Obamacare is a federal program to assist individuals in accessing affordable health insurance coverage. This plan consists of various taxes and subsidies designed to make health coverage affordable, some of which were enhanced under the American Rescue Plan Act.
It prohibits insurers from denying coverage to people with preexisting conditions and puts an end to lifetime monetary caps on health coverage, requires employers to offer health insurance, and provides state or federal marketplaces where individuals and small businesses can purchase health coverage.
The Patient Protection and Affordable Care Act (PPACA)
President Obama signed into law the Patient Protection and Affordable Care Act on March 23, 2010. This comprehensive health reform law helps lower health insurance costs for some Americans through exchange subsidies and by mandating plans that cover specific services like screenings or preventive care with low copays or deductibles; life time caps on coverage are prohibited and cancellation or denial due to preexisting conditions is no longer an issue for insurers.
Due to initial glitches with the Affordable Care Act website and recent reports that businesses are cutting hours in response to its requirement to offer healthcare, more Americans now have affordable healthcare insurance coverage. Furthermore, the ACA makes purchasing health coverage simpler for both individuals and small businesses by mandating insurers spend at least 80 percent of your premium dollar on medical care rather than advertising or overhead costs.
The Health Insurance Marketplace
The Affordable Care Act created state-based health insurance exchanges so individuals and small businesses could purchase health care coverage through these exchanges, with tax credits available to cover the costs associated with offering coverage to employees. Furthermore, it prohibits insurers from discriminating against people with preexisting conditions by dropping them altogether, setting annual or lifetime caps or raising premiums without justification or raising them without justification; additionally it imposes penalties against firms employing more than 50 workers that don’t offer it voluntarily, allows young adults to remain on their parents’ plan until age 26 while expanding Medicaid to cover low income individuals.
But the impact of the Affordable Care Act depends heavily on how states implement and use it; how well their marketplaces function; partisanship plays a part, but other factors also come into play; for instance, states which opt not to expand Medicaid can contribute significantly to variance in market uptake and enrollment, with less likely plans offering cost-sharing reductions or income based premium subsidies in their marketplaces.
The Small Business Health Options Program (SHOP)
SHOP (Small Business Health Options Program) of the Affordable Care Act is a new way for small businesses to offer health insurance to their employees, featuring an online marketplace where employers can compare plans fairly and apply for tax credits. SHOP is available for small employers with 50 or fewer full-time equivalent employees in most states.
ObamaCare SHOP offers an assortment of Qualified Health Plans from private insurance providers. These plans range in terms of price, coverage and deductible amounts and must provide 10 essential benefits.
Employees can enroll in SHOP plans at any point throughout the year, whether independently, with help from a SHOP-registered agent or broker, or through the State Health Benefits Exchange. Most states mandate minimum participation rates of 70% in their SHOP plans; however some have higher minimum requirements, like Texas which mandates minimum participation rates of 75%.
The Independent Payment Advisory Board (IPAB)
The Day’s Scoop: Your daily email briefing on Alabama politics. The Affordable Care Act includes numerous new taxes and fees to offset its costs, such as an excise tax on high-cost Cadillac health plans, annual fees on health care providers, a new 2% surtax on those earning over $200,000, medical device taxes and penalties for those remaining uninsured.
It also establishes an Independent Payment Advisory Board (IPAB) to reduce Medicare enrollment per enrollee growth by providing recommendations that bring it below statutory spending targets. This board would have included 15 members nominated by the President and approved by both houses of Congress; serving six-year terms each.
The Affordable Care Act purported to prohibit IPAB from proposing policies that raise taxes, increase beneficiary premiums or cost sharing payments, limit benefits or alter eligibility; however, these restrictions were rendered meaningless because the law allows Secretary of Health and Human Services to implement IPAB’s decisions; giving super-legislators immense influence over an entire federal program.
