While the ACA has improved health coverage for many Americans, not everyone is satisfied with it. Regardless, a number of opponents of the ACA have tried to undermine it in various ways.
The ACA has reduced healthcare spending by $2.3 trillion and saved more than 1 million people money. It has also helped millions of low-income Americans get health insurance and expanded coverage on Medicaid.
1. Health coverage for more people
If the ACA were repealed, millions of Americans would lose access to health insurance. The law has helped low-income people get insurance through Medicaid expansion, provided premium tax credits to help moderate-income people afford individual market coverage, and offered protections for people with preexisting conditions.
In addition, ACA provisions protect consumers from abusive insurance company practices that drive up costs. These include allowing people to stay on their parents’ insurance until age 26, protecting patients’ choices of doctors, and eliminating lifetime limits on coverage.
Those who have gained coverage under the ACA have benefitted from a number of policies that have saved lives and reduced medical costs. These include expanding Medicaid, which has improved the financial wellbeing of those in need and increased health outcomes.
2. Reduced healthcare spending
The ACA has helped make health insurance affordable by providing direct subsidies to low- and middle-income people for private coverage that they buy on the marketplaces, and by expanding no or low-cost public health insurance through Medicaid.
The law has also made people more accountable for the way they spend their premium dollars, and required insurers to spend at least 80 percent of them on medical care and quality improvements rather than advertising, overhead, and bonuses. These policies help bring down healthcare costs in America and have made it more likely that those who need care will get it.
The ACA has also helped save lives by making sure everyone can access affordable health insurance, regardless of their preexisting conditions. If the ACA were repealed, millions would lose access to the marketplace and Medicaid, which would lead to higher rates of uninsuredness. This would be especially devastating during a pandemic like COVID-19. Without protections for people with preexisting conditions, insurers could raise prices and deny or ration coverage.
3. Taxes for the rich
The Affordable Care Act was financed through higher taxes on the wealthy, including a 3.8 percent tax on investment income and a 0.9 percent payroll tax. The House bill would repeal those two taxes, costing taxpayers $31 billion a year and giving 85 percent of the tax cut to the wealthiest.
That’s because these taxes disproportionately impact the richest Americans.
ACA taxes are targeted at those earning more than $200,000 (for singles) or $250,000 for couples filing jointly.
For that person, those taxes are $9,500 or $13,200 depending on their filing status.
The ACA also created an additional Medicare tax of 0.9%, levied on wages over a certain threshold. That is the same tax as the 3.8 percent investment income tax, which only applies to those who earn more than $200,000 (or $250,000 for married people).
4. Increased savings
Among the most important savings would come from repealing the ACA’s tax increases and Medicare cuts. Repealing these taxes alone would save $800 billion and reduce the deficit by several trillion dollars in the next decade, according to a 2015 CBO analysis.
However, many of the offsets in the ACA’s coverage provisions would be lost if repealed. These include Medicaid expansion subsidies and exchange premium assistance, as well as tax credits for people who can’t afford their own insurance.
Other savings would come from allowing Medicare to negotiate drug prices. This is a big win for Medicare beneficiaries and the federal government, who will see reduced costs and higher revenues from reduced premiums.
