Explain the system of reforms that were enacted in the PPACA.

January 2017

The Patient Protection and Affordable Care Act (also known as “Obamacare“) is a regulatory overhaul of the U.S. healthcare system enacted in 2010. This statute includes several reforms that are scheduled to become effective successively until 2018, in order to grant an adequate period of transitions for the insurance companies, the insurants and the government as the three involved parties.  

PPACA established different tiers of coverage, whereby the bronze-status is mandatory for every citizen of the United States, as far as there is no alternative coverage provided (e.g. by the employer). All categories offer the essential health benefits and the remaining categories (i.e. the silver, gold, platinum status) only vary in their proportions of premiums and out-of-pocket costs. Exceptional clauses are only valid for people who come under cases of hardship, namely members of certain religious groups, people that live below the poverty line, etc. Uninsured people that do not fall in those categories have to pay a tax which is equivalent to the corresponding height of the avoided insurance premium.

As part of the governmental commitments, Medicaid has to be granted for people that live below the defined poverty line. In addition to that, people with low incomes have to be subsidized and existing financial benefits increased, especially with regards to the co-insurance of children. Furthermore, companies that employ more than fifty workers are under the obligation to provide a bronze-level insurance for their employees, otherwise they are charged with a tax that is used for financing the PPACA-reforms.

Finally, also the insurance companies are forced to meet additional obligations. They are no longer allowed to refuse potential insurants due to medical constitutions or pre-existing illnesses. Even though the first success of the reforms has already become apparent with regards to the widening of Mecidaid and the reduced number of uninsured citizens, “Obamacare” has always been highly controversial. It remains to be seen how the course will actually be altered after the change of government in the United States.