The Affordable Care Act (ACA) aims to make health insurance more accessible while also helping to control costs, by mandating insurers cover preexisting conditions and permitting young adults under 26 to remain on their parents’ plans until age 26.
ACA (or Obamacare), also known as the Patient Protection and Affordable Care Act, took effect on March 23, 2010.
President Obama signed the bill into law on March 23, 2010
The Affordable Care Act enabled 30 million Americans to gain health coverage. It prohibited insurance companies from denying coverage due to preexisting conditions, reduced prescription drug costs, and allowed young adults under 26 to remain on their parents’ plans until age 26 – as well as prohibiting annual limits on benefits.
The new law mandates that insurers spend at least 80% of premium dollars on medical care and quality improvement rather than on advertising, overhead expenses or bonuses for executives – providing an incentive for companies to reduce rates while offering better value.
Even with its improvements, the Affordable Care Act remains in flux. Attorneys general from several states have filed suit to block certain provisions; and several others attempt to bypass its requirement that everyone obtain insurance or face a penalty fee.
The ACA requires insurance companies to cover preexisting conditions
Prior to the ACA, many Americans suffered from preexisting conditions that made them ineligible for insurance. People with histories of serious health conditions like cancer and diabetes found it nearly impossible to secure affordable coverage while those with lesser issues faced similar barriers; individual market insurers could look back five years in an applicant’s medical history and exclude them for an unlimited duration period.
The Affordable Care Act prohibits health insurers from discriminating against people with preexisting conditions and requires them to devote 80% of premium dollars on medical care and quality improvement, rather than marketing, overhead, or bonuses for executives. Furthermore, it prohibits lifetime and annual limits for essential benefits like prescription drugs and maternity care coverage.
It expands Medicaid coverage
The Affordable Care Act (ACA) mandates that insurance companies spend at least 80% to 85% of premium payments directly on actual care, with any remaining going towards profits or customer refunds or customer benefits. This ensures customers will get more value out of their premium payments while helping reduce deficit spending; multiple new taxes have also been implemented in order to fund it, such as medical device and pharmaceutical taxes.
The Affordable Care Act expands Medicaid coverage to those making up to 133% of the poverty threshold, helping reduce uncompensated care costs that have previously strain state budgets and streamlining eligibility, enrollment and renewal processes for Medicaid, CHIP and subsidized exchange plans.
It offers tax credits to help people buy insurance
Obamacare is a comprehensive health care reform that includes subsidies to help families afford their insurance costs and consumer protection from insurance company tactics that increase costs or limit coverage. Millions of Americans have benefitted from its provisions.
Families earning incomes between 100 to 400 percent of the poverty level may qualify for premium tax credits to cover health insurance premiums, with transitional reinsurance to reduce premium costs for high-cost individuals.
The Affordable Care Act requires insurance companies to spend at least 80% of premium dollars on medical care and quality improvements; otherwise they must refund the difference to consumers, helping keep health care costs down for all. In addition, employers are prohibited from dropping employee health coverage.
It requires insurance companies to cover maternity care
Individual and small-group plans that adhere to the Affordable Care Act must provide at least 10 essential health benefits, such as maternity care. Plans may differ in their coverage details. Furthermore, federal law mandates insurance providers allocate at least 80% to 85% of premiums towards medical costs.
Women of reproductive age were positively impacted by the Affordable Care Act (ACA), with decreased uninsurance and an increase in both group and nongroup private coverage. Furthermore, delaying or forgoing medical care because of cost decreased by 1.5 percentage points between the second and third years after its implementation.
The Affordable Care Act required large employers to offer health coverage that meets certain specifications or face penalties, and permitted individuals to purchase affordable health coverage through a public exchange called Marketplace.
