The History of the Affordable Care Act


The ACA and You

The ACA is a far-reaching health care overhaul that seeks to provide a route to insurance for the uninsured while also better protecting the insured from potential abuses. This cannot be done piecemeal -- it requires widespread participation by individuals, businesses and states.

Under the ACA, individuals and small businesses compare and choose private health plans on health exchanges. People also can use the federal marketplace to determine if they qualify for Medicaid or CHIP. To keep premiums and out-of-pocket costs down, federal subsidies -- based on household income and family size -- are available as tax credits to anyone who buys insurance through the exchanges (but see sidebar). To keep lower program costs, the law includes an individual mandate, requiring that most Americans have health coverage or pay a fee equal to (as of 2015) 2 percent of household income or $325 per adult ($162.50 per child), whichever is higher [sources: HealthCare.gov; Hossain and Quealy].

Those already insured by a plan that existed as of March 23, 2010, could see their plans grandfathered in, at least temporarily, as long as the insurers in question haven't greatly cut benefits or raised subscriber costs. Job-based plans can enroll new clients, but individual plans can only keep whatever subscribers they had as of March 23, 2010. Grandfathered plans must meet some but not all ACA reforms. To qualify, they must no longer have lifetime limits or arbitrary cancellations, must allow adult children up to age 26 to remain on parents' plans, and must meet standards of transparency and health-care-related spending (as opposed to administrative costs). In practice, these rules are more complicated than they sound, and are further affected by, for example, whether the companies' will comply with ACA standards or simply cancel the policies [sources: HealthCare.gov; Hossain and Quealy].

Regarding Medicare, the ACA will close the prescription "doughnut hole" by 2020 and offer savings in the meantime through limited discounts and drug coverage [sources: Bash et al.; Desjardins, Keck and Silverleib; Medicare.gov].

The ACA also includes a controversial business mandate, which requires some companies to provide employee coverage or face fines of $2,000 to $3,000 per employee [sources: Bash et al.; Desjardins, Keck and Silverleib; Somashekhar]. But complications arising from required record-keeping have obliged the administration to grant deadline extensions to businesses. Moreover, many such companies are in the process of limiting worker hours or reducing new and seasonal hires to avoid having to offer the insurance -- a problem that has critics on both sides arguing that the business mandate be dropped. Doing so could cost an estimated $150 billion in expected fines over the next decade, money earmarked to help pay for individual subsidies [source: Somashekhar].

Meanwhile, businesses with fewer than 25 full-time employees who average about $50,000 a year or less in salary can qualify for a health care tax credit if they pay at least 50 percent of employee premiums [source: HealthCare.gov].

As Americans head into the Nov. 15, 2014, open enrollment period, many details, including the tax structure that will partially fund the ACA, are still being hammered out. Further technical trials await the exchanges, along with court challenges and continued political opposition. Thanks to the first round of enrollment, 8 million Americans have insurance now who did not have it before, but only time will tell if the trend continues, or if the ACA ultimately succeeds.

Author's Note: The History of the Affordable Care Act

As I write this, the history of the ACA is still being written. How it will ultimately fare is a question of political will, legal wrangling and technical growing pains. I did my best to hit a moving, morphing target, and I hope you find the recap of where we are, how we got there and where we are currently heading as interesting as I did.

I think the major question historians will debate years from now is that of lost opportunity on both sides. The Republicans, by removing themselves from the negotiating table entirely, made passage more difficult but also lost any greater opportunity they might have had to shape the legislation. The Democrats, meanwhile, might have pushed to revive the public option at the 11th hour -- or gambled and lost their shaky coalition in the process.

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