The Affordable Care Act (ACA) has revolutionized how Americans access and utilize health care. It ensures insurers do not deny coverage to people with preexisting conditions and limit their ability to charge higher premiums; furthermore it allows young adults to remain on their parents’ plans while helping small businesses provide health coverage to employees.
The Uninsured
The Affordable Care Act made it illegal for insurance companies to deny coverage or increase premiums based on preexisting conditions or charge more as a result of them, as well as prohibit lifetime and annual caps on benefits which restricted people with chronic or severe illness from accessing affordable care.
Without the Affordable Care Act (ACA), more Americans would go without health coverage or struggle to afford it. Under its mandates, insurance companies must use at least 80 percent of your premium dollar on actual medical costs and quality enhancement rather than administrative overhead costs or bonuses for executives.
The Affordable Care Act has drastically decreased uninsured rates and significantly reduced racial disparities in coverage, particularly in states that expanded Medicaid. Unfortunately, however, some low-income Americans remain uninsured as a result of either their state not adopting expansion or they not qualifying due to immigration status or income limitations; providing affordable health coverage could significantly decrease medical debt as well as help avoid foreclosure and bankruptcy due to unpaid bills.
The Poor
Before the Affordable Care Act was in place, insurance companies could deny coverage to people suffering from chronic illnesses like diabetes or congestive heart failure, charge them higher premiums due to preexisting conditions, or cancel their policies due to accidental paperwork errors.
Through the ACA, those living with illnesses or disabilities now have access to affordable coverage and can live their lives without worrying about paying for care. They can pursue their dreams without risking losing their healthcare coverage.
Affordable health coverage for the poorest Americans reduces uncompensated medical treatment costs for this group – saving taxpayers, private insurers and individuals billions each year. Unfortunately, recent repeal efforts and poor stewardship threaten to undo these gains (1)
The Middle Class
Even with its flaws, the Affordable Care Act has succeeded in reducing inequality in health insurance costs and access to care; however, its reach is limited due to market failures and other barriers to health reform.
Healthcare costs have become a burdensome expense for many middle class Americans. Those whose earnings don’t qualify them for premium tax credits struggle to find affordable Affordable Care Act Exchange plans as they pay their own deductibles and copayments out of their own pockets.
Temporary tax subsidies provided under the Affordable Care Act have helped alleviate some of these financial strains for middle-class families, but without them families earning up to four times the federal poverty line may face substantial out-of-pocket expenses.
Expanding access to lower-cost alternatives like health care cost sharing plans could offer consumers a viable solution. These plans offer an appealing alternative to conventional insurance, providing coverage at half of its usual price for individuals, families and small businesses alike – which would attract healthy individuals from comprehensive markets while simultaneously lowering premiums overall.
The Working Class
A key objective of the Affordable Care Act (ACA) was to extend health coverage to millions of American who previously did not possess it, according to CPS ASEC data (Smith and Medalia 2015). According to these numbers, 48 million adults did not possess health coverage prior to implementation of ACA (Smith and Medalia 2015).
As well as expanding coverage, the Affordable Care Act also contains consumer safeguards that expand coverage; for instance, insurers cannot deny coverage based on preexisting conditions, and children can remain on parents’ policies until age 26. Unfortunately, certain ACA provisions impact work incentives in ways not fully understood yet.
As one example, the Affordable Care Act’s dependent coverage mandate may lead some young adults to move towards part-time work; yet families with one full-time and one part-time worker typically earn comparable wages after accounting for both salaries, health expenses, child care costs and other work-related costs. Furthermore, the ACA adds on average 1.9 percentage points in marginal earnings taxes which will significantly alter labor supply decisions.
