The health care reform legislation: an overview

Abstract

The Affordable Care Act (ACA) represents the most significant overhaul of our health care system since the establishment of Medicare and Medicaid. The ACA does two things: First, it fundamentally shifts the social contract in the U.S. Starting in 2014, individuals will be required to have health insurance; in return, the federal government will significantly expand low-income health insurance subsidies. Second, it significantly rebalances the financing for Medicare by reducing the growth in outlays, and increasing Medicare taxes paid by high earners. This paper provides non-specialists with a guide to the major provisions, their logic, and the federal budgetary implications. (All revenue and spending figures below refer to 10- year totals for FY 2010 to 2019 and are based on CBO and Joint Tax Committee estimates.)