The Affordable Care Act (ACA) has significantly improved health insurance coverage rates, and recent congressional and administration decisions related to its implementation have increased both coverage and affordability, according to a new report from the Department of Health and Human Services' Assistant Secretary for Planning and Evaluation (ASPE).
For years before the ACA was passed, the share of people with private health insurance was declining as rising health care costs made insurance increasingly unaffordable. Tight Medicaid eligibility rules left low-income, non-disabled adults without children almost entirely without insurance. By 2010, about 48 million Americans, or 16 percent of the population, were unable to obtain health insurance.
Two key provisions of the ACA gave people new options for affordable comprehensive coverage: tax credits for private insurance purchased through newly created marketplaces and expanded eligibility for the Medicaid program. The law also established federal standards for the private health insurance marketplace, including guaranteeing coverage for people with pre-existing conditions and prohibiting insurers from charging higher premiums based on health status and gender.
The uninsured rate fell from 14.4% in 2013 (before the ACA's major coverage expansions took effect in 2014) to 9.0% in 2016, the ASPE report found. Coverage increased in every state, with the increase being greater in states that expanded Medicaid.
The increase in coverage was particularly large for people with incomes below 200 percent of the federal poverty level. In states that adopted Medicaid expansion after the Supreme Court gave states the choice to expand Medicaid, people with incomes below 138 percent of the federal poverty level became eligible. And in ACA markets, tax credits for insurance premiums were largest for families with incomes between 100 and 200 percent of the federal poverty level. The ACA also reduced disparities in coverage between racial and ethnic groups, between people living in rural and urban areas, and disparities related to sexual orientation and gender identity.
However, these successes were followed by efforts to weaken the ACA, which reduced coverage or made it less comprehensive or affordable between 2017 and 2020. After several legislative attempts to repeal the ACA failed, "the Trump administration has taken a number of administrative actions to change the health insurance landscape...," according to the ASPE report. These include cutting federal funding for outreach and enrollment assistance that helps people navigate coverage options and understand how much insurance will cost once premium tax credits are applied, discouraging people who are immigrants and their families from enrolling in insurance plans, and expanding substandard plans that are exempt from ACA protections for people with pre-existing conditions.
Consistent with federal guidance, some states implemented policies that reduced Medicaid enrollment, including premiums; policies that denied coverage to people who could not complete paperwork showing they met or were exempt from burdensome work requirements; and other administrative restrictions. At the same time, several other states expanded the Medicaid program during this period, mitigating overall coverage losses.
In 2020, the COVID-19 pandemic prompted the federal government to take action to protect health insurance and support state budgets by passing laws that increased federal funding for Medicaid in states and provided continued coverage for Medicaid enrollees. These measures prevented the loss of insurance coverage during a pandemic and reduced the uninsured rate.
Since 2021, legislative and administrative changes have evolved the ACA, improving coverage and affordability and more than offsetting the loss of coverage that occurred between 2017 and 2020, according to the ASPE report. As of 2023, the national uninsured rate has fallen below 8 percent, a record low of less than half the rate before the ACA was passed. The number of people with coverage in the marketplace has increased each year since 2021, with several million more people now enrolled in the program.
Improved premium tax credits for marketplace participants helped increase the number of marketplace participants to more than 21 million in 2024, up nearly 80 percent from just 12 million in 2021. In 2024, a record 92 percent of marketplace participants, or 19.7 million people, became eligible for premium tax credits. These tax credits reduce disparities and improve coverage rates by providing upfront financial assistance to help people afford the health insurance plans offered in their state through the ACA marketplaces.
Increased investment in outreach and enrollment, as well as creating additional time for people to enroll in insurance on the marketplace, called special enrollment periods, also contributed to the growth. Looking ahead, the administration recently finalized a regulation that will allow people with DACA (Deferred Action for Childhood Arrivals) status to access coverage and premium tax credits through the marketplace.
Important steps in the Medicaid program have also helped expand coverage. States now have the option to provide 12 months of Medicaid coverage after delivery and are required to provide continuous eligibility for children for at least 12 months, which protects young parents and children from gaps in coverage that are associated with poor health outcomes. The final rule, issued in 2024, simplifies eligibility requirements for Medicaid and the Children's Health Insurance Program, streamlines the application process, and removes unnecessary administrative barriers to enrollment.
Medicaid enrollment increased as four more states adopted the ACA Medicaid expansion beginning in 2021. Federal legislation made permanent the federal fiscal incentives originally enacted in 2020 for states that recently expanded the Medicaid program.
Opportunities remain to build on the ACA's historic achievements, including expanding the Medicaid program in the ten remaining states not covered by the expansion, reducing barriers to coverage for people who are immigrants, continuing investments in outreach and enrollment assistance, and reducing administrative barriers to coverage. Crucially, the expanded premium tax credits expire after 2025. If Congress fails to act, nearly all marketplace participants will face significant increases in the cost of premiums, and 4 million people could go uninsured.