Implementing the Affordable Care Act: Remaining Hurdles

Abstract

Passed along political party lines, the Patient Protection and Affordable Care Act (ACA) was signed into law in March 2010. The ACA is being implemented in stages, with 2014 marking the Act’s most important milestone as federal and state exchanges began offering insurance coverage to previously un- and underinsured individuals. Critics suggest the ACA is a divisive piece of legislation. Nonetheless, the Act contains 2 major provisions on which there is some semblance of consensus: the expansion of insurance coverage for dependants up to age 26 years, and the requirement that insurance companies cover all applicants and offer the same premium rates irrespective of preexisting conditions or sex. Other provisions have proven to be far more controversial. These provisions include the ACA’s main vehicle, to increase health insurance coverage by expanding Medicaid. Correspondingly, the ACA has established federal and state exchanges on which people can buy policies while receiving income-based subsidies to help cover the costs of premiums. The latest Supreme Court legal challenge (King v Burwell) argues that subsidies cannot be granted to federal exchanges, as the law stipulates that subsidies are to be allocated to state exchanges. The ACA’s imposition of individual and employer mandates continues to draw the ire of critics. Detractors suggest that such mandates restrict freedom of choice and the functioning of a competitive health insurance market. Paradoxically, the mandates were designed to enable the health insurance market to better pool risks and therefore to function more optimally. Specifically, to prevent state-exchange insurers from being subjected to the problem of adverse selection—which would lead to disproportionate numbers of beneficiaries with high health care costs enrolling in exchanges—the ACA levies a penalty for individuals who elect not to purchase insurance. Additionally, to maintain current levels of employer-provided coverage, businesses with Z50 employees that do not offer health insurance will incur a financial penalty, starting in 2016. Now that the ACA is law, it is time for a progress report. In this theme issue, contributors evaluate some of the opportunities and challenges facing ACA implementation.