healthcare.

Healthcare continues to be a leading cause of bankruptcy, as more than 40% of Americans are struggling with debt or medical bills.

The Trump administration has also reduced the ACA’s budget, which has made it harder for people to learn about their health insurance options.

Approximately 2.5 million people who would have been eligible remain uninsured because more than a dozen states refuse to adopt the ACA’s Medicaid expansion.

In some states, it has become much harder to qualify for Medicaid. Almost ten states are in the process of imposing work requirements for Medicaid benefits. This move could lead to almost 800,000 citizens losing their health insurance coverage.

The cons of the ACA:

A few of the limitation of ACA can be put up as:

  • People have to pay more in premiums. Insurance companies now offer a more extensive range of benefits, which has led to increased premiums.
  • You can be fined for not being insured. If you are uninsured and do not acquire an exemption, you are required to pay a fine.
  • Taxes are increasing due to the ACA. Several new taxes were passed to pay for the ACA, such as pharmaceutical sales and medical device taxes.
  • Companies are reducing employee work hours to avoid coverage.
  • Enrollment is difficult as the website has technical difficulties.

Parting Thoughts

The ACA is subject to changes every year; therefore, the legislation can be amended, and budget modifications can impact its implementation as well. Regardless of the pros and cons of the ACA, there is no denying that it has played a monumental role in terms of public support for healthcare.

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