The Coverage Provisions in the Affordable Care Act: An Update
Four years after the law was enacted, the ACA remains controversial. While many support individual provisions included in the law, Americans are divided in their opinions on the law overall. The political future of the law continues to be debated in Congress and in state legislatures across the country, and ongoing legal challenges create uncertainty. Yet, in the face of these many hurtles and setbacks, real progress has been made in implementing key features of the ACA and important steps have been taken to improve access to and affordability of health coverage for millions of people.
As implementation of the ACA moves forward, a number of key challenges persist:
- The future of the ACA’s coverage expansions remains uncertain. The biggest potential threat to the long-term stability of the Marketplaces is the impending Supreme Court decision in the King v. Burwell A decision in favor of the plaintiffs will not only cut off subsidies in states with a federally-run Marketplace pushing many people back into the ranks of the uninsured, but the viability of the Marketplaces in these states will be threatened as premiums rise. At the same time, debate over the Medicaid expansion will continue in a few states in the coming year given that there is no deadline for expanding Medicaid. More governors may pursue alternative models through waivers; however, opposition to the Medicaid expansion remains strong in state legislatures. Nevertheless, decisions by even a small number of states to expand Medicaid would increase the number of people with access to affordable health coverage. Further complicating the coverage picture, funding for the Children’s Health Insurance Program (CHIP) expires in 2015. While CHIP has maintained broad bipartisan support, the debate over funding and CHIP’s future will be complicated by the availability of coverage through the Marketplaces and questions over how best to integrate CHIP with Medicaid, Marketplace, and employer-sponsored coverage.
- Although enrollment in the second year was strong, many uninsured remain unaware of the requirements to have coverage and of subsidies available to make coverage more affordable. Public opinion polls find over half of the uninsured do not know that the law provides financial help to low and moderate income Americans and nearly four in ten uninsured expect to remain uninsured.1 With limited funding for marketing and outreach, reaching these potentially eligible consumers will be harder. Navigators and other enrollment assisters will continue to play an important role in supporting enrollment, especially among hard to reach populations; however, as Marketplace funding for these programs shrinks, their role may be jeopardized.
- Affordability of coverage is a concern. Premium growth for both employer group coverage and in the new Marketplaces has been modest overall. However, it is unclear whether the moderate premium growth seen over the past couple of years will continue. While subsidies in the Marketplaces will protect many consumers from sharp increases in premiums, those who purchase coverage without financial assistance would feel the full impact of the cost growth. In addition to premiums, high deductibles and other cost sharing in plans in the Marketplaces place a significant financial burden on those who need health services. While, overall, the increase in health insurance coverage appears to be reducing cost-related barriers to accessing health care, the high cost sharing in Marketplace plans may limit access to needed care for some and premiums can still be a financial impediment to coverage.
- Despite progress in lowering the number of uninsured, many people are left out of the ACA’s coverage expansions. State decisions not to expand Medicaid have left over 3.7 million poor adults in the coverage gap. In addition, undocumented immigrants are ineligible for either Medicaid or Marketplace coverage. Without access to affordable insurance, these individual will likely continue to rely on safety net providers for care. While these providers have traditionally cared for the uninsured and other vulnerable, low-income populations, the funding they have relied on to finance this care is declining. In particular, cuts to the Medicare and Medicaid Disproportionate Share Hospital programs will, over time, dramatically reduce the financial support for indigent care. Providers, especially in states that do not expand Medicaid where the uninsured will be increasingly concentrated, will feel the financial squeeze of the continued demand for care and more limited financing to support that care.
The ACA remains a work in progress and a subject of sharp partisan disagreement. The individual market has been reformed, the long-standing barrier to Medicaid coverage for adults without dependent children has been removed in many but not all states, new health insurance Marketplaces are in place, and the ranks of the uninsured have been significantly reduced, while significant legal political and implementation challenges remain.