Health Care Reform: ACA and Its Impact

Chapter 5: Health Care Reform

The Patient Protection and Affordable Care Act was modified by the Health Care and Education Reconciliation Act of 2010.
Known as the Affordable Care Act (ACA) or Obamacare.
Three main goals of the ACA:
- Decrease the number of uninsured individuals.
- Slow the rising costs of healthcare.
- Increase the quality and efficiency of healthcare services.

The ACA of 2010 was the most significant healthcare reform legislation in the United States since the passage of Medicare and Medicaid in 1965.
Support for the ACA was divided along party lines.
Healthcare costs in the U.S.:
- 1970: Average cost per person was 355.
- 2010: Average cost per person was 8,402.
- 2018: Average cost per person was 11,172.
Healthcare spending as a percentage of GDP:
- 1970: 7% of GDP.
- 2010 and 2018: Nearly 18% of GDP.

Medicaid expansion increased access to healthcare.
The ACA initially required all states to expand Medicaid to include non-pregnant adults younger than 65 with incomes up to 138% of the federal poverty level (FPL).
Many states were initially reluctant to expand Medicaid.
The Medicaid expansion was legally challenged in 2012.
Before the ACA, Medicaid coverage varied by state, and most states did not cover adults without children.

Part-time and self-employed workers, as well as those buying insurance from non-group plans, could purchase insurance through the new Health Exchange or Marketplace.
States had the option to establish a State-Based Marketplace (SBM), default to a Federally Facilitated Marketplace (FFM), or operate in partnership with the federal government (FFM-P).
Navigators assist people in enrolling in a qualified health plan (QHP) through the Marketplace.
The ACA offers premium subsidies via an advance premium tax credit for individuals with incomes between 100% and 400% of the FPL, and cost-sharing reductions for those with incomes between 100% and 250% of the FPL.

New sources of health insurance with the ACA:
- Expansion of Medicaid.
- Marketplace or Health Exchanges.
- Allowing young adults to remain on their parents’ health insurance policy until age 26.
- Americans with pre-existing diseases, who were previously denied health insurance, were now eligible.
Expansion of the primary care workforce (physicians, nurse practitioners, and physician assistants) through scholarships and loan repayment programs.
Expanding the federally qualified health centers (FQHC).

The Center for Medicare and Medicaid Innovation was established.
Accountable Care Organizations (ACOs), offered through Medicare, were rewarded for lowering healthcare costs and providing quality care.
New payment reforms, such as bundling payments for surgery and follow-up home healthcare, were introduced.
Hospital Readmission Reduction Program (HRRP) includes incentives for healthcare providers to improve the quality and efficiency of health care.

Parts of the ACA have been weakened through various mechanisms, including executive orders, tax laws, underfunding of components, and lawsuits.
The Tax Cuts and Jobs Act of 2017 eliminated the individual mandate.

The ACA requires all health insurance policies to cover women’s preventive health services, including FDA-approved prescription contraceptives and counseling on birth control methods.
Employers with religious objections to contraceptives challenged this requirement.
Supreme Court decisions resulted in some female employees having no or limited coverage for contraceptives, depending on the religious beliefs of their employer.
A 2020 Supreme Court ruling allowed an exemption from contraceptive coverage for employers with religious or moral objections.

An estimated 20 million individuals gained health coverage between 2010 and 2016.
The percentage of uninsured Americans dropped from 18% to 10%.
By 2018, the percentage of the uninsured had dropped to 8.5%, and only 5.5% of children under age 19 were uninsured.
The majority of the newly insured were Latinos, as well as low- and middle-income adults who lived in states that expanded Medicaid.

As of July 2020, Medicaid expansion had been adopted in 38 states and Washington, D.C., with expansion yet to be implemented in two of the states.
Twelve states are not expected to expand Medicaid.
A coverage gap exists for those with incomes too high to qualify for Medicaid and too low to qualify for premium subsidies through the Marketplace.

National Health Expenditure (NHE) slowed between 2010 and 2014, with an average annual rate of 3.8%, the lowest since tracking began in 1960.
Uncompensated care (charity care) costs were estimated to be lowered by 5.7 billion in 2014.
The reduction in costs primarily came from fewer uncompensated hospital admissions and emergency room visits.
Newly insured individuals can obtain healthcare from a primary provider, which costs much less than going to the emergency room.

There were mixed results from programs designed to reduce healthcare costs and improve the quality of care.
The HRRP was successful in early years.
In 2019, 83% of eligible hospitals were penalized, with 2,583 hospitals charged a total of 563 million for readmissions.
ACOs were more successful in achieving the goals of saving costs while maintaining or improving the quality of care.

The Affordable Care Act (ACA) of 2010 was designed to increase access to health insurance, reduce healthcare costs, and improve the efficiency and quality of healthcare.
Certain provisions of the ACA were opposed by some states and businesses.
Opposition by states to expand Medicaid due to concerns about the long-term financial burden led to the U.S. Supreme Court modifying the ACA to make Medicaid expansion by states optional rather than mandatory.
Controversy about the requirement to cover prescriptions for contraceptives led to the Supreme Court decision to support religiously affiliated businesses, closely held corporations, or other employers that oppose contraceptives for female employees for religious or moral reasons to opt out of contraceptive coverage.
The Supreme Court ruled in favor of the U.S. government in allowing premium subsidies for individuals buying policies through the Federal Facilitated Marketplace.
The most significant impact of the ACA was the number of people who had health insurance after 2010 when the ACA was implemented.