The Affordable Care Act Has Expanded Health Coverage and Lowered Costs for Nebraskans, But Threats to the Law Remain

The Affordable Care Act: Background

Since it was implemented in 2014, the Affordable Care Act has led to historic advancements in health equity in the United States. The Affordable Care Act aimed to address high rates of uninsurance and exorbitant out-of-pocket costs, and in doing so, affected virtually all aspects of the health system.

The Affordable Care Act dramatically expanded health insurance and implemented reforms across the healthcare landscape. Some of its most influential reforms include the expansion of Medicaid, and the introduction of premium tax credits and insurance exchanges (“Marketplaces”) for people who do not have health insurance through their employer. The efforts have resulted in an extraordinary expansion of healthcare coverage: before 2010, about 16% of Americans were uninsured. In 2023, the uninsured rate had fallen to a record low of 7.7%. More than 21 million people enrolled in marketplace plans this year, and as of June 2023, 24.5 million more adults were enrolled in Medicaid thanks to Medicaid expansion.

The Affordable Care Act is known for expanding coverage and lowering costs, but it included numerous other unique provisions – perhaps most notably, requiring plans to cover women’s preventative health services such as contraception and barring insurers from denying coverage to people with pre-existing conditions. It also extended protection from discrimination for Americans with disabilities, created comprehensive care coordination for people with chronic conditions, and strengthened the safety net of HIV care and treatment, among many other provisions.

Affordable Care Act Landscape in Nebraska

The implementation of the Affordable Care Act in Nebraska has led to notable improvements in both the rate of uninsured individuals and the scope of coverage protections.

The Affordable Care Act cut Nebraska’s uninsured rate nearly in half – in 2013, 11.3% of Nebraskans were uninsured, but only 6.7% were uninsured in 2022. And thanks to Medicaid expansion and marketplace options, 193,590 Nebraskans have the Affordable Care Act to thank for their health coverage.

As of 2019, 295,000 people in Nebraska had pre-existing conditions, meaning that before the ACA, they could have been denied coverage or charged higher premiums for individual coverage. And as of 2023, more than 161,000 Nebraskans on employer health coverage who previously would have had no protection from catastrophic medical bills now have their out-of-pocket costs capped thanks to the Affordable Care Act. And the 746,000 Nebraskans at risk of lifetime benefit caps before the Affordable Care Act no longer have to fear their benefits running out.

Many Nebraskans have benefitted from the Affordable Care Act’s signature provisions – the introduction of the Marketplace and the expansion of Medicaid. For 2024, 117,882 Nebraskans signed up for Affordable Care Act marketplace coverage. And after Nebraska expanded Medicaid in 2020, 63,000 Nebraskans who were previously ineligible for Medicare had the opportunity to enroll.

Premium Tax Credits Supplied by Inflation Reduction Act

Further enhancements to health care affordability have come from recent policy changes in the American Rescue Plan and Inflation Reduction Act.

The American Rescue Plan, and later the Inflation Reduction Act, included temporary subsidies for Affordable Care Act Marketplace coverage plans, in the form of premium tax credits. These subsidies are now set to expire after 2025. Since the year before the subsidies went into effect, the number of people with Affordable Care Act Marketplace coverage has nearly doubled, growing from 11.4 million to 21.4 million. This year, the average annual premium cost would have been $1,593, but because of the subsidies, it is $888.

Thanks to the Inflation Reduction Act, 111,680 Nebraskans are saving on premiums for Affordable Care Act Marketplace plans – that’s 95% of those with an Affordable Care Act plan. The Inflation Reduction Act is estimated to be saving an average middle-class family of four in Nebraska roughly $12,628 on their yearly premiums.

These premium tax credits have significantly reduced the financial burden of health coverage for many, but because of their temporary nature they hang in the balance – and opponents of the Affordable Care Act would like nothing more than to see them go.

Threats to the Future of the Affordable Care Act

Despite how essential it is in delivering healthcare to Americans, the Affordable Care Act frequently finds itself under attack. Calls to repeal the Affordable Care Act began as soon as it was enacted, and have remained present in recent years. In 2017, opponents managed to repeal the Affordable Care Act’s tax penalty for not having insurance. Prior to that point, individuals who did not have qualified insurance were subject to tax penalties of up to $695. Repealing the tax penalty effectively ended the individual healthcare mandate.

The Affordable Care Act’s detractors have claimed that if the law is overturned, they would enact proposals to protect those with pre-existing conditions from skyrocketing costs. None of the proposed replacements to the Affordable Care Act have the necessary features – such as a complete set of rules for insurers – that would make that possible. One proposal, for instance, suggested banning insurers from charging higher premiums based on pre-existing conditions while still permitting them to deny coverage altogether to individuals who are sick. This would have wide-ranging impacts – one study found that one in two Americans could have a pre-existing condition. Insurers define what a pre-existing condition is, and it can be anything from heart disease to acne or asthma.

In March, the Republican Study Committee (RSC) – a conservative House of Representatives caucus – released a budget plan detailing, among other proposals, a plan to cut Affordable Care Act marketplace subsidy spending, Children’s Health Insurance Program (CHIP) spending, and Medicaid spending by almost 54% over the next decade.

As one of the proposed cuts, the RSC stated its intention to rescind the enhanced premium tax credits, which would trigger consequences across the health care landscape. Nearly all Affordable Care Act marketplace enrollees would face substantial increases in their premium payments, which would likely lead to a sharp decline in marketplace enrollment – potentially dropping from 22.8 million in 2025 to 15.4 million by 2030. Low-income enrollees would experience the most significant percentage increase on their premiums. Although the cost to extend the subsidies permanently is significant – $335 billion over ten years – the expiration of the subsidies would likely result in increased overall health care costs due to individuals having to spend more on premiums and potentially losing coverage.

The RSC budget would also remove protections for Americans with pre-existing conditions, codify rules put forth by the Trump administration allowing association – or “junk” – health insurance plans, which are not required to cover the essential health benefits put in place by the Affordable Care Act, funnel people with high-risk medical conditions into state-run coverage pools with high premiums and deductibles, and more.

Project 2025, the conservative policy blueprint, takes it even further by proposing “targeted time limits or lifetime caps” on Medicaid benefits – meaning that people could abruptly lose Medicaid coverage even if they otherwise would qualify. In 2021, 18.5 million Medicaid beneficiaries across the country – and 49,700 in Nebraska – qualified for Medicaid based on income alone, and would be most at risk of losing coverage under lifetime limits.

The Affordable Care Act has significantly advanced healthcare access and affordability, reducing the uninsured rate and providing crucial protections. In Nebraska, its benefits are clear, with lower uninsured rates and expanded coverage. Recent tax credits from the Inflation Reduction Act have further reduced premium costs, but these are under threat from the Affordable Care Act’s detractors. As debates continue, sustaining the Affordable Care Act’s progress remains essential for maintaining healthcare access and affordability for all.