How the ACA has transformed healthcare—and what its future may hold

Few pieces of legislation have been as impactful to healthcare as the Affordable Care Act (ACA).

Signed into law on March 23, 2010, by then-President Barack Obama, the ACA was designed to increase access to health insurance, primarily for people who couldn’t get coverage through an employer.

And it’s been pretty successful at doing so. At the time the ACA was signed, about 19% of the adult population under age 65 was uninsured. That number fell to about 8% as of 2023. By 2024, more than 45 million people received insurance thanks to the ACA, according to federal estimates.

“The Act has become so entrenched in the way…we access healthcare, that people take for granted just how extraordinary its impact has been,” Abbe Gluck, professor of law and faculty director of the Solomon Center for Health Law and Policy at Yale Law School, told Healthcare Brew. “It’s an accomplishment on par with national landmark statutes like Medicare and Medicaid and the Civil Rights Act.”

But 15 years later, the Trump administration has proposed a number of policy changes that would significantly alter the legislation, including lowering federal funding and imposing Medicaid work requirements.

A quick refresher

The ACA made several major changes to the US health insurance system.

Notably, it expanded eligibility and funding for Medicaid, required large employers (i.e., those with more than 50 full-time employees) to provide health insurance, banned insurers from denying coverage based on preexisting conditions, and created regulated, standardized marketplaces for patients to purchase insurance.

But it wasn’t without its flaws.

One of the ACA’s limitations, according to Gluck, who served as special counsel to the president during the Biden administration, is the fact that the pharmaceutical industry was largely left out.

“There were some benefits to increasing coverage under Medicare for prescription drugs, which were very important, but generally there was not a wholesale reform of the pharmaceutical industry,” she said.

The Biden administration took a step to change that in the 2022 Inflation Reduction Act (IRA), when it allowed the Department of Health and Human Services (HHS) to negotiate the prices of a limited number of brand-name drugs. While they don’t go into effect until 2026, the negotiated prices are 38% to 79% cheaper than list prices.

ACA evolution

Besides negotiating drug prices, other notable changes to the ACA include when, in 2017, the first Trump administration eliminated penalties associated with the individual coverage mandate, a part of the ACA that required every citizen to have health insurance, Gerald Kominski, senior fellow at the UCLA Center for Health Policy Research, noted.

Getting rid of the individual mandate penalty had a “marginal” effect on the number of uninsured people in the US, according to Kominski. A 2022 study from American University found that the likelihood of being newly uninsured increased by 24% following the elimination of the penalty.

Also under the first Trump administration, HHS allowed states to impose Medicaid work requirements, meaning certain beneficiaries had to submit proof they were either employed or engaged in other approved activities, like going to school, to keep their coverage. Between 2018 and 2020, 13 states implemented work requirements, though the Biden administration rolled them back in 2021.

The next significant change came with the IRA, which expanded eligibility for marketplace subsidies, Kominski noted. Previously, people with incomes up to 400% of the federal poverty level were eligible for subsidies to help pay for insurance via ACA marketplaces. The IRA removed the 400% cap, giving people with higher incomes access.

ACA marketplace enrollment surged following the change. In 2020, 11.4 million people bought health insurance from a marketplace, and by 2024, that number grew to 21.4 million—an 88% increase, according to KFF.

What comes next

As the second Trump administration has started to make massive cuts to the federal budget, Congress is reportedly considering making significant changes to the ACA.

The House’s budget resolution adopted in February calls for $880 billion in budget cuts for the House Energy and Commerce Committee, which oversees Medicare and Medicaid. No specifics have been shared on what changes may be made to the federal insurance programs, but a few notable options are under consideration, according to KFF.

One is eliminating the increased federal match rate for Medicaid expansion states. As part of the ACA, the federal government covers 90% of expansion states’ Medicaid budgets, while nonexpansion states get a 50%–77% match rate, depending on the state’s per capita income.

Twelve states have trigger laws saying that if their federal match rate falls below 90%, they’ll stop their Medicaid expansion programs, Kominski noted. Other states “would be hard-pressed financially to make up the loss of federal funding to maintain the expansion,” he added, which would “have a significant impact on the lowest-income individuals in the country” by effectively making them ineligible for Medicaid.

Another potential change, Kominski said, involves the expanded subsidies created under the IRA, which are set to expire at the end of 2025. Congress has the ability to extend the subsidies, but “it’s a safe bet” it won’t, he added.

Economic and social policy think tank Urban Institute estimated in November 2024 that 4 million people would lose health insurance if the subsidies expire. Insurance would also become “much more expensive for millions of people,” Gluck said.

Additionally, multiple Trump nominees have signaled support for bringing back Medicaid work requirements. Ohio already asked the Trump administration in early March to approve such a requirement, and Iowa’s Senate passed a bill on March 25 that would require residents to prove they work 80 hours per month to keep their Medicaid coverage.

President Trump has repeatedly denied plans to cut Medicare or Medicaid. However, multiple analyses assert it’s impossible to reduce the Energy and Commerce Committee’s budget by $880 billion without cuts to Medicaid or Medicare.

All these potential changes would largely shift Medicaid costs to states and away from the federal government, likely resulting in massive eligibility reductions, Sarah Lueck, VP for health policy at the Center on Budget and Policy Priorities, said during a Feb. 10 virtual discussion with KFF.

“Gutting [the ACA] or significantly reducing the financing is going to be harmful to a lot of low- and middle-income families in the US,” Kominski said. “I hope that the drastic approach that’s being proposed by the current administration is not successful, but I fear that it will be, and it’ll be a high price to pay in terms of the health of millions of Americans.”