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Wednesday, July 25, 2012

ACA: A Brief Overview of the Law, Implementation, and Legal Challenges

C. Stephen Redhead, Coordinator
Specialist in Health Policy

Hinda Chaikind
Section Research Manager

Bernadette Fernandez
Specialist in Health Care Financing

Jennifer Staman
Legislative Attorney

In March 2010, the 111th Congress passed health reform legislation, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA; P.L. 111-152) and other laws. ACA increases access to health insurance coverage, expands federal private health insurance market requirements, and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance. It also expands Medicaid coverage. The costs to the federal government of expanding health insurance and Medicaid coverage are projected to be offset by increased taxes and revenues and reduced spending on Medicare and other federal health programs. Implementation of ACA, which began upon the law’s enactment and is scheduled to unfold over the next few years, involves all the major health care stakeholders, including the federal and state governments, as well as employers, insurers, and health care providers.

Following the enactment of ACA, individuals, states, and other entities challenged various provisions of ACA on constitutional grounds. Many of these suits addressed ACA’s requirement for individuals to have health insurance (i.e., the individual mandate), and claimed that it is beyond the scope of Congress’s enumerated powers. The expansion of the Medicaid program was also challenged, as state plaintiffs contended that the expansion impermissibly infringes upon states’ rights, coercing them into accepting onerous conditions in exchange for federal funds.

On June 28, 2012, the Supreme Court issued its decision in National Federation of Independent Business v. Sebelius, finding that the individual mandate is a constitutional exercise of Congress’s authority to levy taxes. However, the Court held that it was not a valid exercise of Congress’s power under the Commerce Clause or the Necessary and Proper Clause. With regard to the Medicaid expansion provision, the Court further held that the federal government cannot terminate current Medicaid program federal matching funds if a state refuses to expand its Medicaid program. If a state accepts the new ACA Medicaid expansion funds, it must abide by the new expansion coverage rules, but, based on the Court’s opinion, it appears that a state can refuse to participate in the expansion without losing any of its current federal Medicaid matching funds. All other provisions of ACA, as amended by HCERA, remain intact.

This report provides a brief summary of major ACA provisions, implementation and oversight activities, and current legal challenges. For more detailed information on ACA’s provisions, CRS has produced a series of more comprehensive reports, which are available at The information provided in these reports ranges from broad overviews of ACA provisions, such as the law’s Medicare provisions, to more narrowly focused topics, such as dependent coverage for children under age 26.

Date of Report: July 3, 2012
Number of Pages: 11
Order Number: R41664
Price: $29.95

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