ACA Basics and Background

Overview

The Affordable Care Act (ACA) is the nation’s health reform law enacted in March 2010. This page provides an introduction to the law. Below are frequently asked questions about the Affordable Care Act and links to useful resources created by APHA and other organizations. Find more information about specific health reform topics on other pages in this section.

 

Key resources
(See full list of resources
below)

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Public health professionals: Looking for resources to help you educate your community about the Marketplaces and other ACA reforms?

Consumers: Looking for information about how the ACA will affect you?

Go back to the main page of the health reform section of APHA's website for resources and links to the official websites of the ACA and the Health Insurance Marketplaces.

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Other frequently asked questions

1. What is the Affordable Care Act?

2.  What are the major components of the ACA?

3. Why do we need the ACA?

4. How many people is the ACA expected to cover?

5. When do the different provisions of the ACA go into effect?

6.  How can I educate the public about the benefits of the ACA?

7. How much is the ACA expected to cost?

8. What is the Medicaid expansion and why is it important?

9. What is the Health Insurance Marketplace and why is it important?

10. What is the minimum coverage provision (individual mandate) and why is it important?

1. What is the Affordable Care Act?
The Affordable Care Act is the nation’s health reform law enacted in March 2010. It contains numerous provisions that will expand health coverage to 25 million Americans, increase benefits and lower costs for consumers, provide new funding for public health and prevention, bolster our health care and public health workforce and infrastructure, foster innovation and quality in our system, and more.

The law consists of two pieces of legislation: the Patient Protection and Affordable Care Act (PPACA), enacted on March 23, 2010, and the Health Care and Education Reconciliation Act (HCERA), enacted on March 30, 2010. Jointly they are referred to as the Affordable Care Act or ACA. For more information, including links to the text and summaries of the law, see the resources listed below. (FAQ top)

2. What are the major components of the ACA?
The ACA aims to reform both our private and public health insurance systems, in order to expand coverage to 25 million Americans by 2023. It is also intended to lower costs and increase benefits for consumers, and to incentivize quality and innovation in our health care system. In addition, the ACA includes critical funding for public health and prevention. 

3. Why do we need the ACA?
There are numerous reasons health reform is critically needed in the U.S., including the following. For more details on each point, see APHA's one-pager, Why Do We Need the Affordable Care Act?

  • High uninsured rate: In May 2013, the CBO estimated that 57 million Americans under the age of 65 are currently uninsured; representing 1 out of 5 Americans in that age group. Without the ACA, the uninsured rate would continue to rise.
  • Unsustainable spending: Health care spending represented 17.9 percent of our gross domestic product (GDP) in 2011.
  • Lack of emphasis on prevention: Today, seven in ten deaths in the U.S. are related to preventable diseases such as obesity, diabetes, high blood pressure, heart disease, and cancer, and 75 percent of our health care dollars are spent treating such diseases. However, only three cents of each health care dollar spent in the U.S. go toward prevention.
  • Poor health outcomes: The U.S. spends far more on medical care than any other industrialized nation, but ranks 26th among 36 OECD countries in terms of life expectancy.
  • Health disparities: While inequities related to income and access to coverage exist across demographic lines, population-based disparities are impossible to deny. As reported by Families USA,“African-American women have the highest death rates from heart disease, breast and lung cancer, stroke, and pregnancy among women of all racial and ethnic backgrounds” and “Hispanics had poorer quality of care than non-Hispanic whites for about 40 percent of quality measures, including not receiving screening for cancer or cardiovascular risk factors.”

The ACA won’t solve all of these problems overnight, but it’s an important step forward. By making health coverage more affordable and accessible and thus increasing the number of Americans with coverage, by funding community-based public health and prevention programs, and by supporting research and tracking on key health measures, the ACA can help begin to reduce disparities, improve access to preventive care, improve health outcomes and reduce the nation’s health spending. For more information, see APHA's chart, Affordable Care Act Overview: Selected Provisions, or one of the resources listed below. (FAQ top)

4. How many people is the ACA expected to cover?
In May 2013, the Congressional Budget Office (CBO) released updated projections of the ACA’s coverage impacts. The CBO estimates that without the ACA, 56 million people would be uninsured in 2023, but under the ACA, 25 million of the uninsured will gain coverage by then. The CBO's estimates account for the 2012 Supreme Court decision making the ACA Medicaid expansion effectively optional for states. For more information, see the resources listed below. (FAQ top)

5. When do the different provisions of the ACA go into effect?
Many ACA provisions went into effect immediately or soon after the health reform law was enacted in 2010; others are being phased in over time. Several major reforms, including the Medicaid expansion, new coverage purchased via the Health Insurance Marketplace, and the minimum coverage provision (“individual mandate”) go into effect in 2014, and still others will go into effect later. Visit our ACA implementation page for links to implementation timelines, information on federal rulemaking and state progress implementing the ACA, and more. (FAQ top)

6. How can I educate the public about the benefits of the ACA?
There are numerous ways that the ACA will benefit specific populations such as children and parents, childless adults, the elderly, women, low-income individuals and families, LGBT individuals and families, racial and ethnic minorities, and others. The ACA will also benefit small businesses, health care providers, and states, and it contains important public health provisions such as the Prevention and Public Health Fund

Resources you can use to educate the public include The Affordable Care Act's Health Insurance Marketplace: Consumer Education Resources for Public Health Practitioners (PDF, updated October 2013); other APHA fact sheets, issue briefs, webinars and our ACA presentation slide deck; and more resources listed below. (FAQ top)

7. How much is the ACA expected to cost?
The Affordable Care Act includes a number of coverage and other provisions that will require more government spending, but these costs are offset by other ACA provisions that will either bring new revenue into the government, or decrease current spending. As of May 2013, the CBO predicts that the budgetary impact of the ACA’s coverage provisions will be $1,363 billion over 2014-23. In the same May 2013 repot, the CBO notes,  "Taking the coverage provisions and other provisions together, CBO and JCT have estimated that the ACA will reduce deficits over the next 10 years and in the subsequent decade." For more information, see the resources listed below. (FAQ top)

8. What is the Medicaid expansion and why is it important?
Medicaid is the nation's health insurance program for low-income individuals and families. The ACA calls for a nationwide expansion of Medicaid eligibility, set to begin in 2014. As the law was written, nearly all U.S. citizens under 65 with family incomes up to 133 percent of the federal poverty level (FPL) ($31,322 for a family of four in 2013) will now qualify for Medicaid. (About FPL; Is it 133 or 138?) This expansion will particularly benefit childless adults, who in more than 40 states cannot currently qualify for Medicaid regardless of their income level. It will also benefit low income parents, who in more than 30 states don't currently qualify even if their children do.

The Medicaid expansion was one of the major provisions at stake in the ACA cases decided by the Supreme Court in June 2012. The Supreme Court upheld the Medicaid expansion, but limited the federal government’s ability to penalize states that don’t comply. Therefore, where it was originally effectively mandatory for states to expand Medicaid, now it is effectively optional. While some states might not participate in the expansion, given the recent Supreme Court decision, most states are predicted to eventually expand their programs. The CBO predicts that 13 million Americans will gain coverage by 2023 through this provision.

For more information, including background on the Medicaid program and an explanation of the income thresholds, see our Medicaid Expansion and Supreme Court pages, and the links below (FAQ top)

9. What is the Health Insurance Marketplace and why is it important?
The ACA’s Health Insurance Marketplace gives individuals and families a new option to purchase heath insurance. There is also a marketplace for small businesses. The marketplace opened in October 2013, and coverage purchased through the marketplace begins as early as January 2014.

States had three options regarding the creation of their marketplaces: to establish their own state-based marketplaces (SBMs), to defer to a federally-faciliated marketplace (FFM), or to establish a marketplace in partnership with the federal government. The Kaiser Family Foundation offers a list and map of which states have opted for which model.

The marketplaces will be most useful for consumers who don’t have access to employer-based coverage, and who don’t qualify for public programs like Medicaid. Individuals and families with incomes between 100 percent and 400 percent of the federal poverty level ($23,550-$94,200 for a family of four in 2013) will receive income-based subsidies to help them afford coverage, and small businesses will also receive tax credits to help them afford coverage for their employees. By 2023, the Congressional Budget Office estimates that 24 million Americans will have coverage through the marketplaces. For more information, see our Exchanges page or the links below. (FAQ top)

10. What is the minimum coverage provision (individual mandate) and why is it so important?
Starting in 2014, the minimum coverage provision will require most U.S. citizens and legal residents to obtain and maintain coverage for themselves and their dependents, or to pay a small penalty. People will be able to opt out if they qualify for one of numerous exemptions. For information about which types of coverage count, who is exempted, and what the penalty will be, see our Minimum Coverage Provision page.

Most people will not directly be affected by the minimum coverage provision,
because they already have employer-based coverage, public coverage such as Medicaid, or other coverage that meets the minimum coverage requirement; or because they are exempt. A March 2012 analysis by the Urban Institute found that of the nearly 270 million non-elderly individuals in the U.S., only 7 percent would “face a requirement to newly purchase insurance or pay a fine.” (Read more.)

While the minimum coverage provision would directly affect only a small percentage of the population, it is an important part of the health reform law. It will make many other ACA provisions possible, by ensuring that insurance markets stay balanced and costs stay low. In June 2012, the Supreme Court upheld the provision as constitutional. For more information, see our Minimum Coverage Provision page, our Supreme Court Decision page, or the links below. (FAQ top)

Additional resources
Including key resources listed above. Note: certain specific resources are listed here. For ACA websites and webpages in general, visit our Useful Links page. For resources on other topics, visit the other pages in this section of APHA's website. (FAQ top)

Text of the law

Overviews and summaries of ACA provisions

ACA FAQs, glossaries, myths and facts

Educating consumers about the ACA

Coverage and cost data
(Also see FAQ above:
Why we need the ACA; ACA coverage estimates; ACA cost estimates)

For more information, visit our Useful Links page.

APHA is continuing to update its health reform website and resources. Please check back as we add new content.

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Updated 11/15/2013.