10.7 Health insurance and the Affordable Care Act

The Affordable Care Act (ACA) aimed to expand health insurance coverage and reduce disparities in the US healthcare system. It introduced key provisions like the individual mandate, Medicaid expansion, and protections for pre-existing conditions.

While the ACA significantly reduced uninsured rates across racial and ethnic groups, challenges remain. Disparities persist due to factors like differences in Medicaid expansion and barriers to access. Future reforms may focus on universal healthcare and addressing social determinants of health.

Overview of health insurance in the US

• Health insurance in the US is primarily provided through employer-sponsored plans, individual private insurance, and government programs like Medicare and Medicaid
• The US healthcare system is unique among developed countries in its reliance on private insurance and high costs, which has led to significant disparities in access and outcomes based on factors like race, ethnicity, and socioeconomic status
• Prior to the Affordable Care Act (ACA), many Americans lacked insurance coverage due to high costs, pre-existing condition exclusions, and limited eligibility for public programs, disproportionately impacting communities of color

Key provisions of the Affordable Care Act

Individual mandate for health coverage

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• Required most individuals to obtain health insurance or pay a penalty, with the goal of expanding the risk pool and making coverage more affordable
• Provided exemptions for financial hardship, religious objections, and other factors
• Was repealed effective 2019 but many states have implemented their own mandates

Expansion of Medicaid eligibility

• Allowed states to expand Medicaid coverage to adults under 65 with income up to 138% of the federal poverty level, with federal funding covering 90% of the costs
• As of 2021, 38 states and DC have expanded Medicaid under the ACA
• Has significantly increased coverage for low-income adults, particularly in communities of color

Subsidies for purchasing insurance

• Provides premium tax credits for individuals and families with incomes between 100-400% of the federal poverty level to purchase coverage on the insurance marketplaces
• Also provides cost-sharing reductions to lower out-of-pocket expenses for low-income enrollees
• Has made marketplace coverage more affordable but some still find premiums and deductibles too high

Protections for pre-existing conditions

• Prohibits insurers from denying coverage, charging higher premiums, or excluding coverage for pre-existing health conditions
• Requires coverage of essential health benefits like preventive services, prescription drugs, and mental healthcare
• Has improved access to coverage for millions with health conditions but also contributed to higher premiums overall

Impact on racial and ethnic disparities

Changes in uninsured rates by race/ethnicity

• The ACA has significantly reduced uninsured rates across all racial and ethnic groups, with the greatest gains among Hispanics, Blacks, and Native Americans
• As of 2019, the uninsured rate was 7.9% for non-Hispanic whites, 10.1% for Blacks, 16.7% for Hispanics, and 20.5% for Native Americans, compared to 14.3%, 19.3%, 32.4%, and 30.7% respectively in 2013
• Despite progress, disparities persist, in part due to differences in Medicaid expansion, immigration status, and other barriers

Remaining barriers to healthcare access

• Even with insurance, many still face barriers like high out-of-pocket costs, limited provider networks, and lack of transportation or paid leave
• Disparities in access also stem from structural inequities like residential segregation, language barriers, and implicit bias in healthcare
• Addressing these will require targeted outreach, culturally competent care, and policies that tackle social determinants of health

Challenges and controversies

Opposition and legal challenges

• The ACA faced strong political opposition and legal challenges, including two major Supreme Court cases that upheld key provisions but struck down mandatory Medicaid expansion
• Opponents argue the law is government overreach, while proponents say it has expanded access and consumer protections
• Ongoing debate reflects deeper ideological divides over the role of government in healthcare

Sustainability of the insurance marketplaces

• Some insurers have exited the ACA marketplaces due to financial losses, leading to fewer plan choices and higher premiums in some areas
• Enrollment on the marketplaces has been lower than initially projected, in part due to high costs and the repeal of the individual mandate
• Stabilizing the marketplaces will likely require increased subsidies, reinsurance programs, and incentives for insurer participation

Affordability of premiums and deductibles

• While the ACA has made coverage more affordable for many, some enrollees still struggle with high premiums and deductibles, particularly those just above the subsidy threshold
• In 2021, the average benchmark premium for a 40-year-old was $452 per month, while the average deductible for a silver plan was$4,500
• Addressing affordability may involve expanding subsidies, capping out-of-pocket costs, and tackling underlying healthcare costs

Potential future reforms

Proposals for universal healthcare

• Some advocates argue the US should transition to a universal healthcare system like "Medicare for All" that would provide comprehensive coverage to all Americans
• Proponents say this would reduce costs, improve outcomes, and address disparities, while critics raise concerns about government control, tax increases, and impacts on private insurance
• Other proposals include a public option, lowering the Medicare eligibility age, or allowing people to buy into Medicaid

Role of states in shaping health policy

• States have significant flexibility in implementing the ACA, from running their own marketplaces to expanding Medicaid
• Some states have gone beyond the ACA with additional subsidies, reinsurance programs, or coverage expansions, while others have sought waivers to scale back provisions
• Future reforms may give states even more leeway to innovate, though this could also exacerbate geographic disparities

Addressing social determinants of health

• Recognizing that health is shaped by factors like income, education, housing, and discrimination, some argue that healthcare reform must be coupled with broader efforts to address social determinants
• This could include investments in early childhood, education, job training, affordable housing, and community development, as well as more integrated models of health and social services
• Addressing social determinants is key to advancing health equity and will require collaboration across sectors and levels of government