What are the major provisions of the Affordable Care Act (ACA)? The ACA makes health insurance more accessible, increases access to care, and eliminates wasteful spending.
The Affordable Care Act (ACA) contains several provisions that safeguard individuals with preexisting conditions. These safeguards prevent insurers from denying coverage or charging higher premiums to those with health problems.
Guaranteed Issue
The Affordable Care Act established a law that required all health insurance policies sold on the individual market to be issued with guaranteed issue status. This was done to guarantee people could purchase coverage without fear of being denied coverage due to pre-existing conditions or charged higher premiums.
Additionally, small group coverage must be sold on a guaranteed-issue basis. This is beneficial since before the Affordable Care Act, premiums for these groups could vary based on an organization’s medical history.
This guaranteed-issue and modified community rating rule is an important step, but it won’t solve all the problems caused by the chronic shortage of affordable health insurance options in many parts of America. While this measure can certainly be seen as progress, it will not suffice.
Coverage for Pre-Existing Conditions
The Affordable Care Act prohibits health insurers from denying coverage or charging higher premiums based on your pre-existing condition. Furthermore, Medicaid and Medicare cannot discriminate against you due to such a condition.
The Affordable Care Act prohibits insurance companies from placing annual and lifetime limits on coverage for people with pre-existing conditions. Before the ACA, these limitations made it difficult for those suffering from serious illnesses like cancer to access the care they needed when sick.
These safeguards are critical for individual market plans, but they also have an immense effect on self-funded plans – the type of insurance many employers purchase for their employees. Before the ACA, self-funded insurers could use medical history to decide whether or not to offer a policy and at what price point; this was what many small groups did in the past.
Coverage for Children
A major goal of the Affordable Care Act is to guarantee high-quality, comprehensive coverage for children and young adults. This can be accomplished through various options like Medicaid, CHIP, marketplace plans, or employer-based coverage.
The Affordable Care Act (ACA) also offers tax credits to help reduce premium costs for individuals and families eligible for Medicaid or CHIP. This marks a dramatic change from the previous system that only granted eligibility to those whose incomes fell below certain thresholds.
Tax Credits for Individuals and Families
A major component of the Affordable Care Act (ACA) is premium tax credits, which help lower health insurance costs. These can be applied directly to monthly premiums or received as a refund on federal income taxes.
Individuals, families and small businesses who purchase Marketplace plans are eligible for a premium tax credit. The amount of the credit depends on household income.
The credit helps reduce enrollees’ out-of-pocket expenses for marketplace plans. These plans come in four “metal” levels — bronze, silver, gold and platinum — which differ in premiums, co-payments, deductibles and other cost sharing elements.
Medicaid Expansion
The Affordable Care Act’s Medicaid expansion allows states to extend Medicaid eligibility to adults with incomes up to 138% of the federal poverty level (FPL). As a result, the federal government pays 100% coverage for up to three years for newly admitted enrollees.
However, states are now required to pay more for expanding Medicaid than anticipated despite federal financial contributions. As a result, the cost of coverage has grown more than twice as much per person than initial estimates.
Additionally, many Medicaid beneficiaries are ineligible for coverage. Patients with pulmonary disease, critical illness or sleep disorders often require life-saving medication that is not covered by their insurance plan. Furthermore, prescription drug coverage requirements differ significantly across individual states.
