What is the Affordable Care Act?

The Affordable Care Act (ACA), also known as Patient Protection and Affordable Care Act, is a health care reform law that came into effect in March 2010.

Many refer to the act as Obamacare, as former President Barack Obama instituted the ACA. The Act’s overall goal is to make quality, affordable health insurance accessible to more Americans, while conserving existing health insurance policyholders. The reform consists of 10 fundamental titles, each with health-related sections of provisions that regulate the health care system. Individuals must apply for qualifying health care during an open enrollment period unless they have experienced a life event, such as moving, that qualifies them for special enrollment.

How does the Affordable Care Act affect those who already have health care?

If an individual’s health care plan existed before March 23, 2010, he or she can maintain that coverage. Health insurance companies that offered coverage before the law was enacted are allowed to continue offering coverage to individuals enrolled before that date. Only job-based health insurance plans can enroll new people. These conditions fall under the “grandfather” provision meaning they are an exception to the rule. These “grandfathered” health plans do not need to meet the essential health benefits required by the ACA.

Rights and protections implemented by the ACA to ensure people are receiving quality and fair health insurance. For instance, ACA requires all plans in the marketplace to cover individuals with pre-existing conditions, such as asthma, without raising their rates. It also prevents insurance companies from cancelling an individual’s coverage because he or she becomes sick, thus making insurance companies more reliable.

Furthermore, health insurance companies are not allowed to establish yearly or lifetime limits on what they spend on an individual’s essential health benefits. Individuals also have the right to choose an out-of-network emergency room in case of an emergency without consequence. In the past, penalties included higher copayments or coinsurance. Lastly, the ACA allows young adults to stay on their parent’s plans up until they turn 26 years of age.

How does the Affordable Care Act affect those who do not have health insurance?

Under the Affordable Care Act, you are required to have qualifying health insurance. Failure to obtain health care while being able to afford it will result in either two penalties that rise each year with inflation. These fees are called an individual shared responsibility payment. You may have to pay a higher tax payment of 2.5 percent of your income or a fee per person in your household. The 2017 fee per person was $695 per adult and $347.50 per child. If you do not receive health coverage for up to 2 months, you may qualify for an exemption. Simply check your records and determine how long you were uncovered. If it was under 2 months, download and complete the Form 8965. However, this individual mandate penalty will no longer be in effect after 2018.

While there are penalties and fees to consider, you may not be obligated to get coverage if you fall under the Act’s exceptions. Those excluded from having to obtain minimum coverage include those who:

  • Cannot afford health care.
  • Are religious objectors.
  • Are taxpayers with incomes less than 100 percent of the federal poverty line.
  • Are Indian tribe members.
  • Secure a hardship waiver.
  • Incarcerated individuals.

What if you can’t afford traditional health insurance?

Before the Affordable Care Act was implemented, many low-income individuals and families could not afford traditional health insurance and did not meet Medicaid qualifications. The federal government required that states provide Medicaid to mandatory eligibility groups, not including individuals who had low-income, no children and were non-disabled. In addition, the median state income for parents to qualify for Medicaid meant that they had to make equal to or below 68 percent of the federal poverty level (FPL). However, two of the many goals of the Affordable Care Act was to expand both the income and eligibility requirements for Medicaid. The Affordable Care Act gave states the opportunity to provide Medicaid to nearly all low-income adults whose income met 138 percent of the FPL by promising to match funds to participating states. Due to a lawsuit by some states, the Medicare expansion is optional and states can choose not to expand this coverage.

Today, the median income requirement for Medicaid is equal to or below 133 percent of the FPL, while many states like New Jersey are meeting the 138 percent match-up opportunity. If you cannot afford traditional health insurance today, you may be eligible for Medicaid if your income is equal to or below the 133 percent federal poverty level, depending on which state you live in. Moreover, if you are a single and childless low-income individual, you are more likely to qualify for Medicaid benefits because of the ACA. Check with your state to find out if you qualify for Medicaid today.

What essential health benefits are required by the Affordable Care Act?

Many mistake the Affordable Care Act as a substitute for health insurance. However, the Act was not created as a form of health insurance but as a way to regulate the health insurance industry. As part of the ACA, health insurance plans are required to fulfill 10 fundamental health needs. This makes it easier for people to compare insurance plans by looking at additional benefits and the amount they will spend on copayments and deductibles. All health care plans, with an exception of those that existed on March 23, 2010, must provide essential health benefits. Some of these essential benefits have no out-of-pocket costs while other have cost-sharing limits. Essential benefits include the following:

  • Chronic disease management, preventive care and wellness services must not require beneficiaries to pay a copayment for qualifying procedures. These procedures include immunizations, screenings and annual checkups. For instance, health insurance companies must cover flu shot and HPV vaccines. They must also maintain care for chronic illnesses.
  • Ambulatory patient service is outpatient treatment you receive without hospital admission, doctor’s office or clinic. Plans are required to provide coverage for this service up to 45 days.
  • Emergency service is care you may receive due to a sudden illness or accident that can lead to a severe disability or fatality. You cannot be penalized for receiving treatment at an emergency room out of your policy’s network without prior authorization.
  • Prescription medications are drugs described by doctors to treat a condition or illness such as strep throat. Health plans offer a list of medications offered by the provider, which is also called a formulary. Any costs made on prescription drugs out of your own pocket can be covered in your deductible.
  • Maternity and newborn care is care received throughout a woman’s pregnancy, labor and post-delivery. It is defined as preventative care, meaning it is provided at no cost.
  • Mental health and substance use disorder assistance is offered at inpatient or outpatient facilities that evaluate and diagnose conditions and provide care. These service also include behavioral health treatments. Health insurance companies are required to treat these services no less than they treat medical/surgical services. This means if an insurance plan requires a $20 dollar copay for a surgical visit, it must require a copay of no more than $20 for a mental health visit.
  • Laboratory services are services that help a medical professional diagnose an illness, injury or condition. These services also help monitor specific treatments such as cancer. Laboratory services that fall under preventive screenings like mammograms must be covered by insurance companies in full amount.
  • Pediatric services are services provided to care and treat children and infants. Wellness visits and recommended immunizations must be given free of charge because they are preventative services. Pediatric care also includes vision and oral care.
  • Hospitalization must be covered to some extent on your health care plan. This coverage includes surgery and overnight stays, as well as care received in a nursing facility.
  • Rehabilitative and habilitative services and devices are provided to help an individual develop or regain mental and physical skills. Health insurance plans are required to cover 30 visits each year for occupational or physical therapy, such as speech-language pathology visits.

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