The Affordable Care Act

The life of the ACA has been marked by controversy and unexpected twists and turns. Since the ACA’s implementation, RAND analysis has examined the impact of changes to the law , beginning with the Supreme Court ruling that state Medicaid expansion was optional. RAND analysis found that Medicaid expansion was a boon for states. As of September 2020, 35 states and the District of Columbia had expanded Medicaid.

More recently, Congress has debated whether to eliminate the ACA and replace it with a different system or change the ACA to meet diverse policy goals. Extensive RAND research offers insights about the likely impact of repealing or revising the ACA along key dimensions, including Medicaid, the individual mandate (which was repealed by Congress in 2018), tax subsidies in the individual market, and essential health benefits. The future of the entire ACA is uncertain. The Supreme Court is set to rule on the entire act’s constitutionality some time in 2021.

The ACA goes well beyond expanding insurance. It takes steps to reduce costs and improve health care delivery, such as:

  • Medicare reforms that save money by reducing payments to providers. One of the ACA’s strategies for cost containment involves cutting prices that Medicare pays to most medical providers. Early evidence showed that these cuts were having an effect. They are reducing Medicare spending growth and beginning to exert a spillover effect on private-sector health care spending as well.
  • Experimental activities to test the effects of alternative payment and delivery approaches. The ACA calls for greater emphasis on paying for care based on value instead of volume of services. New programs are advancing value-based purchasing (VBP) across a range of settings. A RAND study assessed the state of knowledge in this area and identified key knowledge gaps in order to help federal policymakers implement and scale up VBP programs and set realistic goals for defining their success.

As the ACA continues to evolve, RAND Health Care continues to monitor the evolving policy environment and to track the law’s effects on costs and coverage at the national and state levels.

Read More About the Affordable Care Act