Finding affordable healthcare options is a great concern to many Americans. To that end, the Affordable Care Act (ACA) changed the lives of many previously uninsured Americans who can now find affordable healthcare, either as a result of the programs being offered through the government-run Marketplace or through private insurance plans that have had to change policies in response to the law. The ACA law provides income-based premium subsidies to those who purchase their own insurance through the Marketplace.
When President Obama started talking about reforming health care, there was no shortage of criticism, but the plan had fans, as well. During President Trump's administration, several attempts were made to make changes to the ACA. Some attempts fell flat, while others succeeded in making lasting changes to the law. Here's where the ACA stands today.
- One of the primary goals of President Obama's health care reform was to get more Americans insured.
- Benefits of the ACA include: covering essential benefits, providing coverage to those with pre-existing conditions, and allowing children to stay on their parents' health care plans longer.
- Pitfalls of the ACA include: increased taxes, not all states expanded Medicaid, and some employees lost coverage when the ACA took effect.
A Decline in Uninsured Rates
One of the primary goals of President Obama's health care reform was to get more Americans insured. It helps to look back and see what the concerns and data were to help understand where healthcare may be going.
Although we have not yet reached a point where every single American is insured, the improvements in access to care were tremendous. Health care reforms provided insurance for the first time to those who were previously discriminated against in the health care industry for pre-existing conditions. As a result, the most vulnerable members of society had newfound access to the health care system.
In 2010, the year the ACA was signed into law, roughly 46.5 million Americans were uninsured. By 2016, that figure had dropped to a historic low of about 26.7 million. After hitting that low, the uninsured rate has slowly crept up, but it remains far below the pre-ACA levels. In 2019, some 28.9 million Americans didn't have health insurance.
How Do Healthcare Plans Look in 2021?
Here are some quick facts about Obama's Affordable Care Act:
- The Children’s Health Insurance Program (CHIP) had expanded to cover roughly 9.68 million children by the fiscal year 2019.
- Insurance companies can't deny coverage due to any pre-existing conditions, as guaranteed by the ACA.
- In 2020, more than 11.4 million Americans acquired health care through the ACA Marketplace. This is actually a decrease in Marketplace enrollment. In 2017, more than 12 million Americans acquired health care coverage through the ACA Marketplace in 2017.
Pros and Cons of the ACA
Covers essential benefits
Provides coverage to those with pre-existing conditions
Allows children to stay on their parents' healthcare longer
Not all states expanded Medicaid
Some employees lost coverage when the ACA took effect
- Covers essential benefits: A major benefit of the ACA was that it provided a floor for what health care plans had to cover. These 10 "essential" health benefits are designed to reduce overall health care costs by treating patients before conditions become expensive to treat. For example, all ACA-compliant plans must cover preventative and wellness visits without charging a co-pay.
- Provides coverage to those with pre-existing conditions: One of the most popular parts of ACA allowed a whole new population to acquire healthcare—those with pre-existing conditions. Obama administration research at the time of the ACA's passage estimated that as many as 50% of non-elderly Americans had some kind of pre-existing condition that could have potentially barred them from coverage. Under the ACA, they cannot be denied insurance based solely on those pre-existing conditions.
- Allows children to stay on a parent's healthcare longer: The ACA expanded the age limit for children on a parent's health insurance plan to 26. Americans between the ages of 19 and 34 are the least likely to have insurance. This provision of the ACA immediately reduced the number of young, uninsured adults by allowing them to continue to use a parent's plan.
- Raised taxes: While the individual mandate has since been removed, other tax hikes included in the ACA remain. In 2020, a study estimated that fully repealing the entire ACA would cut taxes for the top 0.1% of earners by an average of $198,000 per year. However, the ACA's tax burden is significantly tilted toward top earners. The tax benefits of a full repeal for those who aren't in the top fifth of America's richest families would be less than $100 per year.
- Not all states expanded Medicaid: The ACA left the decision of whether or not to expand Medicaid to states, so not all Americans are fully enjoying all the benefits of the ACA. As of February 2021, 12 states had not adopted the expansion.
- Millions of employees lost coverage when the ACA took effect: The implementation of ACA had a negative impact on employees who lost coverage as a result of the shifting laws and insurance plans. The Congressional Budget Office estimated that between 3 million and 5 million employees lost their work-sponsored insurance plans as a result of the ACA. However, the total number of uninsured Americans fell after the ACA took effect. While millions may have been inconvenienced by losing their work-sponsored plans, they were able to acquire another insurance plan through the ACA.
Changes by the Trump Administration
President Trump used his time in office to repeatedly try to roll back aspects of the ACA, but his success was limited. Perhaps his biggest success was in striking down the individual mandate. While there was once a tax penalty for those who chose not to acquire ACA-compliant health care coverage, that penalty was repealed by 2017's Tax Cuts and Jobs Act. As a result, Americans can now choose not to have health insurance without facing a penalty.
The Trump administration also drastically cut spending on Marketplace advertisement and outreach. While that doesn't in and of itself impact ACA law, it could have contributed to the steady uptick in uninsured Americans during Trump's time in office.
Aside from ACA policies, another major healthcare change that took place under the Trump administration concerned high deductible health plans (HDHPs). HDHPs had been increasing in popularity for more than a decade when Trump took office. Having an HDHP allows people to invest in Health Savings Accounts, which yield potential long term benefits for people. The Trump Administration explored ways of expanding the benefits of HSAs, including adding more preventative care coverage for chronic conditions in HDHPs and proposing a relaxation of the rules for penalty-free withdrawals from HSAs.
There are always improvements that can be made to current legislation and healthcare. The best way to protect yourself and ensure you get the maximum benefits for the money you pay into a health plan is to make sure you are maximizing on plans like HSA's, and being well informed about the coverage's you are entitled to as things change.