As commonly known, Obamacare set out a comprehensive set of federal standards for health insurance policies sold individually and through small-employer groups. Among other goals, this law ensured that individuals and families could gain access to higher-value care at fair and competitive prices.
Under this act, young adults were guaranteed coverage under their parents’ insurance until age 26 and required plans to include substance use disorder treatment as an essential benefit.
What is the Affordable Care Act?
The Affordable Care Act’s reforms ensure individuals access to high-quality health coverage at an affordable cost. Insurance companies cannot discriminate against people with preexisting conditions; cost sharing for preventive services will be limited and essential benefits will be covered as required. Furthermore, premium rating rules require insurers to spend at least 80-85% of total premiums on medical care in order to receive rebates back from consumers.
The law expanded public and private health insurance to millions of Americans, making coverage more affordable and accessible for low- and middle-income families via marketplaces and Medicaid expansion. Furthermore, it enabled young adults to gain coverage by allowing children under 26 to remain on their parents’ plans until age 26.
The Affordable Care Act’s reforms are bearing fruit, with over 20 million more people gaining health coverage and middle class costs stabilizing. Furthermore, direct investments are being made into health-care quality while streamlining how health insurance operates and giving patients more rights and protections.
What is the Individual Mandate?
The individual mandate is a provision in the Affordable Care Act that mandates individuals to obtain health insurance or face penalties. Penalties range from either a flat dollar amount (rising from $95 in 2014 to $695 in 2016) or 2.5% of household income – whichever is greater. People covered by employer-sponsored or government healthcare plans as well as children under 18 and preexisting condition coverage are exempted from paying this penalty.
Critics criticized this provision of the Affordable Care Act, with critics alleging it forced some Americans to buy something they did not need or want. Meanwhile, supporters maintain it ensured enough healthy people participated in risk pools resulting in lower premiums for everyone and reduced uncompensated care and costs saved on Medicaid premiums as a result. According to estimates by Congressional Budget Office (CBO), without individual mandate spending on acute care for non-elderly adults would reach $4,795, as opposed to just $2451.
What is the Health Insurance Exchange?
Health insurance exchanges or marketplaces provide individuals with a centralized portal where they can shop and compare various health plans. Some states operate their own fully-run marketplaces while others use federally operated platforms; all marketplaces must offer standard information about benefits, costs and quality ratings of plans available.
The Affordable Care Act (ACA) mandates that all marketplace plans provide essential health benefits (EHBs). Employer-sponsored group plans with more than 50 members cannot exclude certain conditions and practices from coverage, while exchanges must certify plans to reduce adverse selection such as limiting pool of subsidized coverage in an exchange market, and mandating sales of identical products both inside and outside an exchange market.
Jost notes that state legislation provides exchanges with considerable flexibility when making purchasing decisions and avoiding adverse selection (in which high-cost individuals enroll and drive up prices). These decisions must also accommodate consumer-friendly comparisons of marketplace options and provide them with information regarding premium changes.
What is the Medicaid Expansion?
Under the Affordable Care Act (ACA), states can expand Medicaid eligibility to adults with incomes up to 138% of the federal poverty level (FPL), or $18,700 for an individual – which is five percent above FPL. The federal government will cover 100% of expansion costs for three years before gradually decreasing to 90% by 2020.
States determine the specific services covered by Medicaid plans, which may have an impactful effect for patients living with lung disease, critical care needs or sleep disorders. Variations between state interpretation of the Affordable Care Act’s 10 essential health benefits categories could result in discrepancies that make accessing necessary treatment more challenging.
Twelve states have not taken advantage of Medicaid expansion yet, and research shows that medical debt balances are more likely to surface in nonexpansion counties. This may prevent individuals in these states from accessing nonemergency care as they face financial strain when needing healthcare services.
