Affordable Health Care Act

Also known as Obamacare, ACA increases health insurance coverage for those who cannot afford insurance, and has brought about various reforms to the health insurance market.

The Affordable Health Care Act (ACA) is a comprehensive reform law, which was signed in 2010. The ACA is a huge step forward on the path towards a better health system reform, and additional steps will follow. Through the Affordable Care Act, patients who might have been uninsured because of a preexisting condition or restricted financial resources can secure affordable health plans via the health insurance marketplace in their state. Let us head straight into the article to learn more.

When was the Affordable Care Act passed?

The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act, and commonly known as Obamacare, is a United States federal law that was enacted by the 111th United States Congress and signed on March 23, 2010 by President Barack Obama. Along with the Health Care and Education Reconciliation Act of 2010 amendment, it embodies the United State’s healthcare system’s most essential regulatory overhaul and increase in coverage since the enactment of Medicare and Medicaid in 1965.

The act increased the eligibility for Medicaid, gave rise to health insurance exchanges, made it essential for Americans to purchase or otherwise obtain health insurance, and prohibited insurance companies from denying coverage (or charging more) because of pre-existing conditions. It also permits children to stay on their parents’ insurance plan until the age of 26.

Recent history of the Affordable Care Act (ACA)

After President Obama’s tenure ended and he left office, the ACA had to face great opposition and some significant changes.

Trump Administration

Former President Donald Trump, on January 20, 2017, which was his first executive order after taking office, made his intention of defunding the ACA known. He stated that executive agency heads should “delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State.”This paved the way for the first phase of Republican efforts to repeal and replace the ACA.

In 2017, the government tried multiple times to repeal the law completely, but were not successful. Nevertheless, the government significantly scaled back its outreach program to assist citizens in enrolling for the ACA and cut the enrollment period in half.

There were some adjustments made to the law regarding certain objections raised by opponents, while still keeping the Marketplace open for users. For instance, in December 2017, as part of the Tax Cuts and Jobs Act (TCJA), Congress erased the penalty for not having health insurance. Beginning in the tax year 2019, the individual mandate penalty was lowered to zero dollars, essentially erasing the requirement that many Republicans had objected to and stated their concern for.

By 2018, the amount of Americans covered under the ACA had reduced to 13.8 million (from 17.4 million in 2015), as per a report from the healthcare research organization KFF. In 2021, there are 11.3 million people with plans through the ACA, but 14.8 million people newly enrolled in Medicaid through the ACA expansion.

In March 2019, House Democrats uncovered legislation to shore up the Act and extend coverage, while the Trump government stated that it would try to repeal all of the ACA. In a letter to a federal appeals court, the Justice Department said that it agreed with a federal judge in Texas, who declared the healthcare law to be unconstitutional, and stated that it will support the judgment on appeal. In November 2020, the case was heard by the Supreme Court, with a coalition of 21 lawyers defending the ACA.

Biden Administration

President Joe Biden, who helped Obama pass the law, is generally expected to put forth attempts to strengthen  the ACA during his term and veto further legislative endeavors to upset it. As well as setting up another special enrollment period, the executive request Biden endorsed on Jan. 28, 2021, additionally centered around “rules and other policies that limit American’s access to healthcare.” This executive ordering federal agencies to inspect five regions and choose whether action is required there:

  • Policies increasing the difficulty of enrolling in Medicaid and the ACA
  • Protections for people with pre-existing conditions
  • Policies undermining health insurance markets, including the Health Insurance Marketplace
  • Policies reducing affordability or financial assistance, for recipients or dependents
  • Work requirements and other limitations to access to Medicaid and the ACA

Understanding the Affordable Care Act (ACA)

The ACA was intended to decrease the expense of health care coverage inclusion for individuals who qualify. The law incorporates premium tax breaks and cost-sharing reductions to assist with bringing down costs for lower-pay people and families. Premium tax breaks bring down your health insurance each month, while cost-sharing reductions, lessen your cash based expenses for deductibles, copays, and coinsurance, along with bringing down your out-of-pocket maximum: the total sum you pay in a year for covered wellbeing costs.

All ACA-compliant health insurance plans — including each plan that is sold on the Health Insurance Marketplace — must cover certain “essential health benefits” such as:

  • Ambulatory patient services
  • Breastfeeding
  • Emergency services
  • Family planning
  • Hospitalization
  • Laboratory services
  • Mental health and substance use disorder services
  • Pregnancy, maternity, and newborn care
  • Prescription medications
  • Preventive and wellness services and chronic disease management
  • Pediatric services
  • Rehabilitative and habilitative service

As part of the American Rescue Plan of 2021, subsidies for coverage bought via healthcare.gov have been increased, and qualification for subsidies has been expanded to higher income levels.

Also, the ACA requires most insurance plans, including those sold on the Marketplace, to cover at no expense to policyholders a list of preventive administrations. These incorporate checkups, patient counselling, vaccinations, and various health screenings. It likewise permitted states that opted in to stretch out Medicaid inclusion to a more extensive range of individuals. As of June 2021, 37 states and the District of Columbia had practiced that alternative.

Consistently, there is an open enrollment period on the Health Insurance Marketplace during which individuals can purchase or switch protection plans. On the off chance that you miss this time, you cannot enroll until the next year except if you fit the bill for a special enrollment period on the grounds that your conditions change — for instance, you get married, divorce, become a parent, or lose a job that gave health care coverage inclusion.

The Patient Protection and Affordable Care Act (ACA) aims to extend health coverage to uninsured Americans, which at the time the bill was passed was estimated to number around 47 million. To accomplish this, the law expanded insurance coverage in three ways:

  • Individual Insurance Marketplaces: Online exchanges operated by individual states or by the federal government, where people and families can purchase health insurance directly from insurers. People with incomes between 100 and 400 percent of the federal poverty level are qualified for premium subsidies to help them buy coverage.
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  • Small Business Insurance Marketplaces: Online exchanges (known as Small Business Health Options or SHOP) to help firms with 50 or less employees cover their workers.
  • Medicaid Expansion: Broader Medicaid eligibility to be more inclusive of those earning up to 138 percent of the federal poverty level.

The ACA also brought about new approaches to reducing costs and improving quality, many centered around Medicare and Medicaid populations. These included reducing payments to hospitals for certain Medicare services and promoting experimentation with new payment and delivery models.

Who is eligible for the Affordable Care Act?

The Affordable Care Act (ACA) health insurance marketplace is where most people who do not have healthcare coverage through their job or a federal program, such as Medicare or Medicaid, can buy health insurance.

Obamacare offers sponsorships, otherwise called tax credits, that work on a sliding scale. They limit the sum you pay in monthly premiums to a level of your yearly pay. The vast majority are qualified for sponsorships when they acquire 400% or less of the federal poverty level. In the event that your pay falls underneath the federal neediness level, you may not meet all requirements for subsidies, yet you are bound to fit the bill for Medicaid. Medicaid is the public medical services program for low-pay people and families.

To qualify for Obamacare subsidies you must meet the following criteria:

  • You are currently living in the United States
  • You are a US citizen or legal resident
  • You are not currently incarcerated
  • Your income is no more than 400% of the federal poverty level

As per the Federal Register, the 2020 poverty level for a person is $12,760. If you are a single individual earning more than 400% of that amount ($51,040), you will most probably not be eligible for subsidies. The federal poverty level varies depending on the number of members in your household. Alaska and Hawaii have different poverty levels. Keep in mind that the Obamacare household income chart differs yearly as poverty rates are adjusted each year.

To prove your eligibility for the subsidy, you will need to give some detailed information on the application, such as:

  • Any letter or document your current plan has provided regarding renewal
  • Birth dates and home addresses for all individuals who will be applying for coverage under the plan
  • Estimated household income for 2020
  • Policy number and plan ID of your current insurance plan
  • Social Security numbers, name of employer and income information for every member of your household, even if they aren’t all applying for coverage

Who is not eligible for the Affordable Care Act?

Regardless of its objective of universal health inclusion, the ACA leaves significant quantities of Americans without admittance to protection. RAND estimates found that, of the 52 million who might have been uninsured without the ACA, roughly 33 million will become qualified for inclusion through Medicaid or the singular commercial center after the significant arrangements of the ACA produce full results. Some of these people will decide not to try out inclusion. Notwithstanding, an expected 19 million uninsured Americans will stay ineligible for Medicaid or endowments, and thus are “left behind” by the ACA. These individuals normally can be categorized as one of four gatherings:

  • Those With Higher Incomes: Those earning above 400 percent of FPL ($46,680 for an individual, $95,400 for a family of four) are not qualified for either Medicaid or marketplace tax credits. This group represents 16 percent of the ineligible, uninsured population.
  • Undocumented Immigrants: The ACA prohibits undocumented immigrants from taking part in the Medicaid expansion or receiving tax credits for marketplace plans. It is estimated that 23 percent of the uninsured who remain ineligible for public programs are undocumented immigrants.
  • Low-Income Individuals Residing in States that Don’t Expand Medicaid: In states that do not extend their Medicaid programs, there could be a coverage gap for adults with salaries below 100 percent of the poverty level, and who are not qualified for Medicaid under the state’s existing law. These individuals will remain unqualified for Medicaid, and will not be eligible for marketplace tax credits. Twenty-eight percent of the 19 million individuals remaining, or 5.3 million people, fall into this category.
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  • Individuals with “Affordable Offers” from Employers: Individual exchange tax credits are present for U.S. citizens and legal residents with salaries between 100 and 400 percent of the FPL. The tax credits cap health insurance spending as a percentage of income, up to the price of the second lowest cost silver plan available in an individual’s rating area. People are also disqualified from receiving tax credits if they are qualified for Medicaid or CHIP, or if they have an “affordable” offer of health insurance coverage from an employer. Offers are thought to be affordable if the employee’s contribution for single coverage is lower than 9.5 percent of family income. The affordability criterion is based on the cost of single coverage, even if the employee has a family.

Where to apply for the Affordable Care Act?

The best spot to begin is at healthcare.gov. That is the place where most Americans in the individual market will look for a plan. However, 11 states and the District of Columbia have their own marketplaces. Those states are: California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont and Washington. To get to your marketplace, go to healthcare.gov, click on “Get Coverage” and select your state. You will then be directed to tap on your state marketplace or to tap on “continue” to get to the federal site.

Healthcare.gov will be offline for maintenance on Sundays during open enrollment at 12 PM and early afternoon. The only special case is Sunday, Dec. 15. You can likewise call the commercial center call place at 800-318-2596 and apply via telephone. It accepts calls seven days a week, 24 hours every day. Or on the other hand you can apply face to face. Numerous non-profit and community organizations have prepared individuals, known as pilots, to assist you with applying for inclusion. You can go to localhelp.healthcare.gov, plug in your zip code, and a list of nearby navigators will pop up.

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Affordable Care Act Summary Pros and Cons

A great many Americans have benefitted by getting insurance coverage through the ACA. A significant number of these individuals were jobless or had low-paying positions. Some could not work on account of a disability or family commitments. Others could not get good health care coverage on account of a prior ailment, like a chronic illness.

The ACA has been exceptionally controversial, notwithstanding the positive results. Conservatives had a problem with the tax increments and higher insurance premiums required to be paid for Obamacare. Certain individuals in the medical services industry are condemning the extra responsibility and costs set on clinical suppliers. They additionally figure that it might affect the quality of care.

Accordingly, there are regular calls for the ACA to be revoked or updated. Here is a look at some of the pros and cons of Obamacare.

Pros

More Americans have health insurance

More than 16 million Americans received health insurance coverage in the first five years of the ACA. Young adults constitute a large percentage of these newly insured people.

Health insurance is more affordable for many people

Insurance organizations need to now spend at least 80 percent of insurance premiums on medical care and improvements. The ACA also tries to prevent insurers from making unreasonable rate increases. Insurance coverage is not free by any means, but now, individuals have a wider range of coverage options.

People with preexisting health conditions can no longer be denied coverage

A preexisting condition, for instance, cancer, made it difficult for many people to get health insurance before the ACA came into existence. Most insurance organizations would not cover treatment for these conditions. They said this was because the illness or injury happened before you were covered by their plans. Under the ACA, you cannot be denied coverage because of a pre-existing health problem.

No time limits exist on care

Before the ACA, some people with chronic health problems ran out of insurance coverage. Insurance organizations set restrictions on the amount of money they would spend on a single client. Insurance organizations can no longer maintain a preset dollar limit on the coverage they provide their  clients.

More screenings are covered

The ACA provides coverage for many screenings and preventive services. These usually have low copays or deductibles. If you are proactive in your healthcare, you can prevent or delay major health problems later. Healthier clients will lead to lower expenses over time. For instance, a diabetes screening and early treatment may help avoid expensive and debilitating treatment later. As per Dr. Christopher Lillis, an internist in Virginia and a member of Doctors for America, “The ACA is going to help all Americans have higher quality and less costly healthcare in the decades to come.”

Prescription drugs cost less

The ACA promised to make prescription drugs less expensive. Many individuals, particularly senior citizens, cannot afford all their medications. The number of prescription and generic drugs covered by the ACA is increasing every year. According to a Centers for Medicare and Medicaid Services press release from 2017, Medicare beneficiaries have saved over $26.8 billion on prescription drugs under Obamacare.

Cons

Many people have to pay higher premiums

Insurance organizations now give a wider range of advantages and cover people with preexisting conditions. This has caused premiums to rise for many people who have already had health insurance.

You can be fined if you don’t have insurance

The main objective of Obamacare is for people to be insured year round. If you are uninsured and do not get an exemption, you must pay a decent fine. Recent events have changed this fine, and starting from the tax year 2019 it has been eliminated. Some people think that it is intrusive for the government to require health insurance. ACA supporters argue that not having insurance passes your healthcare expenses on to everyone else.

Taxes are going up as a result of the ACA

Various new taxes were passed into law to help pay for the ACA, including taxes on medical device and pharmaceutical sales. Taxes were also increased for individuals with high incomes. Funding also comes from savings in Medicare payments. The rich are helping to subsidize insurance for the poor. However, some economists predict that in the long term, the ACA will help reduce the deficit and may gradually have a positive effect on the budget.

It’s best to be prepared for enrollment day

The ACA site had a great deal of technical issues when it was first dispatched. This made it hard for individuals to enroll and prompted deferrals and lower-than-anticipated information exchanges. The site issues were in the long run fixed, however numerous customers have complained that pursuing the right family or business inclusion can be precarious. As of late, the enrollment period has additionally been abbreviated to between November 1 and December 15. Numerous hospitals and general wellbeing agencies have set up projects to assist with directing purchasers and entrepreneurs through the arrangement cycle. The ACA site additionally has areas given to clarifying the techniques and accessible alternatives.

Businesses are cutting employee hours to avoid covering employees

People opposing Obamacare claimed the legislation would destroy jobs. The number of full-time jobs has gone up in recent years, but there are still reports of businesses cutting hours from employee schedules. Businesses with 50 or more full-time employees must offer insurance or make payments to cover healthcare expenses for employees. By reducing hours, companies are able to get by the 30-hour-per-week definition of a full-time employee.

Healthcare has become more affordable

In 2019, nearly 9 out of 10, or 87 percent, of marketplace enrollees were eligible for financial help with premiums, and roughly half — 54 percent — received reduced cost sharing. Although the average plan premium was $612 per month, the average enrollee owed just $87 per month after applying the ACA’s financial assistance.

Along with enabling states to expand Medicaid to millions of newly qualified low- and middle-income Americans, the ACA “included provisions to streamline qualification, enrollment, and renewal processes” for Medicaid and CHIP. These adjustments make it simpler for children to be signed up for and stay covered by coverage with little or no cost sharing. The ACA also accelerated the growth and promotion of data-driven systems: As of January 2019, all states permit potential Medicaid beneficiaries to apply online and most permit for application by phone.

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Across nearly all health plans, both public and private, the ACA eliminated copayments and other types of cost sharing for preventive services. This provision permits beneficiaries to seek contraception; screenings for cancers, blood pressure, cholesterol, and other illnesses; and vaccinations without out-of-pocket costs. In addition, the ACA holds private insurance companies accountable for charging fair premiums, whether for individual market policies or for employer-sponsored coverage.

More than expanding insurance coverage

The ACA goes well beyond insurance expansions. It takes a number of steps to reduce expenses and improve health care delivery, including:

  • Medicare Reforms That Reduce Payments to Providers. One of the ACA’s strategies for expense containment involves cutting prices that Medicare pays to most medical providers. There is proof that these cuts are having an effect. They are reducing Medicare spending growth and beginning to exert a spillover effect on private sector health care spending as well.
  • Experimental Activities to Test the Cost Effects of Alternative Payment Approaches. The ACA calls for greater emphasis on paying for care based on value instead of volume of services. New programs are advancing value-based purchasing (VBP) across a range of settings. A RAND study analysed the state of knowledge in this area and identified key knowledge gaps in order to help federal policymakers apply and scale up VBP programs and set practical objectives for defining their success.

Conclusion

The ACA has helped a great many Americans acquire insurance coverage, saved a huge number of lives, and reinforced the medical care system. The law has been groundbreaking for individuals who were beforehand uninsured, have lower earnings, or have prior conditions, among different gatherings. However, even as the ACA’s memorable achievements are praised, note the high stakes of the devotion that the Trump organization and its partners have displayed to destroying the ACA and turning around a time of progress.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.

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