By Kimerly Amadeo, Balance. updated 2018.
The biggest benefit of the ACA is that it slows the rise of health care costs. It does this by providing insurance for millions and making preventive care free. This means people receive treatment before they need expensive emergency room services. In 2016, the cost of health care services increased 1.2 percent for the year. That's much less than the price increase of 4 percent in 2004.
It requires all insurance plans to cover 10 essential health benefits. These include treatment for mental health, addiction, and chronic diseases. Without these services, many patients wind up in the emergency room. Those costs are passed onto Medicaid and therefore the taxpayer.
Insurance companies can no longer deny anyone coverage for pre-existing conditions. They can't drop them or raise premiums if beneficiaries get sick.It eliminates lifetime and annual coverage limits. Insurance companies used this to contain costs to $1 million per year. Beneficiaries who exceeded that limit had to pay 100 percent of costs.
Children can stay on their parents’ health insurance plans up to age 26. As of 2012, more than 3 million previously uninsured young people were added. This increased profit for insurance companies. They receive more premiums from these healthy individuals.
States must set up insurance exchanges or use the federal government's exchange. Either method makes it easier to shop for plans.The middle class (earning up to 400 percent of the poverty level) receive tax credits on their premiums. It expands Medicaid to 138 percent of the federal poverty level. It provides this coverage to adults without children for the first time.
It eliminates the Medicare "doughnut hole" gap in coverage by 2020.Businesses with more than 50 employees must offer health insurance. They receive tax credits to help with the costs.
It lowers the budget deficit by $143 billion by 2022 according to the Congressional Budget Office. It does this in three ways. First, it reduces the government's health care costs. Second, it raises taxes on some businesses and higher income families. Third, it shifts cost burdens to health care providers and pharmaceutical companies.