The Patient Protection and Affordable Care Act (PPACA) remains a mystery to most Americans.  Will it make it easier or harder to get health care?  Will it really decrease costs or just make health care more expensive?  First, remember that PPACA is market-based health insurance reform.  It is designed to improve access to health insurance mainly using private health insurance companies and promoting competition between them.   And there are a lot of details (about 900 pages worth) but our current approach to health insurance is very complicated.  We have national health insurance for the elderly and disabled (Medicare), and for some low-income people (Medicaid), employer-based health insurance, and individual plans for those who work for small employers or are self-employed.  PPACA mostly affects this last group of people who want to purchase their own health insurance.  See the following cartoon from the Kaiser Family Foundation for a quick introduction:

So what does PPACA do?

  • Requires insurance companies to provide coverage for pre-existing conditions
  • Prohibits insurance companies from cutting people off when they get sick
  • Requires people to have insurance or pay a penalty
  • Creates online Health Insurance Marketplaces  (aka Exchanges) to help people purchase health insurance at affordable rates by promoting competition
  • Limits rate increases and excessive profits by insurance companies
  • Allows young adults under 26 to stay on their parents’ plan
  • Requires all plans to cover basic preventive and primary care

To learn more about how PPACA is likely to affect you and your family go to:

Is PPACA likely to lower cost and improve care?  Most experts think that most consumers will welcome PPACA’s new consumer protections and benefits, but that PPACA will only do a little bit to restrain healthcare costs.  PPACA does not do much to reform how we pay doctors, hospitals, pharmaceutical companies, or testing companies or how we deliver care. At best, a lot more reforms will be needed if we really want to substantially decrease health care costs and improve care.

Author: Jim Bailey