On March 23, 2010, then-U.S. president Barack Obama signed the Patient Protection and Affordable Care Act into law, otherwise known as ACA or Obamacare. At the time the health reform was introduced, nearly 50 million people had no health insurance – or one out of every six Americans. That was by far the most miserable performance among healthcare systems in developed countries. More surprising because the United States has the highest spending on health as a percentage of GDP, at almost 17 percent. For perspective, Australia’s health consumed around nine percent and Germany’s around 11 percent of their respective national GDPs. Per capita, the U.S. spent twice as much as comparable developed countries. The previous health coverage system also allowed insurers to refuse coverage for a person if they had a pre-existing condition. These factors led to a fragile healthcare system and an insecure life for many non-affluent people. Thus, it is no wonder that according to some surveys during 2008, over 80 percent of Americans demanded an overhaul of the healthcare system.
The main aims of the ACA are increasing access to affordable, quality healthcare and reducing the rising U.S. health expenditures. To achieve this, many health reforms were needed. These can be broadly categorized into reforms on healthcare coverage and access and reforms of the healthcare payment and delivery system. Most importantly the ACA expanded Medicaid eligibility, created health insurance exchanges (otherwise known as ACA marketplaces), mandated health insurance for all (or face a tax penalty), and protected those with pre-existing health conditions from being charged more or being refused coverage by insurance companies. As of 2023, roughly 40 million individuals now benefit from ACA-related enrollment in health care programs such as Medicaid or purchased from the Marketplace. Not only has this driven down the rate of uninsured, but numerous studies have reported the positive impact of Medicaid expansion. One such study estimated that just during the four years after 29 states expanded Medicaid, roughly 19.2 thousand lives were saved from treatable conditions (such as heart disease and diabetes). Another focus of health policy makers, before moving on to larger goals such as Medicare-for-all or single-payer systems, is reducing high cost-sharing and deductibles. Surveys show that while the share of uninsured has decreased, instead there is an increase of those who are insured but effectively underinsured because their out-of-pocket health costs are still too high and unaffordable compared to their income.
A health reform as large as the ACA is of course not without its flaws. One of these is the Medicaid ‘coverage gap’. When the ACA was first written into law, it was expected that all Americans with household income up to 138% of federal poverty level (FPL) would receive coverage under Medicaid, thus only those earning between 100%-400% FPL were eligible for ACA marketplace subsidies (also known as premium tax credits). However, in 2012, the supreme court ruled that states were allowed to decide whether they will expand Medicaid or not, and currently (as of the end of 2021) 12 states still have not expanded Medicaid. Therefore, there are an estimated 1.9 million people in these non-expansion states that earn too much to be eligible for Medicaid in their state (average eligibility is 40% FPL, or roughly 580 U.S. dollars per month for a household of two), but less than 100% FPL and therefore ineligible for marketplace subsidies. Moreover, without expansion, childless adults are also ineligible for Medicaid, no matter how low their income is, yet adults living alone represent the highest share of those uninsured. The Biden-administration is doing what it can to encourage the remaining states to expand Medicaid through the American Rescue Plan Act of 2021, which provides further temporary fiscal incentives. Another issue is the 'family glitch,' which prevented families with employer-sponsored coverage from receiving financial assistance for Marketplace coverage. Until 2023, the affordability of an employer-sponsored health plan was decided only by the cost of the employee, with no consideration given to the cost of adding family members. According to the KFF analysis, the family glitch rendered 5.1 million Americans ineligible for marketplace subsidies. This is set to change from 2023, since the IRS has introduced a new regulation to replace a 2013 IRS policy that caused the "family glitch".
The ACA remains a much debated topic in the United States. Originally, even the term ‘Obamacare’ was used by opponents of the law in a pejorative way. Many conservatives see it as a governmental takeover of the healthcare system, portraying it in an un-American, unconstitutional, and even ‘socialist’ light. Opponents were willing to spend around 420 million dollars on TV ads to portray the law negatively, while only 27 million dollars were spent supporting the new law. For seven years, the republicans have campaigned the repeal and replacement of Obamacare, yet when they finally had the authority to execute their plans in 2017, they failed. This was largely due to opposing views within the party – because many republican legislatures actually liked parts of Obamacare such as the protection against preexisting conditions – and most importantly because of a lack of a clear replacement plan. Because in spite of its flaws, the ACA has indisputably achieved increased coverage and every republican plan so far would have decreased coverage while increasing premiums or deductibles for many. However, the Trump-administration did leave marks, such as rendering the individual mandate null, meaning there was no monetary punishment for people foregoing health insurance. This was thought to bring about the collapse of the ACA’s ‘three-legged stool’ approach. While there was indeed a rise in the percentage of uninsured after 2017, overall, the system has held steady. Other laws enacted to decrease Medicaid advertisement funding or reduce the open-enrollment period among others, have also been slowly reversed by Biden’s administration. Since the beginning, public opinion about the health reform has been very mixed, although those seeing the ACA favorably has finally reached a stable majority.
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