Through a pragmatic mix of public and private financing, the new Affordable Care Act will expand health care coverage, establish health insurance market rules that protect individuals and families, and begin to transform the health care system by encouraging greater value and efficiency, says Commonwealth Fund president Karen Davis in a special report on the potential impact of the new law. Davis also discusses the challenges that must be met as the law's provisions are implemented over the coming months and years, including the need for employers to maintain and expand their commitment to financing coverage for workers, the need for payers and providers to implement new delivery system models that yield better care at lower cost, and the need for adequate resources throughout the implementation period.