Before the Affordable Care Act’s market reforms took effect, health insurers could deny coverage or charge exorbitant premiums to those with preexisting conditions – providing consumers with better value for their healthcare dollars. Now they are protected against this happening again!
Additionally, the Affordable Care Act fosters competition for high-cost medications by expediting FDA approval of biosimilar versions of branded medicines.
1. The Individual Mandate
Few provisions of the Affordable Care Act have caused more controversy than its controversial individual mandate, which requires almost all Americans to purchase health insurance or face a penalty payment. Read up on all the essential facts surrounding this key feature with this NFIB Research CribSheet.
Without a mandate, many healthy individuals would remain uninsured and thus cause premiums for everyone else to rise as premiums continued to increase and the markets could become unstable. With the mandate in place, two key goals have been accomplished.
Before the Affordable Care Act was in place, insurers could deny coverage to applicants with preexisting conditions or cancel policies without providing reasons. Thanks to guaranteed issue and renewal requirements and mandates in the ACA, this no longer happens, keeping more younger and healthier people in the risk pool and keeping premiums affordable for lower income individuals.
2. The Health Insurance Exchanges
The Affordable Care Act established state or multistate-based health insurance exchanges where individuals and small businesses can purchase private health coverage. It prohibits lifetime monetary caps, limits annual caps, and prohibits cancellation or rescinding for people with preexisting conditions.
Exchanges aim to remove some of the obstacles to market competition that have historically hindered market competition, such as inadequate information on available plans, ineffective consumer coordination efforts and lack of accessible replacement products.
Studies show that adding additional marketplace subsidies (to cover part of someone’s premium and deductible costs) boosts enrollment in the individual market by 14 to 24 percentage points; however, these add-on subsidies cannot last forever and depend on congressional approval.
3. The Medicaid Expansion
The Affordable Care Act gives states the choice to expand Medicaid eligibility to adults earning up to 138 percent of the federal poverty level, contrary to claims by some state leaders that this expansion will cost nothing; rather, the ACA pays 90% of costs associated with expansion enrollees while increasing base Federal Medical Assistance Percentages by five percentage points over two years for non-expansion states.
Additionally, the Affordable Care Act prohibits insurance companies from denying coverage for preexisting conditions and raising premiums without explaining themselves to consumers, leading to significant gains for individuals and families and helping narrow health disparities – for instance resulting in more women of color attending cancer screenings early.
4. The Tax Credits for Low-Income Individuals
The Affordable Care Act (ACA) offers individuals and families who purchase health insurance through marketplaces with financial assistance in two forms – premium tax credits and cost sharing reductions.
These credits help reduce monthly payments that enrollees must make for marketplace plans, while the Affordable Care Act sets limits on cost sharing (deductibles and co-pays) that consumers must cover for services they utilize.
Health insurance marketplaces typically provide four levels of coverage – bronze, silver, gold, and platinum – with bronze having the lowest premiums and platinum having the highest.
Individuals and families whose income falls within 138% FPL may qualify for marketplace subsidies to assist with paying their health insurance premium, known as premium tax credits. Individuals with higher incomes who cannot access affordable employer coverage may be eligible for Medicaid in states that have expanded eligibility.
5. The Preventative Care Rules
The Affordable Care Act contains several major initiatives designed to increase our nation’s commitment to prevention. These include creating a Patient-Centric Outcomes Research Institute and initiating community preventive care pilot projects.
Also, these regulations require non-grandfathered group health plans and health insurers to cover without cost sharing preventive services recommended by Public Health Service Act and HRSA guidelines. They finalize interim final and proposed regulations from July 2010 and August 2014 respectively and offer an accommodation that allows any eligible organization – be it religious nonprofit entity or closely held for-profit entity–to notify the Department if coverage of contraceptive items or services violate their owners’ religious beliefs.
Successful implementation of these provisions will require both dedicated efforts by government staff and participation by citizens, as well as close coordination among agencies that promote and implement prevention strategies.
