The Affordable Care Act, or Obamacare, aims to reduce healthcare costs and expand health insurance coverage to millions of Americans. It includes a wide range of reforms, including new benefits like prescription drug coverage and mental health coverage, as well as programs to shift the focus from volume to value. In addition to the programs mentioned above, it also includes provisions to combat fraud and abuse, improve data collection, and help prepare for public health emergencies. It also allows the Food and Drug Administration to approve generic versions of biologic drugs, and provides a number of incentives and penalties designed to encourage healthy behavior.
Among the most significant reforms, the ACA prohibits insurers from denying coverage to people with preexisting conditions and limits how much they can charge for plan premiums and out-of-pocket costs. It also requires health plans to offer a variety of preventive services with low copays or deductibles, in the hope that they will help keep people healthier and reduce costs over time.
In the past, many people with chronic illnesses incurred large medical bills that they could not afford. The ACA helps these people by allowing them to apply for state assistance through the health insurance marketplaces, known as exchanges. The ACA also requires employers with more than 50 employees to either provide health insurance or pay a tax penalty. It also requires most individuals to maintain health insurance, either through the individual marketplace or by purchasing a plan in their community.
As a result of these new programs and other ACA provisions, more than 16 million Americans obtained health insurance coverage in the first five years of the law’s existence. Many of them had never before had health insurance, and some had been forced to go without coverage due to expensive medical bills or job loss.
The ACA also includes other measures to drive down costs and improve efficiency. For example, it establishes a program called the bundled payments model, which reimburses a hospital for an entire episode of care (such as antibiotics, surgery, and operating room time) rather than reimbursing each provider separately for their specific services. This allows hospitals to focus on reducing costs and improving patient outcomes instead of just maximizing their revenue by seeing as many patients as possible.
Another important provision of the ACA is its requirement that all qualified health plans cover essential services, which includes obstetric and gynecological services, cancer screenings, and mental health treatment. This requirement applies to all health plans sold on the ACA marketplaces, as well as most private health insurance plans purchased in the non-exchange market, except short-term plans and certain grandfathered individual and small group plans.
A controversial component of the ACA is its individual mandate, which requires most Americans to enroll in health insurance or face a penalty. While the ACA includes many “carrots” to encourage people to get and stay enrolled in health insurance, it also contains several “sticks,” such as the individual mandate penalty and limited enrollment opportunities. The ACA also included provisions to stabilize and strengthen the health insurance markets, such as by providing enhanced marketplace subsidies and expanding eligibility for cost-sharing reductions.