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JAMA Forum Archive, 2012-2019: Health policy commentary from leaders in the field
JAMA Forum

How Well Is the Affordable Care Act Working?

The American people are still divided in their views of the Affordable Care Act (ACA), which is perhaps not surprising given how partisan the debate has been and the fundamental ideological differences in the country about the appropriate role for government in health care, as in other spheres. There are legitimate differences of opinion about the law, just as there are about any important policy issue.

Larry Levitt, MPP

But the politics of the ACA often get confused with the question of whether the law is working as intended, whatever one may think of the wisdom of those intentions. That is largely a factual question, though facts about the ACA are often blurred when looked at through ideologically tinted lenses.

To be sure, there is still plenty that remains unknown about the ACA, and it will take years for the law to fully play out and to get a complete evidence-based reckoning of how it is working. Here, though, is my initial take on how well the ACA is accomplishing so far what it set out to do:

1. Creating an easy online process for people to get information about their health insurance options and sign up.

A centerpiece of the ACA was the creation of new health insurance exchanges (now called marketplaces) that would allow people to compare plans and easily apply for coverage and income-based financial assistance online. This, needless to say, did not go quite as planned. Most states decided not to set up marketplaces, leaving it to the federal government. Healthcare.gov, the online home for the federal marketplace, was largely nonfunctional when open enrollment began last October.

It was subsequently fixed in a widely-publicized “tech surge,” yet challenges still remain. For example, many people had information on their applications that was inconsistent with what was shown in government databases, and the process for resolving those inconsistencies has been slow. State-operated marketplaces were a mixed bag, with some (eg, California, Kentucky, Connecticut, Washington, Rhode Island) working reasonably well by most accounts, and others facing significant technological problems (eg, Oregon, Hawaii, Maryland, Massachusetts). However, even with these technological missteps, 8 million people signed up for a marketplace plan by the end of the open enrollment period, beating expectations (with at least 80% of them likely having paid their first month’s premium and actually enrolling). And, an estimated 6 million more people are enrolled in Medicaid since the third quarter of last year.

2. Making insurance more accessible.

One complaint with the individual insurance market that the ACA sought to address was discrimination against people with preexisting health conditions, who previously were either denied coverage altogether or charged higher premiums. People with expensive illnesses still face some access challenges—for example, very high out-of-pocket costs for certain specialty drugs—but in general, individuals with preexisting conditions now have no trouble getting access to insurance and they pay the same premiums as people who are healthy. This is significant because about half (49%) of adults younger than 65 years say they or someone in their household has a preexisting condition.

3. Making insurance more affordable.

This is perhaps the hardest of the ACA’s aims to sort out. In part, there is no easy answer because the effect varies so much, depending on individual circumstances. The preponderance of the evidence, however, suggests that insurance is now more affordable on average than it was before the ACA’s implementation:

  • Limits on the share of premiums that insurers can devote to administrative costs and profits have led to rebates for consumers and businesses and lower premiums than would have otherwise been the case.

  • Although there was much controversy last fall about people who experienced cancellation of individual insurance policies that didn’t include services defined by the ACA as essential or excluded people with preexisting conditions, and who then saw their premiums increase under the ACA, a recent Kaiser Family Foundation (KFF) survey of people in the individual insurance market shows that just as many people who switched to ACA-compliant plans saw their premiums decrease.

  • New federal data shows that 87% of the people signing up for coverage in the federal marketplace qualify for income-based premium subsidies that lower their average premium from $346 per month to $82, a reduction of 76%.

4. Reducing the number of Americans who are uninsured.

This is perhaps the ultimate test of whether the ACA is working as intended: Is it significantly diminishing the 48 million Americans who were previously uninsured? It will be quite some time before we have the results of large federal surveys that can be used to measure changes in the number of people uninsured. And projections from the Congressional Budget Office suggest that it will take several years for the full effects of the ACA on insurance coverage to ramp up.

But we are already starting to see signs of a decreasing number of uninsured individuals. A large tracking poll from Gallup shows that the percentage of adults who say they are uninsured is down from 17.1% in the fourth quarter of 2013 to 13.4% today. Earlier surveys from the Urban Institute and RAND also show declines. And the recent Kaiser Family Foundation individual insurance market survey shows that nearly 6 in 10 of those enrolling in health insurance marketplaces were previously uninsured.

For years we've debated the ACA based on hypotheticals and spin. Now, as the law is being implemented, facts are starting to enter the discussion, and that’s a welcome development. Of course, because the ACA—like any complex law—has both losers and winners, it will no doubt continue to remain controversial for the foreseeable future, even if it accomplishes what it’s supposed to.

About the author: Larry Levitt, MPP, is Senior Vice President for Special Initiatives at the Kaiser Family Foundation and Senior Advisor to the President of the Foundation. Among other duties, he is Co-Executive Director of the Kaiser Initiative on Health Reform and Private Insurance.