The Affordable Care Act marked a monumental shift in the US health-care system. It made healthcare more accessible and affordable for all Americans.
The law also prohibits insurance companies from engaging in certain abusive practices. These include denying coverage to people with pre-existing conditions, setting lifetime limits on coverage and canceling your plan when you become ill.
Tax Credits
Tax credits are a popular means by which governments assist citizens financially. These dollar-for-dollar reductions of your final tax bill are not dependent on income level, meaning they can be beneficial to people at all income levels.
Premium tax credits are refundable and can be taken in advance or applied to insurance premiums each month. In certain circumstances, they may even be received as a refund on federal income taxes.
The Affordable Care Act offers tax-credit subsidies to help low-income families and individuals purchase affordable health insurance through the Marketplace. However, these subsidies are only available for plans that meet specific criteria; they cannot be applied to catastrophic coverage, short-term plans, standalone prescription drug plans, or insurance supplements for dental or vision care benefits.
Premium tax credits have enabled many Americans to afford affordable health insurance. Without these subsidies, marketplace premiums could have skyrocketed as high as 15 to 70% in some states.
Exchanges
An exchange is a marketplace where individuals and small businesses can shop for health plans and apply for financial aid. Created by the government, these exchanges were established to make health insurance coverage more affordable for individuals and small businesses alike.
States can opt to create an exchange as either a government agency or nonprofit organization. Either way, it must be publicly accountable and have technically competent leadership.
Successful Exchanges will simplify and enhance the health insurance market, cutting administrative costs for consumers and employers alike.
They will also prevent adverse selection by guaranteeing that those purchasing through the Exchange represent both healthy and less healthy consumers.
Exchanges must create performance measures that are uniform and widely accessible. These metrics will enable them to assess their performance while providing transparency.
Expansion of Medicaid
Medicaid is a safety-net program for low-income Americans that costs nearly $672 billion annually and covers roughly 79 million Americans.
Under the Affordable Care Act (ACA), states are required to extend Medicaid eligibility to individuals with incomes up to 138% of the federal poverty level (FPL), or $18,750 in current dollars. As an incentive for states that choose this route, the federal government provides enhanced federal matching rates (FMAP) in support of this initiative.
Unfortunately, only a few states have chosen to expand Medicaid coverage. At present, 11 states – Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, Tennessee and Texas – have yet to do so in order to accommodate all new adult and child Medicaid enrollees created under the ACA.
Nonexpansion states account for 60% of the population in what is referred to as “coverage gaps,” where people wait years without access to affordable health insurance and are disproportionately burdened by medical debt.
Pre-Existing Condition Insurance Plan
Before the Affordable Care Act, health insurance companies could deny an individual coverage or charge them more due to a preexisting condition. As a result, many people became uninsured and unable to access needed medical care.
However, discrimination of this sort was outlawed by the Affordable Care Act (ACA). Now if an insurer sells a major medical plan to someone with a preexisting condition, they must provide them with affordable coverage or face legal repercussions.
The Affordable Care Act (ACA) also offers protection to individuals who purchase health plans on the individual market. This includes unemployed people, those between jobs that offer health benefits, and those ineligible for Medicaid or Medicare coverage.
Before the Affordable Care Act (ACA), approximately 130 million non-elderly Americans with preexisting conditions were denied coverage or required to pay more for coverage. These included asthma, diabetes, cancer and pregnancy.
