The Key Word for Health Care Reform: “Affordable”

Luckily, the word “affordable” in The Affordable Care Act isn’t just for show. The law provides unprecedented access to reasonably priced health coverage for millions of Americans and cost controls to boot.

For example:

  • Many who are uninsured will be eligible for federal subsidies to help them purchase coverage through the online marketplace that’s sometimes called a health insurance exchange. In fact, up to 2.6 million Texans could get help buying insurance with these new health care tax credits.
  • Giving more small businesses and individuals the opportunity to participate in the marketplace will drive prices down thanks to our good friend “supply and demand.”
  • By investing in wellness initiatives, the ACA can help minimize expensive treatments for chronic illnesses farther down the road.

Another beneficial change involves experiments with paying for care based on health outcomes. Right now, providers have incentives to have their patients make more office visits, get more tests, and have more procedures, because each of these things gets paid for separately. Health reform experiments instead with creating incentives based on how patients fare with the treatment they’re given. This “quality over quantity” approach has the potential to get rid of wasteful and potentially dangerous over-testing and to improve healthcare overall.

Thanks to the law, insurance companies face limits on how much they can raise rates and what they can use to decide pricing. As of 2014, health insurance providers will be able to charge based on only the following factors:

  • Scope of coverage
  • Geography
  • Tobacco use
  • Wellness program participation
  • Age

Contrarily, insurance companies will be prohibited from considering any of these things in their prices:

  • Gender
  • Health status (pre-existing conditions!)
  • Occupation
  • Genetic information
  • Claims history

It’s progress! All in all, the ACA will include prevention measures, improve healthcare quality, and promote competition within the health insurance marketplace to help keep down costs. That is one reason the law is projected to decrease the federal deficit by $143 billion in its first decade. Making health insurance increasingly affordable while decreasing the deficit—pretty reasonable, don’t you think?

Written by Anna Sanderson, Intern for Children's Defense Fund - Texas