More than 16 million Americans obtained health insurance coverage within the first five years of the ACA. Young adults make up a large percentage of these newly insured people.
Insurance companies must now spend at least 80 percent of insurance premiums on medical care and improvements. The ACA also aims to prevent insurers from making unreasonable rate increases. A preexisting condition, such as cancer , made it difficult for many people to get health insurance before the ACA. They said this was because the illness or injury occurred before you were covered by their plans.
Before the ACA, some people with chronic health problems ran out of insurance coverage. Insurance companies set limits on the amount of money they would spend on an individual consumer. Insurance companies can no longer maintain a preset dollar limit on the coverage they provide their customers. The ACA covers many screenings and preventive services.
These usually have low copays or deductibles. Healthier consumers will lead to lower costs over time. For example, a diabetes screening and early treatment may help prevent costly and debilitating treatment later. Christopher Lillis, an internist in Virginia and a member of Doctors for America. The ACA promised to make prescription drugs more affordable. Many people, particularly senior citizens, are unable to afford all their medications. The number of prescription and generic drugs covered by the ACA is growing every year.
Insurance companies now provide a wider range of benefits and cover people with preexisting conditions. This has caused premiums to rise for a lot of people who already had health insurance.
The goal of Obamacare is for people to be insured year round. Recent events have changed this fine, and beginning with the tax year it will be eliminated. ACA supporters argue that not having insurance passes your healthcare costs on to everyone else. Several new taxes were passed into law to help pay for the ACA, including taxes on medical device and pharmaceutical sales. Taxes were also increased for people with high incomes.
In fact, the majority of adults at all ages are in good health and thus are all good insurance risks. Insurers have an interest in keeping these "good risk" adults enrolled. When costs increase for older enrollees, these healthier adults are the most likely to drop coverage. We assume that the individual mandate is in effect, tax credits and subsidies for marketplace coverage are available for qualifying individuals, and Medicaid expansion has occurred in participating states.
RAND analysis found that in general eliminating essential benefits would reduce premiums overall but also sharply increase costs for consumers who need those services. Medicaid expansion has accounted for most of the newly insured under the ACA — approximately 14 million, according to the Kaiser Family Foundation. The federal government currently contributes 50 percent to 75 percent of total costs for Medicaid enrollees who were eligible prior to the ACA, higher amounts for CHIP enrollees, and higher amounts for those made eligible for Medicaid because of the ACA.
Concerns about the potential long-term costs of this arrangement have fueled proposals to modify financing for Medicaid. Some proposals would convert Medicaid financing to a block grant to states. Under this plan, states would receive a lump sum federal payment for Medicaid, indexed to inflation.
The payment is fixed regardless of enrollment. We estimated the block grants as a component of the Trump campaign platform. Under this arrangement, the federal government sets a limit on how much to reimburse states per enrollee. Cost growth per enrollee is indexed to inflation. We estimate that under one such proposal the AHCA Medicaid enrollment would fall by nearly 10 million people by The impact becomes more pronounced over time, with Medicaid enrollment falling by nearly 14 million.
We also estimate that this change will shift costs to the states over time, as recent growth in per capita Medicaid costs exceeds the Medical Consumer Price Index, and this trend may continue. This is not an inherent effect of per capita caps, but as implemented under the AHCA, the caps would reduce funding for the Medicaid expansion population. States could respond in several ways:. The net effect of these provisions will most likely translate into some combination of lower Medicaid enrollment and less generous coverage.
Of the various mechanisms for raising revenues in the ACA, one of the most debated has been the "Cadillac tax," scheduled to take effect in The tax would be jointly paid by employers and workers on their respective contributions. The Cadillac tax seeks to address problems with the tax advantage for employer-sponsored insurance ESI , which allows premiums to be paid with an unlimited amount of pre-tax dollars.
The current tax break has been criticized for encouraging overly comprehensive benefits and promoting overconsumption of care. However, the Cadillac tax has also been criticized for making high-cost plans too expensive, particularly for firms with older and sicker workers, and because the flat 40 percent excise tax is not progressive, like federal income tax. A third option that could address both sets of concerns is a cap on the tax advantage for ESI known as an "exclusion cap".
Under this cap, individuals in employer plans could exclude premiums from their taxable income up to a dollar limit. Premiums in excess of the cap would be treated as taxable income and, therefore, subject to federal and state income taxes. The same limits would apply to employers. Like the Cadillac tax, an exclusion cap addresses the problem of ESI's open-ended tax advantage, but would be more equitable because the impact is smaller for people with lower incomes. For families in all income categories, spending for health benefits declines, but the declines are larger for the Cadillac tax than for the tax cap.
But when changes in health benefits are combined with changes in take-home pay, the differences in progressivity between the Cadillac tax and the tax cap were small. The research also suggested that employers might respond to either the Cadillac tax or the exclusion cap by reducing their health benefits for employees. To avoid paying the 40 percent excise tax or the amount above the exclusion cap, employers may reduce the generosity of the health insurance plans that they offer.
Because wages are subject to income and payroll tax, these changes would increase federal revenue. As policymakers weigh the choices ahead, it is clear that tensions exist between many health policy goals—for example, expanding coverage versus reducing costs; targeting tax credits effectively versus incentivizing work; protecting the sickest and most expensive patients versus preserving choice among the majority of patients who may not need comprehensive coverage; and limiting the federal government's cost liability versus minimizing cost-shifting to consumers and states.
Deciding among these goals or striking a balance across them will involve political and value calculations about what the U. The Future of U. Using COMPARE , researchers have examined the impact of many configurations of health insurance in the United States, including: maintaining the ACA with no changes repealing the law with no replacement replacing the law with a single payer system replacing the law with other measures that address coverage expansions through Medicaid and the individual market RAND research has also examined the impact of retaining the ACA while modifying key provisions, including: repealing the individual mandate modifying tax credit subsidies revising market regulations modifying Medicaid expansion Below, we summarize the impacts of these alternatives, focusing on the effect of potential changes to the ACA on the number of uninsured and consumer out-of-pocket costs.
The plan would not allow private health insurance. There is little or no cost sharing for enrollees. Around 4. At a rally this week, Mr Trump again promised his supporters: "We are going to get rid of Obamacare. Congressional Republicans last year finally succeeded in repealing the Obamacare requirement that people buy health insurance or pay a tax penalty. In December , a federal judge in Texas ruled that the repeal of this "essential" part of the law meant the entirety of Obamacare is therefore unconstitutional.
The law, however, remains in place as an appeal heads to the US Supreme Court. The mandate was not as successful as Obamacare's architects hoped in driving younger, healthier Americans into the healthcare marketplace.
Now, as they ditch their coverage, analysts say insurance firms are making up for the loss by charging more to the sick or medically vulnerable patients left behind.
In , the Trump administration allowed small businesses to offer Americans cheaper, less-comprehensive policies called Association Health Plans AHPs that last only up to a year. Since AHPs are short-term, companies can charge higher premiums or deny coverage based on medical history and pre-existing conditions, which Obamacare made illegal for long-term plans.
These skimpy plans are meant to appeal to young, healthy Americans, but some AHPs may not cover basics like prescription drugs or maternity care. Initially, users had 90 days to sign up for insurance on the federal marketplace. In , the Trump administration cut it down to 45 days, and then closed the website every Sunday for 12 hours, citing maintenance.
Insurance companies who covered lower-income Obamacare patients used to get cost-sharing reduction CSR payments from the US government. When the Trump administration cancelled these payments in October , insurance firms increased premiums to compensate for the loss. The end of CSR payments had little effect on lower-income Americans, who still receive other healthcare subsidies. But it did lead to a cost hike for patients who pay full-price for their medical coverage. The Trump administration has tried to push through work requirements for those using Medicaid - a free healthcare service for low-income Americans - saying it's a way to help end poverty.
The policies are state-led and then federally approved. So far, eight states have passed rules requiring many Medicaid users to work, volunteer or train to receive benefits, US media report.
On 27 March, a federal judge in Washington DC blocked "arbitrary and capricious" Trump administration-approved policies in Arkansas and Kentucky, punting them back to the Department of Health and Human Services for amending.
For now, former President Obama's law limps on. He posted a video last December urging uninsured Americans to register.
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