A number of high-profile Republicans in recent years have tried to claim that they have become the “party of the working class.” Nothing exposes this as false as clearly as the GOP’s unrelenting attacks on the Affordable Care Act (ACA)—legislation that was imperfect but still an enormously important advance in the U.S. welfare state.
The latest attack is another court case that made its way to the Supreme Court (California vs Texas)—which could have a ruling as soon as Thursday. Legal merits of the case aside (there were essentially none), the economic fallout of the case if it is decided in the plaintiffs’ favor would be profound, as the requested remedy is the abolition of the entire ACA.
The ACA was in some ways hugely complicated, but can be boiled down to five major undertakings:
- Strengthening employer-provided health insurance with mandates like no lifetime caps on benefits paid and an allowance for adults up to age of 26 to be covered on parents’ plans;
- Providing needed regulation for the “non-group” health insurance market (the market for people who can’t get insurance through their employer or through existing government programs);
- Providing subsidies to make purchasing non-group plans more affordable for many;
- Paying for states to expand their Medicaid programs significantly; and
- Raising taxes on high incomes to pay for its spending provisions.
Republicans are most intent on the ACA’s taxes being rolled back if the Supreme Court rules in their favor. Despite their new pose as working-class defenders, they work hardest for tax cuts for rich people and corporations.
But for now, we should remember the mammoth benefits provided by the ACA through its spending and regulatory provisions. It did not solve all of the problems in the U.S. health care system, and it was not as transformational a change as a move towards single-payer health care would be, but it was easily the most important expansion of the (still too-threadbare) U.S. welfare state since the 1960s.
Some key benefits stemming from it are:
Strengthening employer-provided health insurance
- Almost three million adults aged 19-25 gained coverage through the ACA provision allowing them to stay on parents’ employer-provided health plans.
- By 2020, nearly $8 billion had been rebated to beneficiaries of employer-provided health plans because these plans had not spent enough on actual reimbursement of health costs under new customer protections included in the ACA.
- 105 million Americans covered by employer-sponsored plans had lifetime limits removed on what insurers would pay for medical costs.
Non-group coverage regulations
- Perhaps most famously, the ACA ended the practice of insurers denying coverage (or charge exorbitant premiums) on the non-group market to those suffering from preexisting health conditions. The Kaiser Family Foundation has estimated that 27% of non-elderly Americans have preexisting conditions that would have made them eligible for denial of coverage before the ACA.
- Before the ACA, insurers in the non-group market commonly exercised “recissions” of coverage—unilaterally declaring coverage canceled (often retroactively) when beneficiaries became sick. These recissions probably best demonstrate how corrupted and in need of reform the non-group market was before the ACA. The ACA has made such recissions illegal.
- The ACA also made insurers offer more-protective plans in the non-group market by forcing them to offer plans with lower out-of-pocket costs like deductibles, co-pays, and co-insurance. Nearly half of plans on the non-group market before the ACA would not have been allowed on the exchanges because they did not offer enough protection against out-of-pocket costs.
Subsidies for non-group coverage
- Currently, about 12 million people obtain health insurance coverage through the marketplace exchanges set up by the ACA, and 90% receive subsidies to make the coverage more affordable.
- In 2020, these subsidies totaled just under $60 billion, and by definition they are targeted at low- to moderate-income households.
- The expansions of public health insurance coverage through Medicaid were the most transformative part of the ACA. As of 2021, the ACA Medicaid expansions provided health insurance coverage for 14 million Americans and provided an effective income transfer of over $90 billion to households, with nearly all of this transfer going to families below 150% of the federal poverty line.
- These expansions were highly effective in equalizing racial disparities in access to health care, even as states that refused to accept the expansions damaged working families across the board. Between 2013 (before the ACA Medicaid expansions went into effect) and 2018 in expansion states, the share of the white population that was uninsured dropped by 51%, while for the Black population it fell by 53%. In non-expansion states, the drops were substantially lower—27.8% for the white population and 31.5% for the Black population. By 2018, the Black population in expansion states had a lower rate of uninsurance than the white population in non-expansion states.
- Among Hispanics, the share of the population that was uninsured fell by just two percentage points in states that did not expand Medicaid, but fell by 27 percentage points in states that did.
There is plenty left to be done to make the U.S. health system efficient and fair. But the ACA was a large step forward, and the continued attacks on it by a Republican Party intent on clawing back the high-income taxes used to fund it show clearly just how uncommitted they are to helping working-class Americans.