In 2008, then-candidate Obama promised a “golden age of American health care” in an speech in Columbus, Ohio. “Today, millions of Americans are uninsured,” he said. “These challenges require more than a theory of efficiency.”
The Obama administration wanted to meet that goal. The election made progress on the issue impossible to ignore.
The ACA reflected Obama’s broader proposals, including the creation of health benefit exchanges (and the implementation of subsidies for those who made too much to qualify for coverage on traditional insurance) and the hiring of physician-led “high-risk pools” to offer coverage to the uninsured. The law is also designed to roll back some of the barriers that prohibited insurers from selling coverage in certain states and leave others with narrow networks.
The law’s complicated implementation has been slow, though. For one thing, the paperwork has been complicated. For another, there are still many unanswered questions. Here’s a look at what happened:
Where does the individual mandate come from?
Health-insurance companies initially had to accept any individual who came into their office, regardless of their health. That included most young healthy adults. In theory, many such patients would keep their insurance and pay the monthly premium out of pocket, driving down premiums for older or sicker patients who needed coverage the most.
How do states let insurers offer coverage?
The law allows individuals to buy coverage outside of an exchange through a “health benefit exchange.” States run their own exchanges in most cases, but most states also set up new nonprofit organizations known as risk adjustment pools to ensure that insurers get paid when they cover high-risk patients (such as children with pre-existing conditions) and receive less when they don’t. Risk adjustment is one way insurers can adjust to survive in the new insurance world. In recent years, more and more companies have ditched traditional insurance for new options. That means insurers are expecting many new customers and fewer older or sicker ones.
Who are the winners and losers in that?
In the short term, these risk adjustment pools — and the new rules that govern them — will punish healthy people who buy insurance and reward older, sicker individuals who do not. That can cause some of these older or sicker customers to cut their insurance, leaving carriers with more of those customers who cannot pay their bills. Over time, as the pools get healthier, those consequences should reverse.
How do people with pre-existing conditions buy insurance?
The law requires insurers to accept those who come into their offices and to charge them the same rate as healthy customers. This part of the law doesn’t kick in until January 2014, but people who meet these terms by that date should not find it difficult to buy insurance.
How are rules for low-income people affected?
These people, who do not have employer coverage, often qualify for Medicaid under the old rules. The ACA expands Medicaid eligibility to individuals earning up to 138 percent of the federal poverty level ($30,319 for a family of four in 2013). This expansion is part of a larger goal of providing coverage to Americans who are currently uninsured. Some advocates for people with low incomes worry that more states will decide to opt out of the expansion in a few years. If they do, they worry they will put coverage out of reach for the vast majority of people living in poverty.