The Affordable Care Act: the Pros and Cons of the Reform

The Affordable Care Act

The Affordable Care Act (ACA) is the US federal statute that became law in 2010. The ACA introduced radical changes to the way patients received healthcare services and prescription medications, as well as the way they were provided with insurance services. The ACA was created by the team of President Barack Obama, that is why it is frequently called Obamacare.

The Affordable Care Act was introduced in order to reach the following goals:

  • to increase the number of American citizens provided with insurance;
  • to make healthcare services and prescription drugs more affordable;
  • to decrease health coverage costs.

The implementation of this reform leaded to both negative and positive consequences. For example, it provided 20 million of US citizens with the opportunity to get insurance, meanwhile, 6 million Americans lost insurance. In general, healthcare costs were decreased, but prices of prescription medications significantly increased for millions of patients.

To get a clear idea of the achievements provided by the ACA, let us discuss its advantages and disadvantages in detail.

The Key Pros of the Affordable Care Act:

  • Due to such financial help, low-income citizens received an opportunity to buy health insurance at a more affordable price. Also, the 80/20 rule was introduced, and, as a result, a different approach to the use of premium dollars was implemented. So, 80% of that money were redirected to healthcare, instead of administrative costs.
  • Free preventive services. According to the ACA, all health insurance plans should fully cover wellness visits, screenings and vaccines. That means that these preventive healthcare services are provided without any copays or deductibles.
  • No pre-existing denials. Employers and their insurance providers cannot refuse to provide insurance to employees with pre-existing diseases and conditions. They also cannot use pre-existing health problems as a reason for increasing insurance fees.
  • No surprise cancellations. Insurance companies cannot cancel policies, because of mistakes found in applications. The only exception ― grandfathered plans.
  • Enhancements to the Medicaid coverage. In a number of states, uninsured citizens under 65 with the income that does not exceed 133% of the federal poverty level have been provided with the access to Medicaid.
  • The prolongation of the period during which children can use their parents’ plans. Due to the ACA, kids can stay under their parent’s plans until the age of 26.
  • Cancellation of unreasonable limits. In the past, there were varied benefit limits, but the ACA cancelled lifetime limits and made a start to gradual phasing out of annual limits. Those changes did not affect grandfathered insurance plans.

The Main Cons of the Affordable Care Act:

  • Millions of Americans did not notice any decrease in healthcare costs. Many of those citizens, who are not provided with subsidies, still experience serious problems with paying for their insurance plans or just cannot afford them, which prevents them from getting access to the proper healthcare service.
  • A decrease in the number of employers sponsoring insurance for their employees. Some businessmen have made a decision to pay penalties instead of buying insurance plans for their employees. In many cases that is cheaper.
  • Cancellation of penalties for uninsured citizens. At the country level, those penalties were cancelled, however, some local authorities plan to change that situation at the state level.
  • A decrease in the number of available insurance providers. A significant number of insurance companies were forced to narrow their provider networks in order to cut expenses, since they had to find additional costs to meet the requirements of the ACA.
  • Problems with shopping for coverage. Shopping for insurance coverage became more complicated, due to failures of the websites, a wide range of different coverage options and limited enrollment periods.
  • Destabilization of the marketplace. After the introduction of the ACA, a number of insurance companies made a decision to leave the market, which led to a decrease in competition. Naturally, in some cases, that resulted in an increase in insurance prices. Also, the number of available insurance options was reduced. And, in some regions, there is just one variant left so far.

To sum up, the ACA was intended for helping uninsured Americans in the first place. For information, the number of such citizens exceeded 40 million before 2010. And in most cases they did not have any access to even the basic care. When the ACA was implemented, millions of financially disadvantaged citizens were provided with subsidies, so that they could afford to buy insurance plans. No doubt, that was a significant achievement. But, due to the selectivity of the act, millions of Americans still cannot afford insurance and have no access to proper healthcare services. In addition, a significant part of citizens lost their insurance, because of the introduction of new strict requirements for employers and insurance companies. Also, a decrease in competition caused a rise in insurance prices. So, the effectiveness of this law is disputable.