Q&A: The ACA & Health Care Reform

The state of health care reform is a complex and sometimes confusing topic. This document is intended to provide the basics about the Affordable Care Act and what must take place in Congress in order to repeal, change or replace it.

Why was the ACA enacted?
The Affordable Care Act (ACA) is a law that was designed to:

  • Extend medical insurance coverage to more people
  • Improve access to health care
  • Improve the health of Americans
  • Decrease health care costs

How does the ACA work?
Certain provisions and mandates were put in place for the ACA to accomplish its goals, including the:

  • Provision of federal funds to expand eligibility for Medicaid
  • Creation of public marketplaces for individuals and small businesses for the purchase of medical insurance
  • Provision of income-based subsidies to help individuals buy coverage
  • Requirement of employers to offer medical insurance that meets the standards for coverage and affordability or pay a tax (e.g., coverage of essential health benefits, no lifetime and annual limits, no pre-existing condition exclusions)
  • Requirement of individuals to obtain medical insurance or pay a tax

Why does the ACA have subsidies and tax credits that reduce the cost of insurance?
To increase access to health insurance, the ACA put in place subsidies that increase as incomes decline and expanded Medicaid eligibility.

To defray subsidy costs, the ACA put in place various taxes and fees. These are paid by employers, consumers, health insurance companies, and manufacturers of brand-name prescription drugs and medical devices.

What are the arguments against the ACA?
A key concern is stabilization of health care premiums, plan benefits and insurance carriers, particularly in the individual market on the “Obamacare” Exchanges (otherwise known as the health insurance Marketplace).

Additionally, some Republicans contend that improved access and lowered costs are accomplished through free market access, not federal government regulation and increased taxes imposed by the ACA. They contend that the ACA hasn’t lowered costs or increased access to coverage in many states.

What was the first Republican effort to repeal the Affordable Care Act (ACA) under the Trump administration?
Following President Trump’s inauguration, one of the top items on the Republican legislative agenda was the repeal and replacement of the ACA. By early March 2017, the Republicans in the House Ways and Means and Energy and Commerce committees released proposed legislation called the American Health Care Act of 2017 (AHCA). This reconciliation bill was to be the first step in a multiphase process that would be followed by administrative actions and non-budgetary legislation. (See a summary published by the House Ways & Means Committee for the goals of the AHCA.)

On March 24, 2017, when it became clear that there were not enough votes for the AHCA to pass, House Republican leaders pulled it from the voting floor, effectively keeping the ACA the law of the land.

It remains to be seen if health care reform will be taken up again soon by either party and if there will be a bipartisan effort to create legislation on which both parties can agree. However, even if the ACA remains in place, Tom Price (Secretary of Health and Human Services) and Seema Verma (administrator of the Centers for Medicare and Medicaid Services) are able to make certain changes to healthcare policy without Congressional approval.

What steps generally need to be taken for a bill to become law?
A House or Senate bill is a legislative proposal that is submitted to Congress for review/approval. Here are the steps for such a bill to pass into law:

Step 1, A bill is introduced:
A legislator introduces a bill in either the House or the Senate.

Step 2, A chamber amends and approves the bill:
The appropriate committees mark up (amend) the bill and send it to the floor of the chamber of Congress (either House or Senate) for approval.

Step 3, The other chamber amends and approves the bill:
Once approved by one chamber, the bill may pass to the other chamber for consideration. The appropriate committee in that body marks up the bill and sends it to the floor for approval.

Step 4, A conference committee reconciles differing bills:
If the bills approved by the House and Senate are not identical, a conference committee consisting of members from each chamber meets to resolve the differences between the versions, then sends the resulting conference bill back to both bodies for adoption.

Step 5, Both chambers approve the reconciled bill:
Once identical legislation has been approved by the House and the Senate, it is submitted to the President of the United States.

Step 6, The President signs the bill into law:
The President approves the reconciled bill and it becomes a law.



Updated: March 28, 2017



The information contained in this document is neither intended nor implied to be legal or regulatory advice or counsel. It is provided for general informational purposes only and represents a summary based on publicly available sources. We make no representations about and assume no responsibility for the accuracy or completeness of information contained in this document and such information is subject to change without notice. Sources are available upon request.

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