ACA: Overview and Product Information in the Context of Digital Health

Upon seeing this term, most people’s immediate association is likely the struggling Affordable Care Act (ACA) in the United States. Indeed, how effective has this long-held dream of the U.S. Democratic Party—nearly a century in the making—proven to be in the face of significant resistance? This article will begin with fundamental concepts and provide an overview of its impact on the healthcare industry as well as its current implementation status.

What is ACA?

ACA, or the Affordable Care Act, is commonly translated as the “Affordable Care Act.” Its full name is the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare. It is a federal law signed by U.S. President Obama on March 23, 2010.

The primary objective of this legislation is for the U.S. government to provide security protections for individuals who already have health insurance, offer health insurance coverage to those who do not, increase health insurance coverage rates, and reduce healthcare costs in the United States. Moreover, it is the first bill passed by Congress that was upheld as constitutional by the Supreme Court in its ruling on June 28, 2012. The Affordable Care Act officially went into effect on January 1, 2014. Under this law, penalties are imposed on individuals who lack health insurance and on eligible employers who fail to provide health insurance coverage.

and established the “individual mandate” as a central pillar of the Act. In addition, other provisions of the ACA include: strengthening employer insurance requirements; establishing public health insurance exchanges and government-subsidized nonprofit health insurers; expanding the Medicaid program; enhancing consumer protection provisions; improving system performance; and creating premium stabilization programs to increase insurer participation in the exchanges.

What insurance plans are included in the ACA?

Under the Affordable Care Act, since 2014, health insurance products sold by insurers must cover ten essential health benefits, including emergency services, hospitalization, laboratory services, prescription drugs, maternal and child health care, pediatric care, and mental health services. Insurers may offer additional healthcare services, but they must include the aforementioned basic health coverage.

Health insurance plans sold on the government Health Insurance Exchange are commonly referred to as Metal Plans. These primarily fall into four basic categories: Bronze Plan, Silver Plan, Gold Plan, and Platinum Plan. The key distinction among these four types of plans lies in the different cost-sharing ratios for medical expenses.

• Insurers offering the Bronze Plan will reimburse 60% of the costs for covered medical services, with individuals responsible for the remaining 40%;


• Silver Plan: The insurance company reimburses 70% of medical expenses, with the individual bearing 30%.


• Gold Plan: The insurance company reimburses 80% of medical expenses, with the individual bearing 20%.


• Platinum Plan: The insurance company reimburses 90% of medical expenses, while the individual bears 10%.

For products offered by the same insurance company, the Bronze Plan typically has the lowest premium but the highest out-of-pocket cost-sharing ratio for individuals. In contrast, the Platinum Plan carries the highest premium but the lowest out-of-pocket cost-sharing ratio for individuals.

Since the implementation of the ACA, its impact has remained mixed. According to a recent tracking survey report by CMC on U.S. healthcare reform:

1. Healthcare expenditures increased by 24%. Prior to the formal implementation of this legislation, total national healthcare spending in the United States stood at $2.5 trillion. By 2014, projections indicated that U.S. healthcare expenditures had reached $3.1 trillion, representing a total growth rate of 24% and an average annual growth rate of 6%.


2. U.S. physicians’ annual salaries reached $180,000. In 2009, the average annual salary for U.S. physicians was $173,680. By 2013, their average income had risen to $187,200, representing a 9.3% increase that largely kept pace with inflation.


3. Per capita health expenditure in the United States reached $3,300. In 2009, per capita healthcare expenditure in the United States was $2,500. By 2014, it had risen to $3,301.


4. The proportion of individuals without basic health insurance decreased by 3.5%. During the implementation of the Affordable Care Act, pharmaceutical companies, insurers, and hospitals emerged as winners, while physicians experienced neither gains nor losses; among consumers, it was primarily the middle class that suffered detriment. Nevertheless, low-income populations did reap tangible benefits, with the percentage of uninsured adults in the United States dropping to just 12.9% in 2015, down from 16.4% in 2010 when the Act was passed.

The figures suggest mixed results in achieving the objectives of its legislative initiatives. However, in March this year,U.S. Media Summarizes the Top 5 Benefits of the ACA for Americans:

1. The number of uninsured individuals has decreased. In the first two months of this year, the percentage of uninsured people across the United States dropped to 12.3%, compared with 17.1% at the end of 2013, before the start of health insurance reform.


2. Prohibition on Denying Coverage to Individuals with Pre-existing Conditions. Current laws prohibit insurance companies from denying applicants who already have pre-existing medical conditions.


3. Children are covered under their parents' insurance. Children can now remain on their parents' insurance plans until age 26.


4. Free preventive healthcare measures. Insurance companies are now required to cover a range of health check-ups and screening services, including annual physical examinations, mammograms, and cholesterol and diabetes tests.


5. Pay for medical care, not just for doctor visits and tests. That is, they will now cover the full spectrum of care costs for insured individuals, rather than only reimbursing fees for consultations and diagnostic tests as was the case before healthcare reform. Moreover, they will face penalties if patients are readmitted to the hospital within a short period.

Furthermore,The ACA also spurred an entirely new healthcare economic system.A wave of new entrants has flooded the healthcare industry. These newcomers range from startups to retail giants such as Apple, Samsung, and Walmart. Last year alone, total venture capital investment in this sector approached $4 billion. Among the startups in this space, Oscar stands out as a quintessential example, emerging as one of a cohort of companies offering health insurance solutions spurred by the Affordable Care Act (ACA). Oscar is committed to making health insurance plans more transparent and reasonable, designing coverage tailored to individual user needs. Its current competitors include major U.S. health insurers such as Aetna and UnitedHealth Group. In the fall of 2013, Oscar began pilot operations, providing ACA-compliant, more rational health insurance options to New York residents, with its official launch occurring in January 2014. To date, the company has secured $225 million in financing.

General Advisor for the Analysis of Popular English Terms in Internet Healthcare by VCBeat: Zhao Xinyuan, current CEO of Beijing Intecolon Technology Co., Ltd., and member of the Technical Steering Committee of HL7 China.

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