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What is the Affordable Care Act?

In 2010, the Obama Administration successfully passed the ACA (Obamacare). This sweeping legislation comprises two separate bills: The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. The two bills collectively sought to accomplish two overarching goals: increase the number of U.S. residents with health insurance plans and reduce healthcare-related costs affecting both customers and the federal government.

In 2013, one year before the Affordable Care Act went into full effect, roughly 15% of the population was uninsured, and as many as 32 million United States residents were unable to obtain coverage for different reasons (like pre-existing conditions). The Affordable Care Act became effective in January 2014; by the end of 2016, the rate of uninsured U.S. residents had dropped to 10.9%. The Congressional Budget Office (CBO) estimated that the ACA would aid in reducing the national deficit by as much as $100 billion over the next decade.

Coverage Highlights Under the Affordable Care Act

Under the Affordable Care Act, health insurance carriers are required to grant the following provisions for all policyholders.

• Young adult coverage

All people under the age of 26 are qualified to receive health insurance under their parents’ individual or employer-sponsored coverage policy. This rule applies to people living in all states, irrespective of whether the child is married, attending a higher-learning institution, eligible for employer-based insurance, or otherwise able to obtain coverage beyond their parents’ health insurance plans.

• Medicaid or CHIP Expansion

One specific goal of the Affordable Care Act is to expand Medicaid and the Children’s Health Insurance Program (CHIP) to offer coverage for millions of uninsured, low-income American families. The original intention of the Affordable Care Act was to cover any individual under the age of 65 who earns at or below 138% of the Federal Poverty Level (FPL) through an expansion of state-sponsored Medicaid programs.

For the first time, low-income persons who do not have children were to also qualify for Medicaid. Like other uninsured persons, low-income men and women who are eligible for Medicaid are free to browse different coverage options utilizing the ACA Healthcare Exchange.

• Subsidized Coverage

Because health insurance mandated by the ACA might cause individuals and households to incur extra expenses beyond their means, the federal government is subsidizing individuals for health coverage if their annual income falls below a certain threshold. Customers who earn less than 400% of the FPL (roughly $48,000 per year for people and $98,000 for a four-member household) eligible for this subsidy.

• Customer Protection

Policy-holders and health insurance companies have fought a long-standing battle concerning health conditions that prompt providers to drop coverage to beneficiaries. Now, under the Affordable Care Act:

• Policyholders cannot be denied coverage because of a pre-existing condition, like permanent disability or chronic illness. Insurance fraud is the onlycase in which a person may be denied coverage. Moreover, providers cannot charge higher premiums for women or individuals facing chronic health problems.
• Plans mustcomprise free preventive services, and insurance providers cannot impose limitations on ‘Essential Health Benefits,’ like screenings and preventive treatments that reduce the risk of cancer and other diseases.
• Insurers who spend less than 80% of premium revenue on medical services must rebate their policyholders’ coverage. This is called the’ 80-20 Rule.’
• Group health insurance policies must kick in for all employees within 90 days or less from when they become qualified for this coverage.

Understanding the Affordable Care Act Health Insurance Marketplace

In an effort to maximize enrollment and ease the process by which people and business owners buy health coverage, the federal government created an online health insurance marketplace. Health insurance providers who list insurance policies on the website pay a small fee in exchange for increased visibility in the marketplace.

It should be noted that persons who meet any of the criteria listed above may opt to obtain additional coverage from a provider on the marketplace. They can also choose out of their existing plan to receive exclusive coverage from a marketplace insurer.

Individuals who want or would like to browse for health insurance plans listed on the marketplace must sign up for coverage within the Affordable Care Act Open Enrollment Period.

Resources and References:

• Gallup Report on Number of Uninsured Americans
• Children’s Health Insurance Program