Fact Sheet on the Nationwide Benefits of the Health Care Reform Law

July 2012
Nationwide Benefits of the Health Care Reform Law
Committee on Energy and Commerce
Democratic Staff Report

On March 23, 2010, Congress passed and President Obama signed into law historic health care reform legislation:  the Affordable Care Act.  At the two-year anniversary of this landmark law, new data demonstrates the benefits that the law has already provided to seniors, young adults, small businesses, and many others throughout the nation.  As a result of the law: 

• 6.6 million young adults have benefited by joining or remaining on their parents’ health insurance plans.

• 5.3 million seniors received prescription drug discounts worth more than $3 billion, an average discount of over $600 per senior.

• 35 million seniors have received Medicare preventive services without paying any co-pays, coinsurance, or deductibles.

• 14 million children and 40 million adults now have health insurance that covers preventive services without paying any co-pays, coinsurance, or deductibles.

• 360,000 small businesses employing 2 million workers received tax credits to help maintain or expand health care coverage for their employees.

• 105 million Americans now have health coverage with no lifetime limits.

• $3.9 billion in public health grants have been given to community health centers, hospitals, doctors, and other healthcare providers to improve public health, fight unreasonable insurance rate increases, and build affordable insurance exchanges.

• Nearly 13 million Americans will receive more than $1 billion in rebates from their insurance companies this year.

• Up to 17 million children with preexisting health conditions can no longer be denied coverage by health insurers.

In addition, the consumer protection provisions of the Affordable Care Act have ended some of the worst abuses of health insurers.  These provisions have helped protect 76 million Americans from excessive rate increases by limiting the amount of money that health insurers can spend on administrative expenses and profits and requiring health insurers to post and justify rate increases of 10% or more.  The Affordable Care Act has eliminated the threat of health coverage rescissions for more than 180 million Americans where insurers take away a person’s insurance when they get sick and need it most.  The law has banned insurance companies from establishing lifetime coverage limits helping 105 million people. 

Starting for plan years beginning after September of this year, health insurers and employers will be required to provide 180 million Americans with an easy-to-understand summary of benefits and coverage under their health care plans, providing them with clear and consistent information so they can easily compare health care options.  And when the health care reform law goes fully into effect in 2014, more than 30 million people who now lack health care coverage will have access to affordable coverage, and every American will be protected from discrimination by insurers based on a preexisting health condition helping up to 130 million Americans.

Health Care Benefits

Health insurance coverage for young adults to age 26.  Starting in September 2010, the Affordable Care Act required health insurers to permit parents to retain coverage for their children until they reach the age of 26.  The result has been a significant increase in health insurance coverage for young adults, who have traditionally been the age group that is most likely to be uninsured.  This has helped 6.6 million young adults join or remain on their parent’s plans, of which nearly half are going from being uninsured to having coverage, reducing the percentage of young adults without coverage by 25%. 

Prescription drug discounts for seniors.  Beginning on January 1, 2011, the Affordable Care Act provided a 50% discount for prescription drugs for Medicare beneficiaries who enter the Medicare Part D “donut hole” and lose coverage for their drug expenses.  The law increases the discount for brand and generic drugs for Medicare beneficiaries each year until 2020, when the donut hole is finally eliminated.  Nationwide, more than 5.3 million seniors have already saved more than $3 billion on their prescription drugs since this provision went into effect, an average savings of more than $600 per person. 

Preventive care and services for seniors with no cost sharing.  Beginning on January 1, 2011, the Affordable Care Act provided all Medicare beneficiaries with access to preventive care and services without any co-pay, coinsurance, or deductible.  This change to Medicare has allowed more than 35 million seniors nationwide to take advantage of free preventive services.  Available services include annual wellness visits, cholesterol and other cardiovascular screenings, mammograms, cervical cancer screenings, and colorectal and prostate cancer screenings, all of which are provided with no out-of-pocket cost to seniors. 

Preventive care and services for children and adults with no cost sharing.  Beginning on September 23, 2010, the Affordable Care Act required new private insurance plans to cover preventive care services without any co-pay, coinsurance, or deductible.  These insurance policies must cover services such as regular pediatrician visits for children; cholesterol and blood pressure screening for adults; flu shots and other immunizations; cancer screening like mammograms, pap smears, and colonoscopies; and many more.  Nationwide, this change has allowed 54 million Americans with private insurance to receive preventive services without cost-sharing.  This includes 14 million children, 20.5 million women, and 14.5 million people who are African American, Latino, or a part of other minority groups for whom preventative care can reduce health disparities.

Tax credits for small businesses.  Starting on January 1, 2010, the Affordable Care Act provided new tax credits to small businesses worth 35% or more of the cost of providing health insurance to their employees.^[1]  Nationwide, 360,000 businesses with more than 2 million employees used these tax credits in 2011. 

Grants for health care providers.  The Affordable Care Act has funded $3.9 billion in grants since 2010 to support public health and healthcare providers.  These grants support community health centers; the development of innovative, cost-saving health care delivery systems; training for doctors, nurses, and other health professionals; and other important public health priorities.  The grants also support state efforts to fight unreasonable insurance rate increases and build affordable health insurance exchanges so consumers will be able to purchase affordable health insurance in a fair, transparent marketplace.

Consumer Protection Benefits

Stopping abuses by health insurers.  The Affordable Care Act ended the most egregious insurance company abuses.  Under the Act, health insurers are barred from denying children insurance on the basis of pre-existing conditions like diabetes, heart disease, or cancer; they can no longer rescind coverage for individuals who become ill; and they are prohibited from imposing annual and lifetime limits on coverage.  There are 17 million children with preexisting health conditions who are now protected against insurer denials; all 180 million Americans with private health insurance coverage are protected from rescission of their health coverage if they become ill; and there are 105 million people in health care plans that previously imposed lifetime limits but are now prohibited from doing so.

Lowering health insurance costs.  The Affordable Care Act protects individuals from soaring health insurance costs by requiring insurers to post and justify proposed rate increases of 10% or more.  It also limits the amount that insurance companies can spend on administrative expenses and profits.  An estimated 76 million Americans with individual coverage or employer coverage are benefitting from these provisions and nearly 13 million Americans will receive over $1 billion in rebates from their insurance companies this year.^[2]

Future Benefits

Starting in September of this year, all new individual and group health insurance policies will be required to provide consumers with an easy-to-understand summary of their health benefits and coverage, including a standardized “coverage examples” section that uses a format modeled on the nutrition facts label for food.  The summaries will give the 180 million Americans with private insurance clear, consistent, and comparable information about their health plans and the coverage they can expect to receive from these plans. 

By 2014, virtually all of the important benefits of the Affordable Care Act will come into effect.  Health insurers will be prohibited from discriminating against all adults and children with pre-existing conditions, which will protect the up to 130 million Americans with a pre-existing health condition.  When the law is fully implemented, 30 million Americans who now lack health insurance will receive coverage for the first time.  The 180 million Amerians with private insurance coverage will no longer face annual limits on coverage.  Every American who purchases their health insurance on the private market will be able to shop for health insurance in transparent and competitive marketplaces called exchanges, where insurers will be required to publish the prices and benefits of their policies in simple, plain language. 

Along with all these benefits, the Affordable Care Act will reduce the federal deficit by more than $100 billion over the next decade and by more than $1 trillion in the decade after that.

This analysis is based upon the following sources:  the U.S. Census (data on the number of small businesses, population of young adults, and insurance coverage); the Centers for Medicare and Medicaid Services (data on Medicare enrollment, Medicare preventive care utilization, and the number of seniors who entered the Part D donut hole); the Department of Health and Human Services (Affordable Care Act grants, estimates of coverage for young adults and the number of individuals in plans that receive new protections under the Affordable Care Act, and estimates of the number of individuals with preexisting conditions); the Internal Revenue Service (data on use of tax credits by small businesses in 2010), the Commonwealth Fund’s Tracking Survey of Young Adults, and the Kaiser Family Foundation’s Employer Health Benefits Survey (data on employer based insurance coverage).

Related Documents: 

Report: Nationwide Benefits of the Health Care Reform Law (July 10, 2012).