The Affordable Care Act (ACA) is a major law that was signed into law by President Obama on March 23, 2010. It includes several key reforms.
The ACA is designed to improve access to health coverage for all Americans and protect consumers from abusive insurance company practices. It also encourages integrated health systems and improves the quality of care.
Health Insurance Exchanges
A Health Insurance Exchange, or Marketplace, is an online platform through which individuals and small businesses can compare and purchase coverage. They are either operated by a state or the federal government.
The Affordable Care Act imposes certain requirements on these exchanges. For example, they must certify qualified health plans.
In addition, they must publish standardized information on plans so that consumers can easily compare them. They must also rate plans on factors such as cost, quality, and customer service.
Moreover, Exchanges must be self-supporting over the long term. This requires states to find ways to finance their exchanges, such as imposing fees on health insurance issuers or earmarking funds from general revenues.
Tax Credits
Premium tax credits (also called premium subsidies) provide a discount on marketplace health insurance plans to low- and middle-income Americans. These refundable tax credits are available to people with incomes between 100% and 400 percent of the federal poverty level who purchase their health coverage through the exchanges.
They help people lower their monthly health insurance costs and can reduce a family’s total tax bill when they file taxes. However, not all tax credits are created equal.
The size of a premium tax credit is affected by many factors, including an individual’s or family’s income and household size. Keeping track of this information can save families money at the end of the year, but it’s also important to know how mid-year changes in income or household size impact eligibility.
The ACA provides advance payment of these tax credits to eligible enrollees. These credits are sent directly to the insurance company, and they reduce a family’s premium payment.
Preventive Care
Preventive care is the medical treatment and lifestyle choices that prevent or delay the onset of disease. It helps you and your family stay healthy, live longer, and save money.
Today, the Affordable Care Act requires most private health plans to provide coverage of recommended preventive services without cost sharing. These rules are effective for all non-grandfathered plans and apply to both employers and individuals in the health insurance marketplaces.
The ACA also added new requirements for Medicaid and Medicare to cover evidence-based preventive services, with no cost-sharing. These policies will help improve the health of many Americans.
Young Adults
One of the most important groups for health insurance reform is young adults, whose uninsurance rates have been growing for decades. In 2009, nearly 15 million people between the ages of 19 and 29 were uninsured.
Fortunately, the Affordable Care Act has already expanded coverage for millions of young adults by allowing them to stay on their parents’ insurance plans until age 26, preventing them from losing this crucial health coverage. In addition, the law’s market reforms and new health insurance exchanges will help more people get affordable, high-quality coverage.
Critics often worry that the law will increase premiums for young adults, especially in the nongroup market–but our conservative estimates show that only about 3 percent of all young Americans between the ages of 19 and 29 might see higher premiums. Even if these individuals do, they will be eligible for federal subsidies to help offset the cost of their increased premiums.
