Affordable Care Act (ACA) – What Does It Mean For You?
The Affordable Care Act (ACA) requires insurers to offer plans in a marketplace with certain rules. For example, they can’t reject you based on your health status and must cover a minimum set of benefits.
But Republicans’ repeated attempts to repeal and replace Obamacare have failed so far. And that makes the law’s future uncertain.
Affordable Health Insurance
Before the ACA, insurance companies could refuse to cover preexisting conditions or cancel coverage at any time. Now, insurers are required to offer a range of benefits and cannot raise premiums without a good reason. The ACA also requires insurance companies to spend at least 80 percent of premiums on care. It also prohibits the use of annual or lifetime benefit limits.
Additionally, the ACA makes it easier for people to get preventive health screenings and lowers or eliminates copays for these services. It also allows individuals to choose plans with higher monthly premiums but lower deductibles or out-of-pocket costs, such as bronze, silver, gold, or platinum levels. In addition, the ACA requires all Americans to have qualifying insurance or pay a penalty. Those who purchase their coverage through the marketplace must enroll during open enrollment periods.
Pre-Existing Condition Coverage
The ACA allows insurance companies to offer plans with no pre-existing condition waiting periods for anyone, regardless of their health history. This ensures that more people can get the preventive care they need to manage their health, which could mean less expensive and debilitating treatments down the road.
The ACA also limits the duration of pre-existing condition exclusions that group health plans may impose on their adult enrollees. It also prohibits health insurance companies from using genetic information to determine the likelihood of developing a disease or condition.
It also requires all Americans to have qualifying health insurance or pay a fine, which some critics say is intrusive and passes healthcare costs onto everyone else. But supporters of the ACA argue that it makes sense for all individuals to have access to affordable coverage and that it helps keep healthcare costs down for everyone.
Health Insurance Premiums
Before the ACA, private insurers could only offer plans with a narrow set of benefits, deny coverage for preexisting conditions, or charge people more because of their health status. The ACA allows insurers to offer a range of plans that include essential health benefits, and requires all Americans to purchase insurance or pay a fine.
The ACA also offers subsidies to help lower income individuals afford the cost of their premiums and out-of-pocket costs. These are known as “cost-sharing reductions” and “advance premium tax credits.” Individuals with incomes between 100-400% of the poverty level can qualify for these subsidies. A freeze by the Trump administration on these payments has raised concerns that marketplace premiums may increase, but Tennessee Insurance Commissioner Julie Mix McPeak has not been convinced this will occur.
Depending on their income, consumers purchasing a marketplace plan may qualify for what is known as a premium tax credit. These credits are applied against the cost of a health insurance plan on a monthly basis. The credits can be used toward any plan sold in the marketplace (except catastrophic coverage) but cannot be used towards the cost of benefits that aren’t essential health benefits.
Currently, the ACA’s premium tax credits increase as needed to largely shield low and moderate-income consumers from market volatility. However, the House plan’s delinking of these subsidies from premium growth would likely cause them to fall sharply in high-cost states and make marketplace coverage unaffordable for many. The result could be a feedback loop in which higher premiums lead to lower enrollment and a worse risk pool, leading to still-higher premiums and so on.