The Affordable Care Act (aka the “ACA,” aka Obama-Care, aka Healthcare Reform) has had an impact on the delivery of healthcare in the U.S. This is a topic (implementation of the ACA) that I think is worth revisiting periodically. This post is largely factual… simply my observations as implementation of the Affordable Care Act continues to unfold.
As a reminder, this law has mainly expanded coverage in three ways:
- Expansion of Medicaid coverage to 139% of the Federal Poverty Line, up from 100%.
- Provision of subsidies for families up to 400% of the Federal Poverty Line to buy insurance coverage on government run healthcare exchanges.
- New protections, including allowing young adults to remain on their parents’ plans, mandating employers provide coverage to full time employees, and also enforcing shared responsibility of payment for individuals who do not maintain minimum essential coverage.
There were very few changes in 2015 (the majority of the law has been implemented, having been passed in 2010). Small changes in 2015 included the “employer mandate” that requires large employers to cover all full-time workers. The 2015 cut-off included employers with more than 100 employees. In 2016, this threshold will be reduced to ‘greater than 50 employees.’ Similarly, the individual mandate fee (also called the shared responsibility fee) has increased to twice of what it was for 2014 ($325 per person or 2% of annual income, compared to $162.5/1% in 2014).
The progress of getting more Americans into healthcare coverage plans is continuing. Eight million people purchased insurance in the marketplaces during the 2014 open enrollment. That number rose to 11.7 million who enrolled during the 2015 open enrollment. As of June 30, 2015, 9.9 million were still enrolled and paid for a marketplace plan. According to U.S. Health and Human Services (government) data, 17.6 million individuals are newly covered due to the ACA, between Marketplace, Medicaid expansion, young adults staying on their parents’ plans, and other coverage provisions. Gallup polls suggested that the uninsured rate had come down from 18% in 2013, to 11.4% by Q2 2015. Other studies show that while more than 20 million people may have new coverage due to the ACA, this is partly offset by the 6 million whose plans were cancelled because of the ACA existing as an alternative.
Interestingly, Congress is delaying some of the taxes that were intended to pay for the ACA. For example, the “Medical Device tax” (basically an excise tax on most medical devices sold in the U.S.) is suspended for two years (2016-17). Then there’s the “Cadillac tax” on high-value insurance plans – this has been delayed for two years (until 2020). The ACA is at serious risk of NOT being “cost-neutral” as Congress had initially intended.
It’s interesting watching politics as the Republicans have been vocally calling for a repeal of the ACA. Just being a realist… that ship has sailed. There are no concrete plans that Republicans have laid out, and the few rough plans described have basically arranged to keep the status quo with small changes and a different name. Too many people have new health insurance now. Trying to take away insurance coverage would be disruptive and destructive. Plus, these people with insurance are voters. Politicians seem to know they risk their jobs when they make voters unhappy.
You’ll notice I haven’t opined on whether the ACA is a good or bad thing. I will venture to say this… before the ACA, hospitals were required to give care to anyone who showed up in the emergency room needing treatment. This was actually passed into law by Ronald Reagan. People with no insurance could not pay, and hospitals simply charged more to other people (those who had insurance). The new taxes aren’t really new. They are just shifting the way monies are collected in total. Programs that give people a sense of security and allow people to seek preventative care (and hopefully avoid higher costs later) are good for society at large. The ACA has its flaws, but I believe society and healthcare both are better for its passage.
Sources: The Affordable Care Act, section by section (US Dept. of Health and Human Services); Secretary Burwell previews third open enrollment (US Dept. of Health and Human Services); U.S. Uninsured rate at 11.4% in Second Quarter (Gallup.com); Medical Device Excise Tax (Internal Revenue Service); Consolidated Appropriations Act, 2016 (Congress.gov); Trends in Health Insurance Enrollment 2013-2015 (RAND Corporation); June 30, 2015 Effectuated Enrollment Snapshot (Centers for Medicare and Medicaid Services)