What to know before Jan. 15 ACA enrollment deadline: Part 1

The Affordable Care Act and the Uninsured

If you’ve been following health care reform, you know that the Affordable Care Act (ACA) is the landmark federal statute that has improved the affordability and availability of health insurance to millions of Americans. However, there are still many people who are uninsured. The ACA goes beyond expanding coverage options to other measures that promote a universal approach to health care.

Until the ACA, Americans with preexisting conditions were generally denied coverage. The ACA eliminated this discrimination, as well as limiting annual dollar limits on essential health benefits. In addition, health insurers are not allowed to raise premiums to cover medical expenses because of a preexisting condition.

During the first enrollment period of the ACA, nearly two million Americans obtained health insurance. After the second open enrollment period, the number of newly insured Americans increased to 16.9 million. But there are still more than 19 million uninsured Americans. Despite the ACA, many Americans continue to be ineligible for Medicaid or subsidies, and their access to affordable health care is severely restricted.

There is also a large number of young adults who are currently uninsured. About half of these individuals report having difficulties paying medical bills. Many of them have chronic diseases. And a significant portion of the uninsured are under the poverty line. Adding these coverage provisions would provide 1.2 million young adults with affordable health care. Although this would likely increase the average family premium by approximately seven percent, it would enable more than a million young Americans to obtain coverage.

Among young adults, the ACA requires that most health plans provide coverage until the age of 26. Most employer-sponsored plans do not have to offer this benefit. Instead, the ACA sets out a transition period during which health plans must offer coverage to children who are not on their parents’ plan. During this time, children can stay on their plan through December 31. Some employers choose to continue covering their children past this date.

Another key ACA policy is the mandate for employers to offer coverage to employees who work at least 30 hours a week. For smaller firms, this can be a steep learning curve. Currently, employers can be assessed a fine of $2,000 per employee who fails to comply with this requirement.

Finally, the ACA required health insurers to spend at least 80% of their premiums on health care. It also lowered payments to hospitals for some Medicare services. Health plans must disclose important information to their employers. This helps employers understand their insurance costs. Additionally, the ACA eliminated the so-called Cadillac tax. Those who purchase a plan that includes the ACA’s minimum essential health benefits must pay a certain percentage of their premiums towards quality improvements.

Other ACA rules allow individuals to enroll in coverage throughout the year. In states with State Innovation Waivers, this means that state-run health insurance marketplaces will continue to exist. These state-run marketplaces will provide coverage that is equal or better than what is available in the federal Marketplace. States can also tailor ACA policies to meet the needs of their own communities.