The Affordable Care Act has helped millions of Americans access affordable health coverage through marketplaces and Medicaid, as well as speedier FDA approval of biosimilar drugs, which offer cheaper versions of brand drugs.
This law prohibits insurers from setting arbitrary annual and lifetime coverage limits, and requires them to reimburse customers when they overcharged them.
1. Removing the Subsidy Cliff
The Affordable Care Act’s (ACA) premium tax credits assist people purchasing health insurance on the individual market. Unfortunately, their use can be affected by sudden spikes in healthcare costs that make coverage unaffordable to some individuals and families. To address this problem, policymakers must lift eligibility cliff at 400% of FPL to allow more people to benefit from these credits.
Formerly, households earning just over 400% of poverty level were subject to repaying all of their Affordable Care Act premium tax credits at once on their individual tax returns – this “subsidy cliff” particularly harming older Americans in rural areas with expensive marketplace plans.
The American Rescue Plan (ARP) temporarily fixed the subsidy cliff for those purchasing insurance on an exchange until 2022, at least temporarily. Policymakers should make this permanent as it would enable more Americans to qualify for essential Affordable Care Act premium subsidies that help keep premiums affordable – something which is especially crucial given that premiums are projected to increase significantly this year.
2. Making it easier for employers to contribute to their employees’ out-of-pocket health care costs
The Affordable Care Act makes health insurance more accessible and cost-effective for low- and moderate-income families by eliminating preexisting condition exclusions, providing premium tax credits to reduce coverage costs, eliminating annual and lifetime benefit limits, and mandating that coverage provide real financial security. Finally, actuarial value requirements ensure coverage provides real protection.
Healthcare costs are an integral component of American economic activity; however, their affordability can also act as a major barrier. According to the 2022 McKinsey US Consumer Pulse Survey, two-thirds of consumers reported that high healthcare costs had an adverse effect on purchases across other categories.
Families under 200 percent of the poverty line spend 62 percent of their discretionary income on healthcare expenses such as premium contributions and out-of-pocket costs, such as premium contributions and out-of-pocket costs. An increase of 9-10 percent would increase that expenditure to 68 percent of discretionary income. Current regulations prevent employers from helping employees cover out-of-pocket costs by “screwing them out” of premium tax credits if cost sharing surpasses 400 percent of poverty level.
3. Making it easier for people to get health insurance
The Affordable Care Act prohibits insurers from denying coverage or charging more to people with preexisting conditions or higher premiums, requires minimum health benefits including prescription drug and hospitalization coverage for individuals, and creates health insurance marketplaces where people can shop for coverage while receiving financial support such as monthly premium tax credits or cost-sharing reductions. It also bans lifetime and annual expense caps on coverage or preventive services.
The Affordable Care Act has made obtaining health insurance easier for many, particularly younger adults in the individual market, where rates have seen dramatic drops since its implementation. Unfortunately, an estimated 19 million uninsured persons still do not qualify for subsidies and remain ‘left behind’ by this new legislation.
To lower the uninsured rate, the ACP recommends actions to: reduce unaffordable premiums for people not eligible for premium tax credits; improve and stabilize health insurance marketplaces; enhance outreach education and enrollment assistance services. In addition, expanding access to private health insurance options while funding community clinics that can offer services regardless of a person’s insurance status are among its recommendations.
4. Making it easier for people to get health care
The Affordable Care Act (ACA) increased health insurance affordability by expanding premium tax credits and out-of-pocket costs limits, permitting young adults to remain on their parents’ plans, and eliminating annual or lifetime coverage caps for individuals. Furthermore, ACA made accessing health care easier by permitting people to choose their own doctor; prohibiting insurers from requiring prior authorization before women visit an obstetrician/gynecologist; ensuring access to emergency services and more.
COVID-19 has illustrated that America’s complex health care system still leaves many without access to affordable coverage, making universal coverage more elusive than ever. More work remains to achieve universal coverage by expanding market-based options and strengthening consumer protections; such as expanding Medicaid and guaranteeing that insurance companies don’t rip people off; in addition, keeping various reforms such as guaranteed issue preventing insurers from turning away those with preexisting conditions is also crucial.
