Summary:
- Before the ACA, insurance companies could deny coverage for pre-existing conditions, impose lifetime limits, and offer low-quality plans, leaving many Americans uninsured or underprotected.
- The ACA expanded access to healthcare through Medicaid expansion, premium tax credits, and new consumer protections that require comprehensive coverage and prevent discriminatory practices.
- Despite major gains, rising premiums, expiring subsidies, and policy decisions—especially in states like North Carolina—threaten affordability and access, underscoring the need for continued reform.
The Affordable Care Act was a sweeping law passed in March 2010 that significantly improved the healthcare market for American consumers. Healthcare is still too expensive for many Americans and healthcare costs worry two-thirds of us. Navigating medical care and medical insurance is still frustrating. But it was worse before 2010: without the ACA, we wouldn’t have minimum essential coverage requirements and millions upon millions of Americans wouldn’t have any insurance at all.
Here’s where we’ve been, where we are, and where we should go next.
The World Before the ACA
Before the passage of the Affordable Care Act, companies were allowed to establish annual and lifetime limits on how much help they’d provide you for all kinds of care. There were no minimum services they were required to provide, and there were lots of junk plans with high deductibles, low coverage contributions, and lots of exemptions. People would routinely discover only when they needed care that their insurance didn’t cover it.
Moreover, insurers were allowed to deny coverage, increase costs, or drop you from your plan if you had “pre-existing conditions.” In some cases, this meant waiting for 6-12 months before you got any help with specific conditions, even though you were already paying your premiums. In others, it meant your insurer would review your medical records and, if they discovered any evidence of a relevant condition, make you pay them back for any treatment connected to that condition. Or, they might include fine print that simply excluded certain conditions from coverage, period.
The pre-ACA world also allowed companies to charge different prices to different people for the same product, included much stricter limits on Medicaid eligibility, making it harder for low-income people to find coverage, kicked children off their parents’ plans as soon as they became adults, and did not guarantee preventive care.
The ACA changed all that.
To help working households pay their insurance premiums, it established the Premium Tax Credit. This credit is available to households earning anywhere from 1X to 4X the Federal Poverty Level. For individuals, that means earning between $15,960 to $63,840; for a household of four, it means earning anywhere from $33,000 to $132,000. It allows qualifying individuals to have the government directly contribute to their healthcare premiums in advance or claim the credit as a refund on their taxes.
The ACA also expanded Medicaid eligibility for adults whose income is below 138% of the federal poverty level. People with low or no income on Medicaid receive free or low-cost healthcare. There was just one catch–states had to opt in. So far, 40 states and the District of Columbia have opted in; 10 states have not. North Carolina did not expand Medicaid coverage for low-income people between 19 and 64 until 2023. That Medicaid coverage has no fees and capped copays at $4. The federal government pays 90% of the expansion costs while hospital pay the remaining 10%. Over 670,000 North Carolinians took advantage of this new eligibility to gain healthcare, but the General Assembly included a trigger provision in the implementation bill that would scrap the entire program if the federal contribution rate drops.
The ACA Created New Guardrails
The law stops healthcare companies from limiting yearly or lifetime coverage for essential health benefits. They used to set annual and lifetime limits–maximum amounts of money they’d pay each year and over the course of your life. After you hit those limits, you had to pay 100% of every cost for the rest of the year (or the rest of your life). The ACA ensured that you’d have help paying for certain types of medical care, no matter how much of it you needed.
The ten types of care exempt from annual and lifetime limits are:
- Ambulatory care (outpatient services you get without hospital admission)
- Emergency services
- Hospitalization (like surgery or overnight stays)
- Pregnancy, maternity, and newborn care
- Mental health and substance use disorder services (including counseling and therapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (things that help you gain or recover mental or physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management (like screening tests
- Pediatric services, including oral and visual (oral and visual are not counted as essential adult services)
Plans also have to include birth control coverage and breastfeeding coverage.
Although prior to 2010, insurance companies had significant leeway to cancel your plan and demand refunds if you or your employer made a mistake on your paperwork, or if they discovered disqualifying medical history in your records that you did not declare, they can now terminate your coverage only if you do not pay your premiums or if you knowingly provide them with false information.
Ripple Effects From the ACA’s Passage
Patients who cannot afford care have generally depended on charity care. Roughly three-fifths, or 60% of all hospitals are registered non-profits. Federal law requires that they provide some level of charity care at no cost to eligible individuals. Although hospitals are required to have charity care policies, many patients do not get clear, proactive explanations of charity care and their own eligibility. Thanks to the Affordable Care Act, more patients of all income levels now have insurance, and every consumer can find plans on the public marketplace that cover a broader range of procedures than was once true. That means hospitals are spending less on charity care.
The ACA also accomplished a significant, but little-known change: it nationalized student loans. Prior to the ACA, the federal government backed loans issued by private banks. Prior to the ACA’s passage, the federal government partnered with private lenders to issue educational loans in a program known as FFEL (the Federal Family Educational Loan Program). The FFEL program charged a high rate of subsidy to the federal government, ultimately diverting billions of dollars from other public benefits into service fees.
Where To From Here?
North Carolina Governor Josh Stein (D) recently announced $213 million in funding that will increase access to health care for more than 3 million rural North Carolinians visiting more than 400 different facilities across North Carolina. This follows an announcement from North Carolina Commissioner of Insurance Mike Causey (R) that premiums on ACA healthcare plans would increase by 30%. The Commissioner cited the expiration of federal subsidies–which Congressional Republicans were unwilling to extend–as one of the main factors for that increase. As a result of these premium hikes and the expiring federal subsidies, several hundred thousand North Carolinians will miss out on health insurance. To prevent this, the state must pass a budget that protects the right to affordable healthcare for all North Carolinians.
The American healthcare system is the most expensive in the world. Our utilization rates are lower than those in comparably wealthy countries, and our prices are higher. That means our costs aren’t high because we provide better care, or provide it to more people. They’re high because we charge more for people to get less. The Affordable Care Act made huge strides toward improving this situation. Now, federal and state legislative policies threaten to subsidize lavish lifestyles for the wealthy by depriving millions of Americans of access to basic necessities like healthcare. We can do better!
