Beginning January 1, 2014, the Affordable Care Act (ACA) changed the rules under which all private insurance was sold and operated, with the greatest changes made for nongroup (sometimes called individually purchased) health insurance, along with substantial changes made for fully insured plans sold to small employers (fewer than 50 workers). Many people, including young adults and those unfamiliar with private insurance before 2014, may be unaware of the profound effects the ACA has had in enhancing accessibility, affordability, and adequacy in these markets. Before the ACA, private nongroup insurance markets, in particular, failed to serve the needs of large swaths of actual and potential customers in many ways. We summarize these failings, the ways in which the ACA addressed them, and the evidence of the law’s effects on enrollment, insurer participation, and premiums.

WHY THIS MATTERS

Ten years since full implementation of the ACA and seven years after the failure of the last serious attempt to repeal it, presidential candidate Donald Trump is again calling emphatically for the law’s repeal. At the same time, a group representing three-quarters of Republicans in the House of Representatives has detailed an approach for cutting federal funding for Medicaid, the Children’s Health Insurance Program, and ACA premium assistance by more than 50 percent; restructuring of the Medicare program is also included in the package. Such dramatic cuts would result in increases in the uninsured, the underinsured, and barriers to necessary care for many people in need who currently receive significant support. With President Joe Biden and many congressional Democrats intent on making permanent the temporary increases in federal financial assistance for coverage implemented under the Inflation Reduction Act, the outcome of the 2024 elections has expansive implications for the country’s health insurance system. 

WHAT WE FOUND

• The ACA prohibited all preexisting condition exclusions for employer-based insurance and insurance purchased through the newly regulated nongroup insurance markets, and limited employer-based insurance waiting periods to no more than 90 days.
• The law prohibited retroactive cancellations of insurance and eliminated all annual and lifetime dollar benefits limits across insurance markets.
• The law required private health insurance plans to include young adults on their parents’ policies and required coverage of a set of preventive services at no out-of-pocket costs to enrollees using in-network clinicians.
• The ACA set minimum medical loss rations, improving the value of insurance policies by limiting how much of a premium could go to administration and company profits.
• For the first time, insurers were required to provide consumers with simple, clear summaries of the plans they were considering.
• Nongroup insurers in the regulated markets could no longer deny coverage to applicants or charge them differentially based on health status, prior use of health care, gender, or any other reasons outside of limited variations by age, tobacco use, and family size. In addition, nongroup policies were required to cover a list of essential health benefits.
• The law limited the out-of-pocket exposure enrollees could face and provided income-related financial assistance for the purchase of comprehensive nongroup insurance. In addition, Marketplaces were created to provide consumers with information on their plan options and assist them in understanding their options.
• The number of uninsured has fallen to historic lows since implementation of the law, with 7.2 percent uninsured across all ages as of the second quarter of 2023. Coverage through private nongroup health insurance markets grew markedly, from 13.1 million people under age 65 in 2009 to 21.6 million in 2022.
• The average person receiving a premium tax credit receives more than $6,000 to lower their insurance premium in 2024.
• Insurer participation in the nongroup Marketplaces has increased substantially, meaning 2024 consumers have more options than ever. Premiums in the Marketplaces have grown more slowly and are typically lower than those for employer-based insurance.

HOW WE DID IT

Drawing on the law and its associated regulations, the authors’ and others’ work on private insurance before the ACA’s implementation, and the authors’ and others’ analyses of the impact of the ACA over the last 10 years, we summarize the ways in which the law has transformed private insurance markets in a broad set of ways.