Celebrating the 10th Anniversary of the Affordable Healthcare Act

On March 23, 2010, the Patient Protection and Affordable Care Act also known as the Affordable Care Act, the ACA, and Obamacare was signed into law by President Barak Obama in response to the crisis state of American health care.  Together with the Health Care and Education Reconciliation Act of 2010 amendment, it is the most significant regulatory overhaul and expansion of coverage since President Johnson created Medicare and Medicaid as part of his Great Society in 1965.

Before the 1930s, most Americans paid for medical care out of their own pockets.  Some industries like mining, steel, and railroads had industrial clinics or company doctors due to their dangerous nature and these were the beginnings of businesses becoming involved in their employees’ well-being.  President Franklin Roosevelt promoted universal healthcare coverage but decided not to pursue it after his election and to push the Social Security Act instead.  The American Medical Association opposed the idea of universal coverage in the 1930s.

In later decades they also strongly opposed the creation of Medicare and Medicaid as well as opposing the Clinton plan and the PPACA.

When the United States entered WW II, there was great concern that rampant inflation would both threaten the military effort as well as undermine the domestic economy like what had occurred in Germany after WW I.  The 1942 Stabilization Act was passed to limit employers’ freedom to raise wages for scarce workers causing them to offer other benefits such as health insurance as incentives instead.  Workers benefitted as well because while health benefits were part of compensation they did not count as income and so created no additional tax burden.

The 1950s saw strong labor unions bargain for better benefit packages and healthcare coverage options expanded to include vision and dental care.  Employer-sponsored healthcare  had now become the cornerstone of the entire American healthcare system, but cost inflation left many retirees unable to afford private coverage.  President Lyndon Johnson successfully passed a Supplemental Social Security Amendment creating Medicare and Medicaid to address healthcare for retired employees as well as those in low-paying jobs not offering healthcare benefits.  As it became increasingly clear that healthcare reform was necessary, Sen. Ted Kennedy proposed a single-payer plan.  President Nixon had his own plan and it appeared healthcare reform would happen.  Watergate derailed the efforts and healthcare did not again appear on the national stage until Bill Clinton’s election in 1992.  With his wife, Hillary Clinton in charge, he promoted a plan that would require all Americans to enroll in a health policy that would be managed by regional purchasing cooperatives.  The plan died in Congress where it was considered too radical.  The next several decades saw ever-increasing healthcare costs leading to the rise of managed care and Health Maintenance Organizations (HMOs) were born.

Despite employer unhappiness with managed care options and continued rising costs, the proposed PPACA met with stiff opposition and ridicule. The major provision of the ACA came into force in 2014 and by 2016 between 20 and 24 million additional Americans had health insurance through a combination of Medicaid expansion and changes to the individual insurance market.  The new spending came through a combination of new taxes and cuts to Medicare provider rates and to Medicare Advantage.  The existing structure of Medicare, Medicaid and the employer market was essentially retained, but the individual market underwent a huge overhaul.  Insurers now had to accept all applicants without charging based on pre-existing conditions or demographic status.  Many people in the legislature and industry were concerned that insurers might be stuck with a large group of enrollees with chronic conditions while healthy individuals would forgo insurance, creating a “reverse selection process. the act mandated universal coverage or that the individual pay a fine and that all insurers cover a list of “essential health benefits”.

The Opposition did not end with the passage of the ACA and subsequent legal challenges have changed it considerably.  The Supreme Court in 2012 upheld Congress’s power to enact most provisions of the ACA, but also ruled that states could choose not to participate in the law’s Medicaid expansion. The federal health exchange, HealthCare.gov, faced a major technical rollout in 2013.  Polls initially found a plurality of Americans opposed the act while approving of many of the individual provisions such as eliminating “existing condition” surcharges and allowing parents to continue children on their insurance until age 16.  Donald Trump via the Tax Cuts and Jobs Act of 2017 rescinded the penalty enforcing the individual mandate effective 2019, but by that time the law had majority support among Americans.  Though it has been 10 years, Obamacare is still in its infancy.  While it remains to be seen what the long-term effects will be, there is little doubt that we are in a new chapter in America’s turbulent healthcare history.