Overview of Private Health Insurance Provisions in the Patient Protection and Affordable Care Act (ACA)

Annie L. Mach
Analyst in Health Care Financing

Private health insurance (PHI) is the predominate form of health insurance coverage in the United States, covering about two-thirds of Americans in 2011. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) includes provisions that restructure the private health insurance market by (1) implementing market reforms that impose requirements on private health insurance plans and sponsors of health insurance (e.g., employers); (2) creating marketplaces, “exchanges,” where individuals can shop for and purchase health plans that meet or exceed federal standards; (3) providing financial assistance to qualified individuals who purchase health plans through an exchange; (4) establishing an individual mandate that requires most individuals to either maintain health insurance coverage or pay a penalty; and (5) assessing penalties on certain employers that either do not provide health insurance or provide health insurance that is “unaffordable” or does not provide “minimum value.”

The ACA provisions build on and modify the existing structure of the PHI market. In the PHI market, most individuals receive coverage through the group market (i.e., from an employer or association). Prior to the passage of ACA, the group market had many protections for individuals, such as limiting pre-existing condition exclusions and prohibiting discrimination based on health status. However, access to coverage in the group market could be different depending on the size of the group. In general, the size and composition of a group can affect both an organization’s decision to offer coverage and the cost of that coverage to an enrollee. As a result, smaller groups are less likely to offer coverage than larger groups, and members of smaller groups are less likely to enroll in the coverage than members of larger groups. Some individuals purchase nongroup, or individual, coverage in the PHI market. Prior to the passage of ACA, nongroup coverage typically provided fewer protections than group coverage. For example, subject to state law, insurers offering coverage in the nongroup market could deny coverage to applicants who had pre-existing conditions or a history of health problems.

The PHI market reform provisions in ACA affect health insurance offered to groups and individuals, impose requirements on sponsors of coverage, and, collectively, establish minimum requirements with respect to access to coverage, premiums, benefits, cost-sharing, and consumer protections. Some market reforms are already in effect, such as the requirement for certain health plans to provide dependent coverage up to age 26. Beginning in 2014, when more of the market reforms take effect, certain health plans will have to offer a somewhat standardized set of benefits, called the essential health benefits (EHB), and certain health plans will have to accept all individuals who apply for coverage, regardless of health status and pre-existing conditions.

ACA’s new marketplaces, the exchanges, must be operational in every state in time for the first exchange open season, which begins October 1, 2013. Coverage under exchange plans will begin as early as January 1, 2014. In addition to individuals shopping for and obtaining nongroup health insurance coverage through exchanges, some individuals may be eligible to receive financial assistance for the cost of that coverage in the form of premium tax credits and cost-sharing subsidies. Small employers will be able to purchase coverage to offer to their employees through small business health options program (SHOP) exchanges; however, ACA limits the SHOPs to small employers with either 50 or fewer employees or 100 or fewer employees, at state option.

Another ACA requirement is that most individuals must either maintain health insurance coverage or pay a penalty. The “individual mandate” goes into effect in 2014. To comply with the mandate, most individuals will have to maintain “minimum essential coverage,” which includes coverage obtained through exchanges, employer-sponsored insurance, nongroup coverage, and coverage from a federal program such as Medicare and Medicaid. Certain individuals are exempt from the individual mandate penalty, such as those with qualifying religious exemptions and those whose household income is less than the filing threshold for federal income taxes for the applicable tax year.

Employers play an important role in providing coverage in the existing PHI market, and ACA includes two provisions that could influence an employer’s decision to offer health benefits. First, certain small employers may be eligible to receive tax credits. To be eligible, small employers cannot have more than 25 full-time equivalent employees and must contribute a uniform percentage of at least 50% to their employees’ health insurance coverage. The tax credit became available in 2010, and it is available for a total of six years. Second, beginning in 2014, ACA imposes penalties on employers with at least 50 full-time equivalent employees, if one or more of their full-time employees obtain a premium tax credit through an exchange. Individuals who meet certain requirements may be eligible for a premium tax credit if their employer does not offer health insurance coverage, or if their employer offers coverage that is “unaffordable” or does not provide “minimum value,” as defined by ACA.

This report provides an overview of ACA provisions that affect the PHI market. In general, the ACA provisions build on or modify the existing structure of the PHI market, and a short background on the existing structure is included in the report. While this report provides a broad overview of the PHI provisions in ACA, the reader may be interested in more in-depth discussions on specific aspects of the law. Appendix C directs the reader to a collection of CRS reports that provide such in-depth analysis. Additionally, a table showing key policy staff for each provision is included at the end of the report.

Date of Report: April 23, 2013
Number of Pages: 30
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Prevalence of Mental Illness in the United States: Data Sources and Estimates

Erin Bagalman
Analyst in Health Policy

Angela Napili
Information Research Specialist

Determining how many people have a mental illness can be difficult, and prevalence estimates vary. While numerous surveys include questions related to mental illness, few provide prevalence estimates of diagnosable mental illness (e.g., major depressive disorder as opposed to feeling depressed, or generalized anxiety disorder as opposed to feeling anxious), and fewer still provide national prevalence estimates of diagnosable mental illness. This report briefly describes the methodology and results of three large surveys (funded in whole or in part by the U.S. Department of Health and Human Services) that provide national prevalence estimates of diagnosable mental illness: the National Comorbidity Survey Replication (NCS-R), the National Comorbidity Survey Replication Adolescent Supplement (NCS-A), and the National Survey on Drug Use and Health (NSDUH). The NCS-R and the NCS-A have the advantage of identifying specific mental illnesses, but they are a decade old. The NSDUH does not identify specific mental illnesses, but it has the advantage of being conducted annually.

Between February 2001 and April 2003, NCS-R staff interviewed more than 9,000 adults aged 18 or older. Analyses of NCS-R data have yielded different prevalence estimates. One analysis of NCS-R data estimated that 26.2% of adults had a mental illness within a 12-month period (hereinafter called 12-month prevalence). Another analysis of NCS-R data estimated the 12- month prevalence of mental illness to be 32.4% among adults. A third analysis of NCS-R data estimated the 12-month prevalence of mental illness excluding substance use disorders to be 24.8% among adults. The 12-month prevalence of serious mental illness was estimated to be 5.8% among adults, based on NCS-R data.

Between February 2001 and January 2004, NCS-A staff interviewed more than 10,000 adolescents aged 13 to 17. Using NCS-A data, researchers estimated the 12-month prevalence of mental illness to be 40.3% among adolescents. Some have suggested that the current approach to diagnosing mental illness identifies people who should not be considered mentally ill. The 12- month prevalence of serious mental illness was estimated to be 8.0% among adolescents, based on NCS-A data.

The National Survey on Drug Use and Health (NSDUH) is an annual survey of approximately 70,000 adults and adolescents aged 12 years or older in the United States. According to the 2011 NSDUH, the estimated 12-month prevalence of mental illness excluding substance use disorders was 19.6% among adults aged 18 or older; this estimate was stable between 2008 and 2011. The estimated 12-month prevalence of serious mental illness (excluding substance use disorders) was 5.0% among adults. Although the NSDUH collects information related to mental illness (e.g., symptoms of depression) from adolescents aged 12 to 17, it does not produce estimates of mental illness for that population.

The prevalence estimates discussed in this report may raise questions for Congress. Should federal mental health policy focus on adults or adolescents with any mental illness (including some whose mental illnesses may be mild and even transient) or on those with serious mental illness? Should substance use disorders be addressed through the same policies as other mental illnesses? Members of Congress may approach mental health policy differently depending in part on how they answer such questions.


Date of Report: April 24, 2013
Number of Pages: 11
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H.R. 1549: Helping Sick Americans Now Act

Sarah A. Lister
Specialist in Public Health and Epidemiology

Bernadette Fernandez
Specialist in Health Care Financing

Annie L. Mach
Analyst in Health Care Financing

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. Among other provisions, ACA increases access to health insurance, expands private health insurance requirements regarding coverage and benefits, and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance.1 Many of ACA’s insurance market reforms are already in effect. Remaining reforms become effective on January 1, 2014. At that time, coverage will be available on a guaranteed issue basis, pre-existing condition exclusions will be prohibited,2 and states or the federal government will be required to establish exchanges (structured marketplaces for the sale and purchase of health insurance3).

In order to help individuals with pre-existing conditions obtain health insurance coverage until 2014, ACA established a temporary high-risk pool (HRP) program. Individuals who have been uninsured for at least six months, have been denied coverage because of a pre-existing condition, and are U.S. citizens (or legally residing in the United States) are eligible for coverage under the ACA HRP, known as the Pre-Existing Condition Insurance Plan (PCIP). States may run their own programs or have the Department of Health and Human Services (HHS) do so. ACA provided a $5 billion appropriation to pay claims and administrative costs in excess of premiums. Although national enrollment in PCIP has been lower than expected, costs per participant have exceeded initial estimates. In February 2013, the Centers for Medicare & Medicaid Services (CMS) advised PCIP contractors to suspend program enrollment, in order that CMS would have the funds needed to cover the costs of those already enrolled through the program’s end on January 1, 2014.4 

ACA also authorizes a number of public health activities aimed, for example, at preventing common chronic diseases such as heart disease and cancer; addressing racial, ethnic, and gender disparities in health; expanding the numbers of primary care providers; and other purposes.5 In addition, ACA appropriates billions of dollars to support new or existing grant programs and other activities, such as PCIP.6 ACA also established the Prevention and Public Health Fund (PPHF) and provided it with a permanent annual appropriation. PPHF funds are to be transferred by the HHS Secretary “for prevention, wellness, and public health activities.... ”7 The PPHF receives an appropriation of $1 billion per fiscal year from FY2013 through FY2017, after which annual appropriations increase incrementally, becoming $2 billion per fiscal year for FY2022 and thereafter. PPHF amounts for FY2013 through FY2021 are subject to sequestration under the Budget Control Act (BCA, P.L. 112-25).8 

On April 17, 2013, the House Committee on Energy and Commerce reported H.R. 1549, the Helping Sick Americans Now Act. H.R. 1549 would (1) replenish the PCIP account with more than $3 billion transferred from the PPHF, (2) re-open PCIP enrollment, and (3) eliminate the PCIP eligibility requirement of a six-month uninsured period. As discussed in this report, the bill’s proposed PPHF transfer appears sufficient to sustain PCIP through its sunset date. However, the loss of PPHF funds for several fiscal years could likely reduce total spending in a number of HHS accounts, particularly at the Centers for Disease Control and Prevention (CDC), to, or below, pre-ACA program levels. (See the later section of this report, “Annual Appropriations”.)

This report describes provisions in H.R. 1549, and provides overviews of PCIP and the PPHF. Appendix A presents current law (ACA as amended) authorizing and appropriating PCIP Appendix B presents current law (ACA as amended) authorizing and appropriating the PPHF.

Date of Report: April 25, 2013
Number of Pages: 14
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TRICARE and VA Health Care: Impact of the Patient Protection and Affordable Care Act (ACA)

Sidath Viranga Panangala
Specialist in Veterans Policy


Don J. Jansen
Analyst in Defense Health Care Policy

The 111th Congress passed, and the President signed into law, the Patient Protection and Affordable Care Act (P.L. 111-148; ACA), which was later amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152; HCERA), and is hereafter referred to as ACA. In general, ACA did not make any significant changes to the Department of Defense (DOD) TRICARE program or to the Department of Veterans Affairs (VA) health care system. However, many have sought clarification as to whether certain provisions in ACA, such as a mandate for most individuals to have health insurance, or extending dependent coverage up to age 26, would apply to TRICARE and VA health care beneficiaries.

To address some of these concerns, Congress has introduced and/or enacted legislation. The TRICARE Affirmation Act (P.L. 111-159), signed into law on April 26, 2010, affirms that TRICARE satisfies the minimum acceptable coverage requirement in ACA. Similarly, P.L. 111- 173, signed into law on May 27, 2010, clarifies that the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), Spina Bifida Health Care Program, and the Children of Women Vietnam Veterans Health Care Program meet the “minimum essential coverage” requirement under ACA. TRICARE coverage of children was extended to age 26 by the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (P.L. 111-383).

ACA requires that if a health insurance plan provides for dependent coverage of children, the plan must continue to make such coverage available for an adult child until age 26. This requirement relating to coverage of adult children took effect for the plan years beginning on or after September 23, 2010. Under ACA, both married and unmarried children qualify for this coverage. The authorizing statute for CHAMPVA currently does not conform to this ACA requirement. Furthermore, although the TRICARE authorizing statute has been amended to provide for coverage of children until age 26, the coverage provided by the new legislation differs from that required by ACA in some important ways. To address CHAMPVA’s nonconformance with ACA’s requirements, the CHAMPVA Children’s Protection Act (H.R. 288) and a similar measure (S. 325) have been introduced in the 113th Congress.

This report addresses key questions concerning how ACA affects TRICARE and VA health care.


Date of Report: April 22, 2013
Number of Pages: 12
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