The Affordable Care Act, commonly known by its initials “Obamacare”, has made significant strides towards changing how Americans gain health coverage. Employers are now required to offer coverage or face penalties; insurers cannot deny policies based on preexisting conditions either.
It also expands Medicaid and provides subsidies to make private health insurance more cost-effective through state or national exchanges.
Employers
Under the Affordable Care Act (ACA), large employers are required to offer coverage or face penalties. Employees earning up to 400 percent of the federal poverty level may qualify for assistance with premiums and cost sharing through state-based exchanges or marketplaces.
Standard economic theory provides an explanation for why workers prefer employer-provided health insurance: they value its security against high medical costs and are willing to accept lower pay as compensation for being spared the high out-of-pocket expenses and access barriers associated with private individual coverage that would be necessary if obtaining such protection on their own.
The Affordable Care Act (ACA) mandates employers provide coverage, establishes state and federal health insurance exchanges where individuals and small businesses can shop for coverage, and expands Medicaid eligibility to those below 133% of poverty line. It also limits annual and lifetime caps on health coverage limits as well as prohibits insurers from excluding coverage due to preexisting conditions, while setting state rate review standards to prevent excessive health premium increases.
Individuals
Individuals can take advantage of Obamacare by enrolling in healthcare insurance through one of the Affordable Care Act’s online marketplaces (commonly referred to as healthcare exchanges). Households with incomes below 400% of federal poverty levels may qualify for subsidies that help cover premium costs.
The Affordable Care Act also ensures that individuals can purchase health plans regardless of their health history, and that plans cannot deny coverage due to preexisting conditions. All plans must offer minimum essential coverage; and various insurer practices like price discrimination based on gender or age as well as annual increases are forbidden by this legislation.
Individuals with access to affordable health insurance are more likely to live longer and healthier lives, which leads to them missing less work and being more productive at work while needing less emergency room treatment, which benefits society as a whole and the economy alike.
Families
The Patient Protection and Affordable Care Act, or Obamacare, mandates most Americans have health insurance and offers financial help for those who cannot afford it. It also creates individual and small business marketplaces to make private coverage easier to obtain as well as changes to Medicaid plans.
The Affordable Care Act prohibits insurers from denying coverage to children with preexisting medical conditions and ensures that families remain intact by mandating plans and issuers to offer dependent coverage until age 26 regardless of living arrangements, tax returns or student status.
The Affordable Care Act (ACA) permits workers to purchase individual coverage through a federally-run exchange for individuals and small businesses, known as an exchange, with premium subsidies available for those earning too much to qualify for employer coverage. According to RAND research, this solves what has been termed the “family glitch” by allowing employees to use their own marketplace subsidy when their employer plan becomes unaffordable and purchase family coverage instead.
Taxes
People without health insurance through work can take advantage of the Affordable Care Act’s tax provisions to secure affordable coverage. People who fail to purchase health coverage may incur a fine; those earning less than certain thresholds may qualify for cost assistance via marketplace (tax credits). Furthermore, young adults can remain on their parent’s plans until age 26 while small business owners may receive tax credits to assist with employee costs.
The Affordable Care Act imposes taxes on medical device and pharmaceutical manufacturers, and increases Medicare payroll taxes for high earners. Together with savings realized from decreased Medicare payments, these taxes and savings provide health care subsidies for the poor.
The Affordable Care Act also includes a provision that requires insurance companies to spend 80 – 85% of premium dollars on medical care and quality improvement activities, or provide rebates back to consumers. This “Medical Loss Ratio” serves as consumer protection but may increase health insurance premiums for some in both individual and group markets.
