Expanded Access to Health Care


The Affordable Care Act (ACA) is a comprehensive law enacted in 2010 that significantly reformed public and private health insurance. It has significantly increased access to affordable health insurance, including for adults age 50–64, through private health insurance and Medicaid expansion. The ACA, as interpreted by the U.S. Supreme Court, gives state Medicaid programs the option to cover uninsured adults age 18–65 with incomes up to 138 percent of the federal poverty level. 

Under the ACA, state and federal insurance marketplaces now provide individuals and small businesses with new health care coverage options. To help make coverage sold through marketplaces affordable, federal premium tax credits and cost-sharing subsidies are available for eligible individuals and families. To qualify, they must have incomes between 100 and 400 percent of the federal poverty level. Under two new federal laws—the American Rescue Plan of 2021 and the Inflation Reduction Act of 2022—people with incomes above 400 percent of the federal poverty level are also eligible to receive premium tax credits through 2025 if the cost of health coverage exceeds 8.5 percent of their annual income. 

Transitions to Medicare: Subsidies for coverage through health insurance marketplaces do not extend to people eligible for Medicare. It is critical that people moving from subsidized marketplace coverage to age-related Medicare eligibility (at age 65) have information about available resources. Unless a clear process is in place for people transitioning from subsidized coverage to Medicare, those receiving subsidies will be at risk for the full cost of their coverage. They may also face penalties if they do not enroll in Medicare when they become eligible. 

Financing: It is important that all the mechanisms and programs that were part of ACA reforms be adequately financed over the short and long term. For instance, revenues will be required to finance subsidies in the exchanges, fund the Medicaid expansion, implement other reforms, and do necessary outreach. The financing comes from a combination of savings due to the slower growth of Medicare costs and revenue provisions. The additional revenues come from a number of sources, including changes to individuals’ tax deduction for health care expenses, increases in the Medicare payroll tax for workers high incomes, a tax on net investment income for taxpayers with high incomes, fees on segments of the health industry, and a limit on contributions to flexible spending accounts. 

State innovation waivers: Under the ACA, states may apply for waivers of select ACA provisions to better meet state needs. This includes allowing states to offer innovative coverage reforms. Waivers are permitted for up to five years, but states can request an extension. To be approved, waiver programs must safeguard the ACA’s existing coverage, affordability, and quality-of-care provisions. 

States can apply to waive one or more of the following provisions: 

  • requirements related to qualified health plans (including the “essential health benefits” package), 
  • marketplaces, 
  • cost-sharing reductions, 
  • refundable tax credits, 
  • the individual minimum coverage requirement, and 
  • the employer shared responsibility requirement. 

The law requires transparency of the waiver application process, periodic state reporting on waiver program implementation, and program evaluation. The law also establishes criteria against which requests for waiving ACA coverage provisions must be assessed. 

States can fund their waiver programs, within statutory limits, by drawing on federal funding that otherwise would have been used for premium tax credits, cost-reduction payments, and small-business tax credits. States can submit a single application for a waiver of ACA requirements and a waiver of Medicare, Medicaid, and the Children’s Health Insurance Program requirements, as well as any other federal law relating to the provision of health care items or services. 

For further information on health care coverage, see the following Policy Book sections: 

For discussion of access to care, see this chapter’s section Individual- and Employment-Based Group Plans

For AARP principles governing health care reform, see the AARP Health Principles, as well as additional policy in Taxation and Long-Term Services and Supports

For more on health care financing, see Taxation of In-Kind Benefits, as well as the following sections in this chapter, Individual- and Employment-Based Group Plans, and Retiree Health Coverage




Federal and state policymakers should continue to enact health care reforms that achieve access to health care and provide adequate protection against health care costs. 

Any reform efforts should build upon the goals and policies enacted in the Affordable Care Act (ACA) to improve access to adequate and affordable coverage, including those most likely to be uninsured: people with lower incomes, racial and ethnic groups facing greater coverage disparities, and people in rural areas. 

Reform strategies to improve access may include: 

  • opening existing public-health insurance programs (e.g., Medicare, Medicaid, and public employee benefit plans) or new public insurance programs to additional groups of uninsured people with coverage available on a buy-in basis or, depending on income, through the use of subsidies; 
  • improving the ability of health insurance exchanges to expand access to affordable and portable coverage (available to individuals and employers); 
  • subsidizing through risk mitigation programs a portion of high health care costs insured by private plans to lower consumer premiums and health care costs; 
  • expanding subsidies for the purchase of private coverage (e.g., through the tax system) or cost-sharing assistance for those who otherwise could not afford it; 
  • encouraging employers to offer health insurance to employees or to contribute to the cost of the health care system; 
  • encouraging individuals to enroll in available health coverage options; and 
  • continuing group health coverage at group rates for people whose access to group coverage is ending. 

States should pursue opportunities to increase enrollment in Medicaid and low-or-no-cost coverage in marketplace plans. For example, several states have adopted “Easy Enrollment,” which allows tax filers to opt in to receive eligibility information and an opportunity to enroll. 

States should use their oversight authority to promote transparency, oversight, and safeguards that protect enrollees from unexpected costs. 

Individual mandates

Federal or state health coverage mandates should expand insurance coverage and reduce health insurance costs across broad populations. Policymakers should ensure any such stipulation for individuals also sets requirements for employers and the government. They should bear their fair share of financial responsibility for health coverage, provide a health care safety net, or both. States and the federal government should ensure that options for adequate coverage are both available and affordable (to prevent people from being unable to afford care despite their coverage). Penalties should not be imposed on those who cannot afford coverage. 

Transitions to Medicare

Federal policymakers should require timely, clear notice to people insured through the health insurance marketplace who receive subsidies and are approaching Medicare eligibility. The notice must inform them that their subsidies will end when they are eligible for Medicare. It should also explain the process for making a smooth transition to Medicare before those subsidies end (see also this chapter’s section on Medicare). 

Access and buy-in to Medicare or federal coverage for pre-Medicare older adults

Proposals to extend Medicare or other federal coverage to older adults who are not yet eligible for Medicare should: 

  • include sufficient subsidies to make coverage affordable to individuals with low incomes, 
  • not affect the financial stability of Medicare or other federal programs as currently configured, and 
  • maintain at least the current level of coverage for workers. 

Private-market reform

Any reforms that expand private coverage must ensure that affordable and adequate coverage is accessible to all individuals targeted by the expansion, regardless of health or age. Market reforms were a critical component of the ACA’s coverage expansion (see also this chapter’s section Individual- and Employment-Based Group Plans). 

Tax policy

Tax policies relating to health coverage, health savings, and health spending should be evaluated in the context of fiscal and health policy. This should include objectives, priorities, and equity. 

Tax incentives to support the purchase of private health coverage should: 

  • give priority to groups that are currently without coverage and are not benefiting from current tax incentives; 
  • adjust incentives to recognize the high cost of private-market coverage for people who are older, have health problems or histories of poor health, and have low incomes; 
  • include assistance for those who earn too little to pay taxes and who may have insufficient resources to pay premiums out of pocket during the tax year; 
  • guarantee access to policies in the private market that offer adequate coverage; 
  • not single out one type of product; and 
  • conform to AARP’s taxation principles. 


Sources of financing for health care reform should be broad-based, stable, capable of growing with enrollment, progressive, and consistent with furthering public-health objectives. 

State innovation waivers

All consumers should receive coverage and care that is at least as good as that required for policies offered through health care exchanges. 

State efforts to innovate and improve upon the ACA to expand and improve coverage should be supported. At the same time, approved state innovation waivers should ensure that consumers can access coverage and care that is at least as good as that required for policies offered without waivers. 

Federal and state health coverage expansion reforms should apply uniformly to all insurers and self-insured plans in a particular market to ensure a level playing field. They should cover all individual, small-group, and large-group purchasers. Associations, multiple employer welfare arrangements, and similar nontraditional pools should be subject to the same rules as the rest of the market. Any expansions of allowable insurance arrangements designed to enhance access to coverage and plan choice should also be subject to those same rules. This includes association health plans, health insurance sales across state lines, or other arrangements. 

Applications must comply with the coverage, quality, and affordability requirements established by Section 1332 of the ACA. In order to qualify for a State Innovation Waiver, the state application must establish that its reform plan would provide coverage that: 

  • is at least as comprehensive and affordable as ACA coverage, 
  • covers at least as many residents as the ACA would have covered, and 
  • will not increase the federal deficit. 

Budget neutrality should not be achieved by weakening existing coverage requirements. 

Federal and state governments must comply with the public accountability and transparency requirements established by Section 1332 of the ACA. 

A state’s public notice and comment process, the post-award public forum, and the draft and final annual reports (which track affordability, comprehensiveness of coverage, the number of people covered, and the impact on the federal deficit) must be published on the state’s public website. 

Waiver applications that integrate waiving ACA provisions under Section 1332 with waiving Medicare and Medicaid provisions must align with the relevant AARP policies for those programs.