Obamacare (or Affordable Care Act) seeks to provide greater value for premium dollar, holding insurers accountable for how they spend it and providing you access to preventive health services without extra costs.
It prevents insurers from denying coverage to people with preexisting conditions and limits their ability to cancel or revoke coverage. It also established insurance exchanges, and allowed young adults to remain on their parent’s plans until age 26.
1. Pre-Existing Condition Insurance Plans (PCIPs)
The Affordable Care Act created a temporary program known as Pre-Existing Condition Insurance Plans (PCIPs) to make health coverage available to individuals who were denied or offered expensive pre-existing condition coverage from private insurers, or who have had insurance rejected for unaffordability due to preexisting conditions. It also established a high risk pool to help individuals who had their applications rejected due to preexisting conditions by private insurers and haven’t found affordable private coverage solutions yet.
Rules governing these programs are flexible to meet local preferences and allow State and non-profit private entities to administer enrollment in an effective, cost-cutting manner.
2. Medical Loss Ratios (MLRs)
Medical Loss Ratios (MLRs) represent the minimum amount of premium dollars health insurers must spend on clinical services and quality improvement activities. Under the Affordable Care Act (ACA), health insurers that sell individual, small group and community rated large group policies are required to adhere to these MLR standards.
MLRs help ensure that health insurers you select use your premium dollars wisely; otherwise, law requires them to issue rebates back to policyholders.
3. Co-pays
Copays are flat fees charged when receiving health care services and help insurance companies spread out the costs among their policyholders.
Copayments are commonly included with managed care plans like HMOs and some PPO plans, though not always.
Copays typically aren’t part of the Affordable Care Act. But this legislation includes many other aspects that matter to consumers.
4. Coinsurance
Coinsurance is a cost-sharing arrangement used by health insurance providers to reduce how much patients must pay for medical services. Like deductibles and copays, coinsurance covers a percentage of costs rather than being fixed dollar amounts.
Coinsurance is not subject to regulation under the Affordable Care Act; however, plans sold in the marketplace must ensure their annual cost-sharing limits apply only to essential benefits.
5. Out-of-pocket maximums
The out-of-pocket maximum (OOP Maximum) is the annual cap on how much of your covered health care costs you can be responsible for (including deductibles, copays and coinsurance). Once this limit has been reached, your health plan will cover 100% of any additional costs throughout the remainder of the year.
There are plans that offer out-of-pocket maximums that fall below the federally permitted caps (in 2023 it’s $9,100 for individual plans), and certain Gold and Platinum plans as well as Silver plans with built-in cost sharing reductions have even lower out-of-pocket maximums than this threshold.
6. Expiration dates
Under the Affordable Care Act (ACA), everyone must possess health insurance or face a fine. Open enrollment for marketplace coverage has now started and eHealth can assist in finding a plan tailored specifically to you and your family’s needs.
Q1. Will changing a group health plan’s plan year (or in the individual market, policy year) affect its annual limit waiver under PHS Act section 2711? A1. Yes. If the annual limit waiver expires earlier than anticipated due to this change in plan year or policy year.
7. Preventive care
Preventive medicine aims at stopping illness before it even starts; traditional forms of medicine tend to focus on treating symptoms after they appear. But preventive measures help ensure people can stay healthy by stopping illness before it even starts, one person at a time.
Under the Affordable Care Act (ACA), private health insurers are mandated to cover preventive services without cost sharing for all adults – this includes evidence-based items or services with an A or B recommendation from the U.S. Preventive Services Task Force as well as those included in HRSA Bright Futures and Women’s Preventive Services Guidelines.
8. Deductibles
A deductible is the annual out-of-pocket expense you bear before your health care plan begins to cover costs. Most plans offer both individual and family deductibles; typically the latter is twice that of its predecessor.
The Affordable Care Act mandates that insurance companies give you value for every premium dollar spent; if they do not spend at least 80% of your premium dollars on medical care and quality improvements, a rebate must be offered.
9. Co-pays
Co-pays are fixed amounts that must be paid upfront when receiving health services or prescription drugs from physicians or pharmacies, to discourage unnecessary claims filing and promote prudent use of insurance policies.
Some services require both a copay and deductible payment; these vary according to coverage types, while services like annual preventive care exams or certain vaccines may be exempt. Finding an acceptable balance between savings on premium costs and out-of-pocket expenses is key.
