The Patient Protection and Affordable Care Act, often shortened to the Affordable Care Act (ACA) or nicknamed Obamacare, is a United States federal statute enacted by the 111th United States Congress and signed into law by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act of 2010 amendment, it represents the U.S. healthcare system's most significant regulatory overhaul and expansion of coverage since the passage of Medicare and Medicaid in 1965. Once the law was signed, provisions began taking effect, in a process that continued for years. Some provisions never took effect, while others were deferred for various periods.
Existing individual health plans Plans purchased after the date of enactment, March 23, 2010, or old plans that changed in specified ways would eventually have to be replaced by ACA-compliant plans.
At various times during and after the ACA debate, Obama stated that "if you like your health care plan, you'll be able to keep your health care plan". However, in the fall 2013 millions of Americans with individual policies received notices that their insurance plans were terminated, and several million more risked seeing their current plans cancelled.Obama blames 'bad apple' insurers for canceled coverage, Reuters.com, October 30, 2013.
Obama's previous unambiguous assurance that consumers' could keep their own plans became a focal point for critics, who challenged his truthfulness. On November 7, 2013, President Obama stated: "I am sorry that [people losing their plans] are finding themselves in this situation based on assurances they got from me." Various bills were introduced in Congress to allow people to keep their plans.
In late 2013, the Obama Administration announced a transitional relief program that would let states and carriers allow non-compliant individual and small group policies to renew at the end of 2013. In March 2014, HHS allowed renewals as late as October 1, 2016. In February 2016, these plans were allowed to renew up until October 1, 2017, but with a termination date no later than December 31, 2017.
2010 In June small business tax credits took effect. For certain small businesses, the credits reached up to 35% of premiums. At the same time, uninsured people with pre-existing conditions could access the federal high-risk pool. Also, participating employment-based plans could obtain reimbursement for a portion of the cost of providing health insurance to early retirees.
In July the Pre-Existing Condition Insurance Plan (PCIP) took effect to offer insurance to those who had been denied coverage by private insurance companies because of a pre-existing conditions. Despite estimates of up to 700,000 enrollees, at a cost of approximately $13,000/enrollee, only 56,257 enrolled at a $28,994 cost per enrollee.
2011 As of September 23, 2010, pre-existing conditions could no longer be denied coverage for children's policies. HHS interpreted this rule as a mandate for "guaranteed issue", requiring insurers to issue policies to such children. By 2011, insurers had stopped marketing child-only policies in 17 states, as they sought to escape this requirement.
The average beneficiary in the prior coverage gap would have spent $1,504 in 2011 on prescriptions. Such recipients saved an average $603. The 50 percent discount on brand name drugs provided $581 and the increased Medicare share of generic drug costs provided the balance. Beneficiaries numbered 2 million
2012 In National Federation of Independent Business v. Sebelius decided on June 28, 2012, the Supreme Court ruled that the individual mandate was constitutional when the associated penalties were construed as a tax. The decision allowed states to opt out of the Medicaid expansion. Several did so, although some later accepted the expansion.
2013 In January 2013, the Internal Revenue Service ruled that the cost of covering only the individual employee would be considered in determining whether the cost of coverage exceeded 9.5% of income. Family plans would not be considered even if the cost was above the 9.5% income threshold. This was estimated to leave 2–4 million Americans unable to afford family coverage under their employers’ plans and ineligible for subsidies.
A June 2013, study found that the MLR provision had saved individual insurance consumers $1.2 billion in 2011 and $2.1 billion in 2012, reducing their 2012 costs by 7.5%. The bulk of the savings were in reduced premiums, but some came from MLR rebates.
On July 2, 2013, the Obama Administration announced that it would delay the implementation of the employer mandate until 2015.
The Community Living Assistance Services and Supports Act (or CLASS Act) was enacted as Title VIII of the ACA. It would have created a voluntary and public long-term care insurance option for employees.Carney, Timothy (February 28, 2011) So, yeah, the health-care bill was really an awful piece of legislation that sent the revolving door spinning faster, Washington Examiner In October 2011 the administration announced it was unworkable and would be dropped. The CLASS Act was repealed January 1, 2013.
The launch for both the state and federal exchanges was troubled due to management and technical failings. HealthCare.gov, the website that offers insurance through the exchanges operated by the federal government, crashed on opening and suffered endless problems. Operations stabilized in 2014, although not all planned features were complete.
CMS reported in 2013 that, while costs per capita continued to rise, the rate of increase in annual healthcare costs had fallen since 2002. Per capita cost increases averaged 5.4% annually between 2000 and 2013. Costs relative to GDP, which had been rising, had stagnated since 2009. Several studies attempted to explain the reductions. Reasons included: Higher unemployment due to the 2008–2010 recession, which limited the ability of consumers to purchase healthcare; Out-of-pocket costs rose, reducing demand for healthcare services. The proportion of workers with employer-sponsored health insurance requiring a deductible climbed to about three-quarters in 2012 from about half in 2006. ACA changes that aim to shift the healthcare system from paying-for-quantity to paying-for-quality. Some changes occurred due to healthcare providers acting in anticipation of future implementation of reforms.
2014 On July 30, 2014, the Government Accountability Office released a non-partisan study that concluded that the administration did not provide "effective planning or oversight practices" in developing the ACA website.
In Burwell v. Hobby Lobby the Supreme Court exempted closely held corporations with religious convictions from the contraception rule. In Wheaton College vs Burwell the Court issued an injunction allowing the evangelical college and other religiously affiliated nonprofit groups to completely ignore the contraceptive mandate.
A study found that average premiums for the second-cheapest ( silver) plan were 10–21% less than average individual market premiums in 2013, while covering many more conditions. Credit for the reduced premiums was attributed to increased competition stimulated by the larger market, greater authority to review premium increases, the MLR and risk corridors.
Many of the initial plans featured narrow networks of doctors and hospitals.
A 2016 analysis found that health care spending by the middle class was 8.9% of household spending in 2014.
2015 By the beginning of the year, 11.7 million had signed up (ex-Medicaid). On December 31, 2015, about 8.8 million consumers had stayed in the program. Some 84 percent, or about 7.4 million, were subsidized.
Bronze plans were the second most popular in 2015, making up 22% of marketplace plan selections. Silver plans were the most popular, accounting for 67% of marketplace selections. Gold plans were 7%. Platinum plans accounted for 3%. On average across the four metal tiers, premiums were up 20% for HMOs and 18% for EPOs. Premiums for POS plans were up 15% from 2015 to 2016, while PPO premiums were up just 8%.
A 2015 study found 14% of privately insured consumers received a medical bill in the past two years from an out-of-network provider in the context of an overall in-network treatment event. Such out-of-network care is not subject to the lower negotiated rates of in-network care, increasing out-of-pocket costs. Another 2015 study found that the average out-of-network charges for the majority of 97 medical procedures examined "were 300% or higher compared to the corresponding Medicare fees" for those services.
Some 47% of the 2015 ACA plans sold on the Healthcare.gov exchange lacked standard out-of-network coverage. Enrollees in such plans typically received no coverage for out-of-network costs (except for emergencies or with prior authorization). A 2016 study on Healthcare.gov health plans found a 24 percent increase in the percentage of ACA plans that lacked standard out-of-network coverage.
The December spending bill delayed the onset of the "Cadillac tax" on expensive insurance plans by two years, until 2020.
The average price of non-generic drugs rose 16.2% in 2015 and 98.2% since 2011.
2016 As of March 2016 11.1 million people had purchased exchange plans, while an estimated 9 million to 10 million people had gained Medicaid coverage, mostly low-income adults. 11.1 million were still covered, a decline of nearly 13 percent. 6.1 million uninsured 19- to 25-year-olds gained coverage.
Employers A survey of New York businesses found an increase of 8.5 percent in health care costs, less than the prior year's survey had expected. A 10 percent increase was expected for 2017. Factors included increased premiums, higher drug costs, ACA and aging workers. Some firms lowered costs by increasing cost-sharing (for higher employee contributions, deductibles and co-payments). 60% planned to further increase cost-sharing. Coverage and benefits were not expected to change. Approximately one fifth said ACA had pushed them to reduce their workforce. A larger number said they were raising prices.
Insurers The five major national insurers expected to lose money on ACA policies in 2016. UnitedHealth withdrew from the Georgia and Arkansas exchanges for 2017, citing heavy losses. Humana exited other markets, leaving it operating in 156 counties in 11 states for 2017. 225 counties across the country had access to only a single ACA insurer. A study released in May estimated that 664 counties would have one insurer in 2017.
Aetna cancelled planned expansion of its offerings and following an expected $300 million loss in 2016 and then withdrew from 11 of its 15 states. In August 2016 Anthem said that its offerings were losing money, but also that it would expand its participation if a pending merger with Cigna was approved. Aetna and Humana's exit for 2017 left 8 rural Arizona counties with only Blue Cross/Blue Shield.
Blue Cross/Blue Shield Minnesota announced that it would exit individual and family markets in Minnesota in 2017, due to financial losses of $500 million over three years.
Another analysis found that 17 percent of eligibles may have a single insurer option in 2017. North Carolina, Oklahoma, Alaska, Alabama, South Carolina and Wyoming were expected to have a single insurer, while only 2 percent of 2016 eligibles had only one choice.
Aetna, Humana, UnitedHealth Group also exited various individual markets. Many local Blue Cross plans sharply narrowed their networks. In 2016 two thirds of individual plans were narrow-network HMO plans.