Why Was the Affordable Care Act Created?

Why Was the Affordable Care Act Created?

Why was the affordable care act created

The Affordable Care Act (ACA) was created to make health insurance more affordable and accessible. It expanded Medicaid eligibility and created a health insurance marketplace that helps people shop for plans.

It also prevented insurers from denying coverage due to preexisting conditions. It has since helped more than 20 million Americans get coverage.

Why was the Affordable Care Act Created?

The Affordable Care Act was created to expand coverage, hold insurance companies more accountable, lower healthcare costs, and increase the quality of health insurance/healthcare. It also increased competition and increased price transparency in the marketplaces.

The ACA ended pre-existing condition discrimination by banning insurance companies from denying or charging more for people with certain health conditions. It also required insurers to cover preventive care without charging more for services, lowered lifetime limits on coverage and allowed young adults to stay on their parents’ plans until age 26.

The ACA also introduced subsidies to help people afford affordable insurance. Individuals with incomes up to 400% of the federal poverty level can receive premium tax credits or special subsidies.


The Affordable Care Act was created to expand access to affordable, quality health insurance for Americans. This is done by requiring individuals to have health coverage, providing tax credits that can help people purchase insurance through the exchanges, and expanding Medicaid and CHIP.

One of the important aspects of the ACA is the Premium Tax Credit (PTC) which helps low-income individuals purchase health insurance through the marketplaces. It is based on family size and income, among other factors.

A PTC is not available to people who are eligible for Medicaid or CHIP, or to those with an offer of employer-sponsored coverage that is unaffordable.

A separate affordability rule for employees is based on the cost of single coverage, even if they have a spouse or dependents who would be able to enroll in a plan offered by the employee’s employer if it were affordable. This can leave spouses or dependents with unaffordable offers of employer-sponsored coverage, which makes it harder for them to qualify for subsidized Exchange coverage.

Medical Care That Is Innovative

The ACA created state or multistate-based insurance exchanges to allow individuals and small businesses to purchase health insurance. It also expanded Medicaid coverage and allowed young adults to remain on their parents’ policies until age 26.

Health care is a complex industry with many forces at work to hinder or support innovative ventures. Innovators must understand how these forces impact their ventures and be prepared to overcome them.

One important force is the consumer-focused innovation that is often a competitive threat to traditional health care providers. Consumers are savvy about their own health and can be skeptical of the effectiveness of medical advice.

Another force is the cost-pressured payers that are increasingly demanding accountability from health care technology innovators. They want to know that new innovations offer both short-term efficacy and long-term cost savings.

A third force is the regulators that have the power to aid or inhibit innovation. They can help or hurt an innovation by enacting laws or regulations, modifying or tightening existing rules, or punishing or rewarding a company that breaks rules.

Medicaid Expansion

The Medicaid expansion provisions of the affordable care act grew out of a need to make sure more low-income people have access to affordable health insurance. These provisions allow states to expand the coverage of people who earn up to 138% of the federal poverty level.

Those who qualify for expanded Medicaid will receive federal match of 100% for the first three years. After that, they will be responsible for financing the remaining 10% of their coverage costs.

Another benefit of expanding Medicaid is that it creates more jobs in the health care industry. This is because there is more demand for health care providers, more equipment needed to perform medical tests, and more maintenance jobs at hospitals.

The ACA also bans lifetime and annual monetary caps on coverage, limits use of preexisting condition exclusions, and establishes state rate reviews for insurance premium increases. These reforms help reduce cost, improve quality, and ensure that every American has access to affordable health care.

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About the Author: Raymond Donovan