The Affordable Care Act has made life simpler for millions of Americans looking for health coverage, giving them access to medical services they could not otherwise afford, as well as keeping preexisting condition coverage accessible.
The Affordable Care Act has been law for more than 11 years, and is unlikely to change anytime soon. How the Supreme Court rules on a suit filed by conservative attorneys general will ultimately be decisive.
The Individual Mandate
The individual mandate requires individuals to obtain health insurance or face a penalty of $95 each year from 2014-2018; it has since increased up to $695 or 2.5 percent of their income, whichever was greater.
As the main vehicle for expanding coverage under law, the mandate had two main objectives: encouraging healthy individuals to purchase private insurance policies and decreasing the number of uninsured Americans.
Studies on the Affordable Care Act’s (ACA) mandate were performed to measure its effect on insurance enrollment and uninsurance rate, using variation in size of mandate penalty depending on income and geography as a strategy for estimating its effects on uninsured people. These studies exploited variance in size penalty as an effective means of estimating its influence on uninsured people.
The Exchanges
The Affordable Care Act represents a conservative vision. It relies heavily on tax credits, partially relies on commercial health plans, allows people to shop online for health plans they choose and urges individuals to take personal responsibility for their own healthcare.
Health economists endorse plans with higher deductibles as they enable consumers to become better shoppers and cut costs.
Exchanges are designed to lower insurance costs by increasing competition, choice and participation. Their operation, however, can be complex as they must work within other critical state policies and programs such as state insurance regulation and Medicaid operations.
The Affordable Care Act offers states a number of options when it comes to creating state-based exchanges or entering formal partnerships with federally facilitated exchanges, including creating state-based exchanges or entering formal partnerships with these exchanges. Partnerships often offer greater market power, economies of scale and protection against adverse selection than doing it independently – although the advantages and disadvantages must always be carefully considered before choosing between one or another approach.
The Medicaid Expansion
The Affordable Care Act expanded Medicaid eligibility to a larger pool of low-income adults and families, particularly those earning up to 133% of the federal poverty level (FPL; currently $27,000 for a family of three).
For the initial three years of expanding coverage, the federal government was responsible for paying all costs; after this point it gradually decreased to 90% of costs borne by them.
While initially widely debated, the Affordable Care Act has saved lives for millions and helped reduce health care costs significantly.
As per state exchange laws, insurance companies are required to use at least 80% of premium dollars on care instead of advertising, overhead costs and bonuses for executives – this helps lower costs by encouraging them to compete for your business by providing value for your premium dollar. In addition, tax credits are available for individuals and families purchasing coverage via state exchanges.
The Taxes
Taxes are fees collected from individuals or businesses to cover goods and services provided by government, as well as fund programs that benefit all people equally.
There are various taxes, such as payroll, capital gains and estate taxes. The government uses this revenue to fund essential services like police, fire protection, highway infrastructure development and justice delivery systems.
The Affordable Care Act required Americans to have health insurance or pay a penalty; tax credits made insurance more accessible for low-income families; and expanded Medicaid to cover poor Americans.
But conservatives have challenged the Affordable Care Act and are asking the Supreme Court to rule whether or not it is constitutional. This case serves as a litmus test of whether tax and spend powers exist under our Constitution.
