The Affordable Care Act (ACA) is a healthcare reform law that was signed into law in March 2010 by former President Barack Obama. Its primary aim was to expand healthcare coverage to millions of Americans who were uninsured.
The ACA is also known as Obamacare, and it includes policies such as expanding Medicaid eligibility, creating health insurance exchanges, and prohibiting insurance companies from denying coverage due to preexisting conditions.
Understanding the Affordable Care Act (ACA)
The ACA was designed to reform the healthcare industry and reduce the cost of healthcare coverage for those who qualify. It includes premium tax credits and cost-sharing reductions to lower expenses for lower-income individuals and families.
The ACA requires most insurance plans, including those sold on the Health Insurance Marketplace, to cover preventive services at no cost to policyholders. All ACA-compliant health insurance plans must cover specific “essential health benefits,” such as emergency services, family planning, maternity care, hospitalization, prescription medications, mental health services, and pediatric care.
The ACA allows states to extend Medicaid coverage to a wider range of people. As of September 2022, 39 states and the District of Columbia had exercised that option. There is an open enrollment period on the Health Insurance Marketplace every year during which people can buy or switch insurance plans.
Enrollment outside of the open season is allowed only for those whose circumstances change, such as marrying, divorcing, becoming a parent, or losing a job that provided health insurance coverage. The Inflation Reduction Act of 2022 extends the expanded ACA for three years, through 2025, for people who need financial assistance.
It also allows Medicare to negotiate the cost of prescription drugs and place an annual cap of $2,000 on the cost of drugs.
Key Features of the Affordable Care Act
The ACA expands access to insurance, increases consumer protections, emphasizes prevention and wellness, improves quality and system performance, expands the health workforce, and curbs rising healthcare costs. The ACA requires employers to cover their workers and provides tax credits to certain small businesses that cover specified costs of health insurance for their employees.
It created state- or multistate-based insurance exchanges to help individuals and small businesses purchase insurance. The law expanded Medicaid coverage for low-income individuals and allows young adults to remain on their parent’s policies until age 26. The ACA also prohibits lifetime monetary caps on insurance coverage, limits the use of annual caps, and establishes state rate reviews for insurance premium increases.
Pros and Cons of the Affordable Care Act
The ACA has its pros and cons. It expands healthcare availability to more citizens, prevents insurers from making unreasonable rate increases, and provides coverage for additional screenings, immunizations, and preventive care.
However, those already insured saw an increase in premiums, and taxes were created to help supplement the ACA, including taxes on medical equipment and pharmaceutical sales. The enrollment period is limited for new enrollees, and many businesses curtailed employee hours to avoid providing medical insurance.
Conclusion
The Affordable Care Act (ACA) was implemented to expand healthcare coverage to millions of uninsured Americans, and it includes policies such as expanding Medicaid eligibility, creating health insurance exchanges, and prohibiting insurance companies from denying coverage due to preexisting conditions.
The ACA was designed to reform the healthcare industry, reduce healthcare costs, and increase consumer protections. While the ACA has its pros and cons, including increased healthcare availability and prevention care, some people saw an increase in premiums, and taxes were created to help supplement the ACA.
The enrollment period for new enrollees is limited, and some businesses curtailed employee hours to avoid providing medical insurance. Despite changes to the ACA, such as the removal of the individual mandate penalty and the scaling back of the outreach program, the Inflation Reduction Act of 2022 extended the expanded ACA for three years, through 2025, for people who need financial assistance.