I remember being exited about the idea that health insurance providers would be bound to spend a certain portion of their yearly outlay on actual medical services (I recall 85%, up from the current effective 35%) as a way of controlling costs by basically making it illegal for an insurance company to make too much money without a way to spend it. I also remember all such ideas dying in the service of getting it passed. I have no doubt that I could be wrong about all that, and I'd love to be, but I freely admit that it's been a while since I've looked into it.
That made it in the bill. People were just disappointed that the percentage wasn't higher. But that's a sideshow to the essential three reforms. All together now...
A) The dreaded individual mandate
B) The beloved community rating, ban on remissions and exchanges
C) The hippie socialist subsidies for the poor
In a nutshell, what we want to do is make it so that insurance companies stop cherry picking people or rescinding coverage when people get sick. So we do part B, saying that every insurance company has to offer the same plan to anybody in a state for the same price. They are allowed to slightly modify the plan based on three and only three factors (age, location and smoker/non-smoker) and can only do so according to certain set parameters. Companies that insure lots of people who have pre-existing conditions get subsidies paid by the companies that insure few people with pre-existing coverage. Insurance plans are required to meet certain minimums for things like affordability, percentage of overhead spent on medical costs and coverage or else federal regulations kick in. We all celebrate because everybody has a right to buy insurance at a fair rate. And the law states that every state needs to have at least some number (I think three?) plans available on it's "exchange", or the state has to start offering a state run plan that meets certain guidelines. If the state doesn't, the federal government will step in and do so (nearly every state is taking steps to avoid that).
But there is a problem. This system creates an incentive to not buy insurance until you get sick because you can buy it then at the same price. But if nobody buys insurance until they are sick, the price of insurance skyrockets because the average insurance buyer is sicker. There is a lot of ways to fix this, but the one that leads to the most efficient system is part A, the dreaded individual mandate. Everybody has to buy insurance or they pay a tax penalty. There are exemptions possible on grounds of religion or poverty. This system has been tried in Massachusetts and abroad and results in high rates of insurance coverage.
Some people can't afford insurance though. The poorest will be covered by Medicaid but there are some above the Medicaid level for whom insurance will be a big financial burden. So that's where C comes in, subsidies to offset some of that burden. These subsidies are paid for by a bit under 800 billion dollars in taxes levied over the next 10 years. These taxes are levied on various stuff that drives up the cost of healthcare in this country.
There is a bunch of other stuff in there too. Programs to help hospitals and doctors move to more efficient record keeping (my dad is convinced that is the most important thing but it's pretty small fry compared to the other stuff). Various programs to try out different models of non-profits in different areas. Research into medical efficiency. Publication of health information by every restaurant chain with more then 50 franchises. Kids can stay on their parents plans 'till 26. Literally hundreds of other small things, they took the kitchen sink approach.
So basically you've got this huge law that does tons of stuff but it relies on one unpopular provision, the individual mandate. It isn't necessary per-se, but it is the most efficient solution and best for us all in the long run. But it is completely worth it because it gives us the freedom to actually fix the health insurance marketplace. Insurance providers won't be able to compete by cherry-picking customers and denying coverage anymore. The only way for them to compete will be to compete at providing care and attracting customers. In the long run, a market that actually works is going to provide compounding benefits. A big company friendly marketplace is still better for the little guy then a fundamentally broken marketplace.
All this stuff was in the news for over a year during the ACA debate. It amazes me how few people understand what the heck the bill was.
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