Health Insurance

What Is the Affordable Care Act?

The Affordable Care Act was enacted in 2010 and allows everyone to obtain health insurance regardless of their health status. Open enrollment for 2023 begins November 1.

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The Affordable Care Act is a law that was enacted to reform health care in the United States. It aimed to make health insurance more affordable by using tax credits, improving Medicaid, and lowering health care costs. There are advantages and disadvantages to the ACA, and knowing how to enroll and what the future looks like is essential. 

What is the Affordable Care Act (ACA)? 

The ACA, or Affordable Care Act, was passed in 2010 to help uninsured people with pre-existing conditions obtain affordable healthcare. Before the ACA, many people were left without or denied health insurance due to pre-existing conditions or affordability.

Before the ACA was enacted, those with pre-existing conditions were forced to pay high out-of-pocket medical expenses unless they had been continuously insured before any diagnosis. Due to this healthcare reform, anyone can obtain health insurance regardless of medical circumstances. 

The Affordable Care Act has also helped those who could not afford insurance prior. Health insurance premiums seemed to be increasing each year before 2010, so the ACA aimed to help reduce those premiums, with the expectation that most United States citizens would sign up for coverage. 

When it began, health insurance was a federal mandate and many faced a tax penalty if they failed to purchase insurance. It is now no longer required, but it is much easier to obtain health insurance if you have pre-existing conditions.  

When you purchase a health insurance plan and pay a monthly premium, the ACA provides tax credits to help you lower the cost if you qualify. Those qualifications often change, so visit healthcare.gov for the latest requirements. 

How Does The Affordable Care Act Work? 

The ACA has changed a bit since it was first enacted in 2010. Under the Affordable Care Act, those who failed to purchase health insurance faced a tax penalty called an individual mandate. The penalties were designed to help people without health insurance pay for health care costs they could not before due to hardships or other circumstances.

The Trump administration repealed the individual mandate in December 2017. While the repeal of the charge is still in effect, some states like Hawaii, Washington, Rhode Island, and others have their own specific mandates, so check your state requirements.

Health insurance plans typically require you to pay a monthly premium. Subsidies are included in the Affordable Care Act to assist individuals that may not be able to afford a traditional plan due to lower income.

While many Americans benefit from the Affordable Care Act, many do not. There have been some claims that the quality of healthcare has decreased due to the ACA requirements. Some Americans feel they are paying more to help others and see that as a negative experience. Tax hikes have been implemented to help pay for the cost of this healthcare reform. There are often requests for the ACA to be repealed or revamped to help answer these adverse claims. 

Subsidies 

As part of the Affordable Care Act, government subsidies are available to help people pay for health insurance, as that was one of the biggest promises the ACA would offer. Known as premium tax credits, they help you pay your monthly health insurance premiums as part of these subsidies. 

Subsidies under the ACA, or tax credits, are still in effect today. In 2021, President Joe Biden enacted the American Rescue Plan Act (ARPA). The ARPA increased the subsidies so that even more Americans could benefit. This will continue into 2022 so Americans can continue to receive help to lower their insurance premiums. 

Individuals 100% to 150% of the federal poverty level may qualify for health insurance that would essentially be free after the subsidies. Then, there are cases where you can be around 400% of the poverty level and still get some assistance. 

To see if you qualify for a subsidy, you should apply through the Health Insurance Marketplace or your state’s exchange. If you need help applying, people known as health insurance brokers or enrollment navigators are available to help. Having a professional second set of eyes is never a bad idea. 

What Does The Affordable Care Act Cover? 

Every health insurance plan must include 10 required benefits under the Affordable Care Act. All health insurance plans will vary from carrier to carrier and state to state, but thanks to the Affordable Care Act, they all must include the following at the very least:

  1. Emergency services
  2. Lab services
  3. Preventive and wellness services and chronic disease management
  4. Maternity and newborn care
  5. Rehabilitative and habilitative services and devices
  6. Prescription drugs
  7. Outpatient ambulatory patient services
  8. Hospitalization
  9. Behavioral Health – Mental health and substance use disorder services
  10. Pediatric services to include vision and dental

Advantages of the Affordable Care Act

Regardless of your stance on the Affordable Care Act, there are some distinct advantages to the healthcare reform enacted in 2010. More Americans have access to affordable health insurance. Having peace of mind regarding medical costs is a great benefit.

No one can be denied coverage even if they have a pre-existing condition, and no one can be denied emergency services. Also, before the ACA was enacted, many people ran out of coverage due to maximum limits, but insurance carriers can no longer set limits on their coverage. 

Prescriptions are more affordable due to the Affordable Care Act. Since the ACA list of generic drugs continues to grow, more and more people will be able to afford their necessary medications. 

One of the best ways to keep health insurance and medical costs down is by always completing your preventative services. Like a car, our bodies require a certain amount of maintenance. The ACA offers more coverage for more services like screenings and other preventative services. 

Disadvantages of the Affordable Care Act

With anything that has advantages, there are sure to be some disadvantages. Because the Affordable Care Act causes insurers to provide more benefits, some people will pay higher insurance premiums depending upon the plan they choose.

Taxes continue to rise to help pay for the costs associated with the ACA. Those with higher incomes will pay more taxes, and more taxes are placed on medical devices and pharmaceutical sales. 

Sometimes technology can be a pain for some people, so enrolling online is not always desirable. If there are glitches or a high volume of people on the website simultaneously, it can be tricky to enroll during the allotted open enrollment time. 

Also, some employers are cutting the number of employees or their hours to stay under the ACA’s requirements. The Affordable Care Act maintains that employers with over 50 employees must offer health insurance to those employees who work full time. So, if the employer has their employees only work 28 hours a week, they do not have to provide coverage. 

Enrolling in an ACA-compliant Health Plan

Shopping for health insurance that is Affordable Care Act compliant is easier than ever, mainly if you use the Health Insurance Marketplace to find one. Your state may have its website and enrollment requirements, so check to ensure you are in the right place when it comes time. 

You must enroll during the open enrollment period, which is from November 1 to January 15. If you enroll during this time, your coverage will begin on January 1 of the following year. For example, if you sign up for coverage on November 25, 2022, your health insurance begins on January 1, 2023. 

In many cases, your plan will automatically renew if you obtained coverage last year. However, you should still pay attention because if your insurer no longer offers the same plan, you will have to enroll in a new plan, and not doing so will cause you to lose coverage. 

If you miss the open enrollment, there are some cases where you can still enroll if you have a qualifying event. A qualifying event includes losing your job, marriage, divorce, death, having a child, moving, or losing existing coverage.

Future of the Affordable Care Act

Every year, there are changes to the Affordable Care Act. Laws can be amended, and budget decisions can affect how they are implemented and evolve. As the healthcare field continues to change, and as future presidential administrations and Congress’ political makeup change, the Affordable Care Act is likely to undergo further changes in the future. 

Keep an eye out for these changes so that you can continue to understand the health insurance availability and requirements. The Health Insurance Marketplace is a great place to start because all the requirements and information you need will be there.