Affordable Care Goals

The Affordable Care Act is the comprehensive health care reform law enacted in March 2010. Also, known as “Obomacare”, the Affordable Care Act has three primary goals. These goals include making affordable health insurance available to more people, expand Medicaid program to cover all adults with income below 138 percent of the federal poverty level, and support innovative medical care delivery methods designed to lower the costs of health care generally.1 The reason that the affordable care act included a provision that requires individuals to purchase insurance is because insurance companies, in order to provide coverage for individuals, pool the risk for all of the individuals that they are providing coverage to and that is how they develop
their rates for those services. If you do not require individuals to purchase coverage but you require companies to sell to anyone that wants to buy, that creates a problem. The people that end up buying the coverage are the people that need the coverage because they have existing health conditions. The people that are healthier may choose not to purchase the coverage. Therefore, a situation is created where the people that really need the coverage and file the claims are the people that have the coverage. In turn, the rates go up because of the claims. This creates a recipe for disaster because the individuals that need the coverage cannot afford it because there are not enough people paying for coverage to offset the costs. If there are not enough young and healthy people signing up, insurers must raise premiums. If the administration signals it will either stop enforcement of the individual mandate or give broad exemptions, insurers will respond by raising premiums or exiting the market. The Congressional Budget Office estimates that without the individual mandate, premiums in the individual insurance market could rise by twenty percent.2