You’ve heard about the Affordable Care Act, or “Obamacare.” But do you know what the act covers and how it came about? Get insights into this landmark health care law.
The history of the Affordable Care Act – The Patient Protection and Affordable Care Act was signed into law by President Obama on March 23, 2010. It is more commonly known as the Affordable Care Act (or ACA) — and it’s most commonly referred to by its nickname, Obamacare.
Because the law affects so many Americans, it’s helpful to understand what the ACA is and what is means for you and your family.
Obamacare Projections vs. Actuals
|2010 Exchange Enrollment Projections vs. Actuals|
|2014||8 million1||16.9 million1||8 million2|
|2015||13 million1||18.6 million1||11.7 million2|
|2016||21 million1||24.8 million1||12.7 million2|
|2017||Not forecasted||Not forecasted||10 million3|
1 Mercatus Center: http://mercatus.org/publication/downgrading-affordable-care-act-aca-unattractive-health-insurance-and-lower-enrollment
2 Kaiser Family Foundation: Assessing ACA Marketplace Enrollment http://kff.org/health-reform/issue-brief/assessing-aca-marketplace-enrollment/
3 CBO Forecast: The Budget and Economic Outlook:2017 to 2027
Key events leading up to the passage of Obamacare (The Affordable Care Act)
Next, follow the timeline of key events leading up to the passage of the Obamacare law, along with key provisions that went into place after the law was enacted.
- July 2009: Speaker of the House Nancy Pelosi and a group of Democrats from the House of Representatives reveal their plan for overhauling the health-care system. It’s called H.R. 3962, the Affordable Health Care for America Act.
- August 25, 2009: Massachusetts senator Ted Kennedy, a leading supporter of health-care reform, dies and puts the Senate Democrats’ 60-seat supermajority required to pass a piece of legislation at risk.
- September 24, 2009: Democrat Paul Kirk is appointed interim senator from Massachusetts, which temporarily restores the Democrats’ filibuster-proof 60th vote.
- November 7, 2009: In the House of Representatives, 219 Democrats and one Republican vote for the Affordable Health Care for America Act, and 39 Democrats and 176 Republicans vote against it.
- December 24, 2009: In the Senate, 60 Democrats vote for the Senate’s version of the bill, called America’s Healthy Future Act, whose lead author is senator Max Baucus of California. Thirty-nine Republicans vote against the bill, and one Republican senator, Jim Bunning, does not vote.
- January 2010: In the Senate, Scott Brown, a Republican, wins the special election in Massachusetts to finish out the remaining term of US senator Ted Kennedy, a Democrat. Brown campaigned heavily against the health-care law and won an upset victory in a state that consistently votes in favor of the Democratic party.
- In January 2010, eHealth published research conducted by Opinion Research highlighting public perceptions of health-care reform.
- March 11, 2010: Now lacking the 60th vote needed to pass the bill, Senate Democrats decide to use budget reconciliation in order to get to one bill approved by the House and the Senate. The use of budget reconciliation only requires 51 Senators to vote in favor of the bill in order for it to go to the president’s desk for signature.
- March 21, 2010: The Senate’s version of the health-care plan is approved by the House in a 219-212 vote. All Republicans and 34 Democrats vote against the plan.
- March 23, 2010: President Obama signs the Affordable Care Act into law.
Changes Required by the Affordable Care Act Immediately
- March 23, 2010:Grandfathered health plans: Anyone who had an individually purchased health insurance plan in place had a health insurance plan with “grandfathered status,” which meant that, by-in-large, the plan could stay the same as long as their insurer continued to offer that plan.
- March 23, 2010:Non-grandfathered health plans: Anyone who bought a health insurance plan after March 23, 2010 would eventually have to enroll in a new plan that met all of the new standards of the Affordable Care Act. The original deadline for this transition was January 1, 2014 or on a plan’s renewal date within the 2014 plan year.
- On April 7, 2010: eHealth publishes a list of FAQs and tips for consumers and small business owners who buy their own health insurance.
Changes Required by the Affordable Care Act After 90 Days
- June 23, 2010:
- Small business tax credits:For certain small businesses, there are tax credits of up to 35% of premiums.
- Access to the federal high-risk pool for the uninsured with pre-existing conditions:There are $5 billion allocated for individuals who cannot qualify for insurance. These funds allow them to buy insurance from the government; but, this coverage is not free.
- Reinsurance for retiree health benefit plans:This is a temporary reinsurance program that provides reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees.
- July 1, 2010:
- Pre-Existing Condition Insurance Plan (PCIP): This program is designed to make health insurance available to those that have been denied coverage by private insurance companies because of a pre-existing condition.1 Forbes Report: Obamacare’s High-Risk Pool Spending Doubles Government Estimates (http://www.forbes.com/sites/theapothecary/2012/02/25/report-obamacares-high-risk-pool-spending-doubles-government-estimates/#8f7db334a6e5)
|Pre-Existing Condition Insurance Plans||Projections||Actual|
|2010: Medicare Actuary||375,000 enrollments1||48,8791
|By 2013: Congressional Budget Office||
Cost Per Enrollee
- 1 Forbes Report: Obamacare’s High-Risk Pool Spending Doubles Government Estimates (http://www.forbes.com/sites/theapothecary/2012/02/25/report-obamacares-high-risk-pool-spending-doubles-government-estimates/#8f7db334a6e5)
- 2 Congressional Budget Office response to a request for additional information about the provisions of the Patient Protection and Affordable Care Act (http://cbo.gov/sites/default/files/cbofiles/ftpdocs/115xx/doc11572/06-21-high-risk_insurance_pools.pdf)
- 3 Report from the National Conference of State Legislators (http://www.ncsl.org/research/health/high-risk-pools-for-health-coverage.aspx)
- 2012 Actual Enrollments: April of 2012 Data from the Department of Health and Human Services found, 56,257 individuals with pre-existing conditions enrolled in Pre-Existing Condition Insurance Plans (PCIPs) established under Obamacare.
- According to the HHS report: PCIP enrollees suffered from serious, but relatively common, ailments: cancer (27 percent of total spending), cardiovascular disease (19 percent), rehabilitative care (18 percent), and degenerative joint diseases such as arthritis (14 percent).
- September 14, 2010: eHealth publishes a list of FAQs, which includes a following timeline for the enactment of key changes. Bear in mind that some of these components changed during the ACA’s implementation.
Changes Required by the Affordable Care Act After 180 Days
- September 23, 2010 (Within six months of the ACA’s enactment):
- Closing the coverage gap in Medicare Part D (prescription drug coverage): Seniors are entitled to receive a $250 rebate to close the coverage gap.
- Health insurance consumer information: A government website is created to allow people to search for information about health insurance companies, available plans, and so on.
- No pre-existing conditions coverage exclusions for children:The law indicates that insurers are not permitted to exclude pre-existing conditions from coverage.
- October 19, 2010: eHealth publishes its first in a series of resources to help uninsured children navigate differences in individual states.
Changes Required by the Affordable Care Act in 2011
- Patient protections for all new plans: This provision protects patients’ choice of doctors by allowing plan members to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an obstetrician/gynecologist (ob/gyn), and ensuring access to emergency care.
- Extension of dependent coverage for young adults: Young adults can stay on their parents’ insurance until age 26, even if they are not full-time students. This extension applies to all new plans.
- “First-dollar” prevention benefits: All new health insurance policies must cover preventive care and pay a portion of all preventive care visits.
- No lifetime limits on coverage: This eliminates any maximum dollar amount that a health insurance company agrees to pay on behalf of a member for covered services during the course of his or her lifetime.
- Restricted annual limits on coverage: This eliminates any limits or maximum payouts from the health insurance company.
- Prohibits rescission: The ACA prohibits rescission when a claim is filed, except in the case of fraud or misrepresentation by the consumer.
- Appeals process: When a consumer has a problem with his or her coverage, the insurance company must provide a process for customers to make an appeal.
NOTE: In January, 2011: eHealth publishes 11 guides on the top child-only health insurance coverage that examined differences in implementation in numerous states.
Changes Required by the Affordable Care Act in 2014
- October 1, 2013: Health insurance exchanges scheduled to open for 2014 enrollment: Begin writing policies that go into effect January 1 of the coming year.
- January 2014: Federal subsidies for health insurance coverage: People buying insurance on their own get subsidies to help them pay their monthly insurance premiums. Premiums are allocated on a sliding scale, as determined by income. Any individual earning over 400% of the poverty level ($43,320 in 2009) doesn’t qualify for subsidies.
- January 2014: Small business tax credits: When health insurance exchanges are operational, tax credits are up to 50% of premiums.
- January 2014: No restrictions on pre-existing conditions: Insurance companies are required to provide health insurance to any adult aged 19 to 64 who applies for coverage.
- January 2014: Requirement to buy health insurance: To prevent people from waiting until they get sick to buy health insurance, the ACA requires all Americans to buy health insurance or pay a fine. The fine starts at $95 for an individual in 2014 and goes up each year until 2016, when the fine is the largest of the following two:$695 or 2.5% of a person’s annual income.
- January 2014: High-Risk Insurance Pools Expire: Pre-Existing Condition Insurance Plans (PCIPs), established in 2010 are scheduled to expire on January 1, 2014 once all of the major ACA reforms were in effect.
Actual Events That Occurred As A Result of the Affordable Care Act – 2011 to 2014
- January, 2011: Medical Loss Ratio Requirements: In 2011, insurance companies must ensure the value for premium payments. If insurance companies don’t spend at least 80% to 85% of premiums on care (for individual, small group markets and large group) the difference is sent to customers in a refund.
- January 2011: A Florida judge rules that elements of the Affordable Care Act are unconstitutional.
- November 14, 2011: The US Supreme Court agrees to hear arguments in the Obamacare case brought by 26 states and the National Federation of Independent Business. It argues that elements of the Affordable Care Act are unconstitutional.
- June 28, 2012: The US Supreme Court upholds the major provisions of the Affordable Care Act.
- August 2012: The White House confirms the ACA’s “contraceptive mandate” for women’s preventive services without cost-sharing: HIV screening, contraception counseling, and domestic violence support services.
- November 6, 2012: President Obama is re-elected, effectively ensuring the ACA will survive.
- January 2013: The limit on pre-tax contributions to flex spending accounts is capped at $2,500 annually.
- July 2, 2013: The White House agrees to a one-year delay for large businesses to provide workers with affordable health care.
- October 1, 2013: Healthcare.gov, the federal exchange serving 36 states, experiences technical difficulties and eventually goes offline before reopening on December 2, 2013.
- October 1, 2013: Several state-run exchanges experience enrollment hurdles, including the exchanges in California, Oregon, Washington, and Maryland. Ultimately, some perform better than others.
- October, 2013: Republicans led by Senator Ted Cruz shut down the US federal government and curtail most routine operations after Congress fails to enact legislation appropriating funds for fiscal year 2014 or to enact a continuing resolution for the interim authorization of appropriations for fiscal year 2014.
- October 17, 2013: Regular government operations resume after an interim appropriations bill is signed into law.
- November 26, 2013: Eight Senate Democrats tell the Obama administration that they’re “troubled by the ongoing technical difficulties” with healthcare.gov and want an alternative way for insurers and web-based brokers to enroll subsidy-eligible consumers.
- December 2, 2013: Healthcare.gov, the federal exchange serving 36 states, reopens after experiencing technical difficulties and eventually going offline for several weeks.
- January 1, 2014: The bulk of remaining regulatory changes in the Affordable Care Act go into effect.
- January, 2014: Medical Loss Ratio Requirements: Health Affairs published its most recent analysis of Medical Loss Ratio performance by major insurers.
- March 6, 2014: The federal government extends the two-year grace period for individuals enrolled in non-grandfathered health insurance plans.
- May 1, 2014: The US Department of Health and Human Services announces that more than 8 million people enrolled in a health insurance plan during the first Open Enrollment Period (OEP).
- March 4, 2015 – King v. Burwell: The U.S. Supreme Court (SCOTUS) hears oral arguments for King v. Burwell, a lawsuit challenging U.S. Treasury regulation, 26 C.F.R. § 1.36B-2(a)(1), issued under the Patient Protection and Affordable Care Act (ACA). King argues that the ACA only allows subsidies to be distributed through state-run exchanges, and that regulations implemented by the IRS exceed the authority granted to it by Congress. (Read eHealth’s white paper on King vs. Burwell.)
- June 25, 2015 – King v. Burwell: The Supreme Court ruled 6-3 that subsidies could be distributed through Healthcare.gov, the Federal Exchange, if a state did not set up its own exchange.
- January 1, 2016: The threshold for itemizing medical expenses on taxes increases from 7.5% to 10% for seniors.
- May 12, 2016: U.S. District Judge Rosemary Collyer ruled that the ACA’s cost-sharing reduction (CSRs) subsidies, which pay a portion of an enrollee’s deductibles, do not have permanent funding in the legislation. This makes them subject to appropriations, which means they must be approved by the Congress. The ruling was placed on hold, pending an appeal.
- Tuesday, November 8, 2016: Donald Trump is elected to be the next president of the United States.
- November 20, 2016: Vice President-elect, Mike Pence, says “President-elect Donald Trump will prioritize repealing President Barack Obama’s landmark health care law right “out of the gate” once he takes office.
- March 6, 2017: House Republican announce their intent to “repeal and replace” the ACA with the American Health Care Act. The Senate decided to write their own version of the bill, rather than vote on the American Health Care Act. Neither bill passed, nor did any of the subsequent bills for comprehensively repealing the ACA in 2017.
- October 12, 2017: The federal government announces that it will no longer fund cost-sharing reduction (CSR) payments. Insurance companies are still required under the ACA to offer reduced cost sharing to low income customers, but it will have to come out of their own pockets. This does not affect the other government subsidies called advance premium tax credits (APTC), which are available directly to qualifying consumers at certain income levels for help in paying monthly premiums, so qualifying consumers can still buy ACA plans using government subsidies.
- November 1, 2017: Open enrollment starts and it is only six weeks long, ending on December 15, 2017 for most states. In previous years the open enrollment was three months long, running from November 1 to January 31 in most states.
- December 20, 2017: GOP’s tax bill passes. The tax penalty associated with the individual mandate is repealed. The IRS will stop charging the tax penalty for not having a qualifying health insurance plan. However, the repeal is only effective starting in 2019, so Americans can still face a tax penalty if they do not maintain qualifying health insurance in 2018.
- January 5, 2018: Governor C.L. Otter signs an executive order instructing Idaho’s insurance director to use flexibility when developing guidelines for Idaho health insurance carriers. The Governor states “Idaho families have been forced to buy products that are too expensive and loaded with benefits they don’t want or need”—this executive order allows insurance companies to provide plans with skimpier benefits, but lower prices, which could help people afford health insurance. Although at this time the ACA is still in effect, this executive order defies regulations outlined by the ACA.
- February 2018: In response to Governor Otter’s executive order to loosen ACA’s grip on health insurance guidelines in Idaho, Idaho Blue Cross announces its “Freedom Blue” plans that break with the federal requirements for health insurance under the ACA.
Obamacare Key Metrics
|Subject||2010 Projected||2016 Actual|
| Exchange Enrollees without subsidies
|Spending on Subsidies in 2016
|$59 billion3||$56 billion3|
(CBO by 2016)
(Kaiser Family Foundation 2016)
|20.3% in 2012||11.5% in 2016|
|Old Way:||12.5% uninsured|
1 New York Times, 3/21/2010: (http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?_r=0)
2 HHS: HEALTH INSURANCE MARKETPLACES 2016 OPEN ENROLLMENT PERIOD: JANUARY ENROLLMENT REPORT https://aspe.hhs.gov/health-insurance-marketplaces-2016-open-enrollment-period-january-enrollment-report
3 Motley Fool, 2/29/2016: http://www.fool.com/investing/general/2016/02/29/5-obamacare-stats-that-will-blow-you-away.aspx
4 U.S. Senate Policy Papers: http://www.rpc.senate.gov/policy-papers/more-than-47-million-health-insurance_cancellations-in-32-states
5 LA Times, Obamacare doctor networks to stay limited in 2015: http://www.latimes.com/business/la-fi-0928-obamacare-doctors-20140928-story.html
5 Wall Street Journal: “UnitedHealth Culls Doctors from Medicare Advantage Plans,” 2013, http://online.wsj.com/news/articles/SB10001424052702303559504579200190614501838
6 Kaiser Health News: Assessing ACA Marketplace Enrollment http://kff.org/private-insurance/issue-brief/assessing-aca-marketplace-enrollment/
7 CBO: Estimating the Budgetary Effects of the Affordable Care Act: https://www.cbo.gov/publication/45447
8 California Healthline: Obama Administration Further Delays Employer Mandate http://californiahealthline.org/morning-breakout/obama-administration-further-delays-acas-employer-mandate/
9 eHealth Cost & Benefits Report 2013: Average Monthly Health Insurance Premiums: http://news.ehealthinsurance.com/_ir/68/201311/eHealth%202013%20Cost%20and%20Benefits%20Report.pdf
10 eHealth Price Index Report – 2016: Average Monthly Health Insurance Premiums
11 eUnderstanding Participation Rates In Medicaid (https://aspe.hhs.gov/system/files/pdf/76411/ib.pdf)
What the ACA means for you
The Affordable Care Act is perhaps the greatest overhaul of the US health-care system, and it will provide coverage for over 94% of Americans. In addition, one of its key reforms includes health coverage for adults with pre-existing conditions, which generally hadn’t been available up until now.
These great changes in health-care insurance can benefit you and your loved ones, and this is why it’s important for you to become familiar with the history of the Affordable Care Act.
To learn about the specific Obamacare-compliant health insurance plan options available to you—plus see if you’re eligible for a government subsidy to help pay for a plan—get started on the eHealth site.
To understand the history of the Affordable Care Act, it’s also helpful to review how a bill becomes a law in the United States government.
How a bill becomes law
Congress is made up of two houses, the 435-member House of Representatives and the 100-member Senate. For a bill to become law, both houses typically need to vote on and pass the same bill. Once both houses pass a bill, the US president signs it, and the bill becomes law.
There are typically five steps for a bill to become law:
- Step 1: A simple majority – 218 of the 435 members of the House of Representatives – vote to pass their version of a bill.
- Step 2: A two-thirds majority – 60 of 100 Senators – vote to pass their version of a bill.
- Step 3: Both houses of Congress have a conference to create one revised version of the bill on which both houses agree.
- Step 4: A simple majority of both houses of Congress vote a second time to pass the revised version of the bill on which they both agree.
- Step 5: The president signs the bill into law.
Why the ACA was different
What makes the history of the Affordable Care Act different is that steps three and four (described above) did not take place in the traditional fashion.
Instead, the following happened prior to passing the Affordable Care Act:
- Budget reconciliation: The Senate used a process called budget reconciliation, to get their version of the bill, which was created by lawmakers, as a way to bring down the deficit by easing the path for budget and tax deals.
- Simple majority and no filibusters: With budget reconciliation, the Senate only needs 51 votes (instead of 60) to pass a piece of legislation. Debate on an issue in a bill is limited to 20 hours, and – most importantly – no Senate filibusters are allowed.
A filibuster is typically a process in the US Senate that allows one party to delay or entirely prevent a vote on a bill. Presently, the only way to end a filibuster is to get 60 Senators to vote to break a filibuster.