BHA FPX 2003 Assessment 1 Reforming U.S. Healthcare: The ACA and MACRA

Reforming U.S. Healthcare: The ACA and MACRA

Student Name

Capella University

BHA-FPX2003

Prof Name

Submission Date

The individual mandate, expansion of Medicaid eligibility and core benefits, along with cost containment, expanded insurance coverage, and improved health care standards, in a dramatic way with the passage of the Affordable Care Act (ACA) in 2010. Five years later, the Medicare Access and CHIP Reauthorization Act (MACRA) restructured Medicare payments to focus more on value, with the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs) (Gettel et al., 2022).

The paper documents the evolution of these laws in terms of their coverage expansion, synchronization of standardized quality measures, and links between financial incentives and patient outcomes. They are significant changes that have embedded accountability, cost control, and a focus on patients into the very fabric of health care delivery in the United States.

Evolution and Explanation

Enacted in 2010 during President Obama’s administration, the ACA fundamentally overhauled U.S. healthcare by striving to widen insurance participation, rein in escalating medical expenditures, and raise the bar on treatment standards. These achievements were encouraged by, among other provisions, individual coverage, increasing Medicaid eligibility, and all plans covering essential health services (Ortaliza & Cox, 2024). One of the ACA’s greatest achievements was the increased access to healthcare. Initially, the individual mandate required most Americans to obtain health insurance coverage or pay a penalty, which would create a more robust insurance market and stabilize insurance costs.

Although this mandate was eliminated in 2019, it first decreased the number of uninsured citizens. Another major factor was the expansion of Medicaid, which would cover anyone with income of up to 138 percent of the federal poverty level. By 2024, there was significant growth in coverage across more than 40 states, particularly in providing coverage for low-income families and minorities, including in rural areas (Ortaliza & Cox, 2024). Also, the ACA created state and federal health insurance marketplaces and insurance products that would offer subsidized coverage that would be more available and affordable for millions.

On the issue of improving the quality of care, the ACA made sure that all ACA-compliant plans include certain “essential benefits,” such as preventive care, maternity care, mental health services, and prescription drugs. These benefits are uniform and ensure better comprehensive and equitable treatment. Preventive care was also routinely provided without the need for a patient to pay anything out-of-pocket, which helps to promote early care and ongoing cost savings. Furthermore, with the ACA came a new focus on value instead of volume care – value-based care models, including Accountable Care Organizations (ACOs) and the Hospital Readmissions Reduction Program (HRRP) (Maddox, 2024).

These efforts enhanced care coordination and lowered hospital readmission rates. The Medicare Access and CHIP Reauthorization Act of 2015 was a paradigm shift in the way that Medicare pays for physicians and other health care providers for services it provides and will pay for—from volume-based, fee-for-service to quality- and value-based payment systems. Healthcare providers have two primary payment tracks according to MACRA: The Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs) (Gettel et al., 2022). This design was created to pay clinicians for giving high-quality, coordinated care rather than for simply doing more services.

Clinicians who participate in MIPS are scored in four areas: quality, cost, improvement activities, and interoperability, and these scores dictate their payments yearly. Early analysis indicates that there have been some positive trends among MIPS participants, such as small gains in preventive screening participation and eHR use, but some believe that the heavy reporting burden will keep smaller or less well-funded practices from participating (Khullar et al., 2021). Unlike APMs, however, those in APMs (like ACOs or bundled payment schemes) take on greater financial risk and have the potential to earn greater rewards if they achieve certain set levels of quality and spending. Indeed, providers often report better results in APMs, such as reduced hospital readmissions and lower total healthcare expenses, according to Ying et al. (2024).
If MACRA is going to survive, it will have to carefully balance the documentation requirements with the rewards. Its payment changes have fostered more patient-centered services, but ongoing fine-tuning of performance measures is necessary to pick up real health improvements without putting too much strain on providers. However, as value-based care models evolve, MACRA’s structure is a solid base to properly align payment incentives with efficient, quality Medicare services. The U.S. healthcare landscape has been transformed in recent years with new landmark legislation such as the ACA and MACRA, which aim to increase coverage, quality, and efficiency in the sector.

The ACA has accomplished this by including many vulnerable groups in Medicaid through expansion of the program, by implementing the individual mandate (2010–2019), and by defining essential health benefits, thereby reducing the number of uninsured to approximately 8.3% in 2021 from roughly 15.5% in 2010 (Lukens, 2024). The law also ensured that care quality would improve by mandating no‐cost preventive services, establishing a standard benefit package for all services, such as mental health and maternity benefits, and increasing the number of individuals who receive screenings.

The law also raised the quality of care, with increased uptake of screening and a reduced incidence of hospital‐acquired complications (Neiman et al., 2021), including for mental health and maternity services. While some have been able to avoid financial devastation by having subsidies cover their costs, almost half of Americans with insurance still worry about the premium and out‐of‐pocket expenses, highlighting the fact that affordability is a persistent problem.

The MACRA of 2015 combined and simplified various quality-reporting efforts into the Quality Payment Program (QPP) (Latino & Kapoor, 2021). Currently, clinicians are choosing between the two types of reimbursement, MIPS and APM, which both pay for performance on the standardized quality, cost, interoperability, and improvement activity measures. Previous studies found that participation in APM under MACRA has correlated with lower readmissions and Medicare expenditures; the participation has also been linked with modest increases in preventive‐care services and health IT use under MIPS, especially in ACOs (Abodunde et al., 2021).

Discussion of Findings

Building on these basic changes, ACA and MACRA have now directly influenced later Healthcare Quality Initiative legislation through introducing value-based incentives, standardized measures, and financial accountability into federal policy. In the wake of the ACA, delivery system changes like the HRRP, bundled payment initiatives and the Center for Medicare & Medicaid Innovation set the stage for outcome-based, not volume-based, payment (Maddox, 2024).

The ACA provided a proof of concept to both reduce costs and enhance patient safety through transparent, risk-adjusted quality measures, while incentivizing coordinated, episode-based care and punishing hospitals for readmission rates that are too high (Kim et al., 2022; Lewis et al., 2022). MACRA was able to integrate and rationalize these previous initiatives in the Quality Payment Program, which mandates clinicians to opt into either MIPS or APMs (Gettel et al., 2022; Ying et al., 2024). By doing so, MACRA established a common framework for a group of quality, cost, interoperability, and improvement activities metrics, with which the providers of all specialties would be held to the same standard.

Later Healthcare Quality Initiative legislation has been spurred by these innovations, including the now-commonplace inclusion of required reporting, public scorecards, and tiered payment adjustments based on ACA and MACRA provisions. Readmission rates have further decreased, preventive screening has increased, and care coordination has improved within Accountable Care Organizations (ACOs) (Hammond et al., 2025).

There are also some problems that need to be addressed: some smaller practices may find reporting burdensome, and metric fatigue can make it difficult to keep track of patient-centered outcomes (Khullar et al, 2021). Moving forward, incentive alignment with relevant patient-reported metrics and improved risk-adjustment practices will be crucial in driving improvements in quality and access throughout the U.S. health care system.

Conclusion

ACA’s mandate, Medicaid expansion, and essential benefits reduced uninsured rates, created uniform care, and enhanced early quality and costs. The legislation on Healthcare Quality Initiative had its origins in these laws, which include metrics, public reporting, and payment models based on risk. Outcomes include reduced readmission rates and increased screening rates for preventive services; reporting burdens remain. ACA and MACRA have driven U.S. healthcare toward improving the efficiency, accountability and patient-centeredness of care.