In 2010, the 111th Congress passed the Patient Protection and Affordable Care Act, which President Obama then signed into law on March 23, 2010.
The Affordable Care Act (ACA) made several key advancements that have made health insurance more accessible for Americans, such as:
1. The Individual Mandate
Individual mandate: From 2010 until 2016, individuals were required to purchase health insurance or pay a tax penalty of either $95 per uninsured person or 2.5% of their income, whichever was higher.
The law also provided subsidies to lower-income individuals who purchased plans through the exchanges. These incentives are designed to make coverage more accessible by decreasing out-of-pocket premiums individuals must pay.
Studies have examined how the mandate has affected insurance enrollment. These can be divided into two categories: those which examine whether people purchased coverage due to the mandate, and those which explore whether and how much of a penalty they faced when trying to enroll in coverage.
2. The Employer Mandate
The Affordable Care Act (ACA) contains a provision that penalties certain large employers for failing to offer health insurance coverage. This requirement, known as the employer mandate, applies only to Applicable Large Employers or ALEs–defined as companies with 50 or more full-time employees or their equivalent in part-time hours.
The employer mandate penalty is twofold: It requires ALEs to provide minimum essential coverage to 95% of their full-time employees or pay a fine. Furthermore, it demands that this coverage is affordable and provides at least minimum value.
The Affordable Care Act’s employer mandate penalties can be devastating for small and medium-sized businesses. Coverage costs for smaller firms tend to be approximately one-third higher per worker than for larger ones.
3. The Medicaid Expansion
The Affordable Care Act’s Medicaid expansion was intended to address systemic health inequalities for low-income individuals. Studies suggest that expanding Medicaid can help reduce disparities in access to care and health outcomes, although some factors may make it less effective than anticipated.
Medicaid is an essential program that offers healthcare to millions of Americans, yet it has its limitations – such as a high percentage of inaccurate payments. This has caused many providers to stop accepting new patients insured under Medicaid, leading to poorer patient outcomes.
Under the Affordable Care Act (ACA), states are free to decide whether or not they will expand Medicaid coverage to all eligible adults with family incomes up to 138% of the federal poverty level (FPL), with 100 percent federal government matching for three years and tapering off at 90 percent thereafter. Making this decision will be a challenge as there are various factors that differ by state.
4. The Exchanges
Under Obamacare, exchanges provide consumers with a platform to purchase affordable health plans. States may opt to run their own exchanges or rely on the U.S. Department of Health and Human Services (HHS) to manage them.
State-based exchanges provide individual and small group residents with competitive choices from a range of private insurers offering plans that meet ACA criteria. Furthermore, they provide access to tax credits and Medicaid eligibility.
Timothy Stoltzfus Jost believes that key decisions for an exchange’s success include its governance and organizational structure, how it is funded, and how it complies with federal standards. These are among the biggest challenges states will have to address as they plan and launch an exchange, according to him.
5. The Taxes
In 2010, President Barack Obama signed into law health care reform that mandated everyone have health insurance or pay a tax penalty. While the law has since expanded coverage and reduced healthcare costs for many Americans, taxes under Obamacare have had an immense impact on millions of families’ financial situations.
The Affordable Care Act (ACA) implemented a tax on high earners who don’t have health insurance (the Medicare surtax). Furthermore, it imposed an excise tax of 40% on employer-sponsored health benefits that exceeded certain thresholds.
Additionally, the ACA implemented billions of dollars worth of new taxes on pharmaceutical and medical device companies, and provided subsidies for health insurance to low- and middle-income Americans through premium tax credits.
