Affordable Care Act (ACA)

What is the Affordable Care Act (ACA)?

The Affordable Care Act (ACA) is the comprehensive health care reform signed into law by President Barack Obama in March 2010. Formerly known as the Patient Protection and Affordable Care Act and often referred to as Obamacare, the Act includes a list of health care policies designed to expand access to health insurance to millions of uninsured Americans.

The act expanded Medical help eligibility, created health insurance exchanges, required Americans to buy or obtain health insurance, and prohibited insurance companies from denying coverage (or charging more) because of pre-existing conditions. It also allows children to stay on their parents’ insurance plan until they turn 26.

Key points to remember

  • The Affordable Care Act (ACA), also known as Obamacare, was signed into law in March 2010.
  • It was designed to extend health coverage to millions of uninsured Americans.
  • The law expanded Medicaid eligibility, created a market for health insurance, prevented insurance companies from denying coverage due to pre-existing conditions.
  • The ACA also required plans to cover a list of essential health benefits.

Understanding the Affordable Care Act (ACA)

The ACA was designed to reduce the cost of health insurance coverage for those who qualify. The law includes premium tax credits and cost sharing reductions to help reduce expenses for low-income individuals and families.

Premium tax credits reduce your health insurance bill each month. Cost-sharing reductions, on the other hand, reduce your out-of-pocket costs for franchisescopays and coinsurance, as well as the reduction of your maximum disbursements: the total amount you pay over a year for covered healthcare expenses.

All ACA-compliant health insurance plans, including all plans sold on the health insurance market—must cover specific “essential health benefits”, including:

  • Ambulatory patient services
  • Breastfeeding
  • Emergency services
  • Family planning
  • Hospitalization
  • Laboratory services
  • Mental Health and Addictions Services
  • Pregnancy, maternity and newborn care
  • Prescription drugs
  • Prevention and wellness services and chronic disease management
  • Pediatric services
  • Rehabilitation and adaptation service

The Cut Inflation Act 2022 would extend the expanded ACA by three years to 2025 for people who need financial assistance. It would also allow Medicare to negotiate the cost of prescription drugs and place an annual cap of $2,000 on drug costs. The legislation passed both the House of Representatives and the Senate and was awaiting President Biden’s signature on August 11, 2022.

In addition, the ACA requires that most insurance plans, including those sold on the market, cover at no cost to policyholders a list of preventive services. These include health checkups, patient counseling, vaccinations and many health checks. It also allowed states that chose to expand Medicaid coverage to a wider range of people. As of July 21, 2022, 39 states (including the District of Columbia) have exercised this option.

Every year there is an open enrollment period in the health insurance market during which people can buy or switch insurance plans. If you miss this period, you cannot enroll until the following year, unless you qualify for a special enrollment period due to a change in circumstances, e.g. you get married, divorced, become a parent or lose a job that provided health insurance coverage.

Special Considerations

A core element of the original ACA was the Individual Mandate, a provision requiring all Americans to have medical coverage, either through an employer or through the ACA or other source. subject to tax penalties. The mandate was abolished in 2017.

This mandate served the dual purpose of extending health care to uninsured Americans and ensuring that there was a large enough pool of insured people to support Medicare payments.

Critique of the Affordable Care Act (ACA)

Critics of the ACA have pointed out that it represented an unprecedented expansion of federal power in health care, as it required all individuals to purchase a service (health insurance), whether they wanted to or not.

This aspect of the law has been the focus of debate and was challenged in the US Supreme Court in 2012 by the National Federation of Independent Business. The court ruled in favor of the individual mandate as a constitutional exercise of congressional taxing authority, calling the penalties imposed on the uninsured a tax.

Recent History of the Affordable Care Act (ACA)

After the departure of President Obama, the ACA resisted opposition and a number of significant changes. If the Inflation Reduction Act is passed, it will bring other changes.

Trump Administration

On January 20, 2017, President Donald Trump’s first executive order after taking office signaled his intention to withdraw funding from the ACA, saying that executive agency heads should “delay implementation of any provision or requirement of AC”. [Patient Protection and Affordable Care] An act that would impose a fiscal burden on any state.” The intent of this order marked the first phase of Republican efforts to repeal and replace the ACA.

Government attempts in 2017 to completely repeal the law were unsuccessful. However, the government drastically reduced its outreach program to help Americans enroll in the ACA and cut the enrollment period in half.

Changes were made to the law to address some of the objections raised by opponents, while keeping the marketplace open to users. For example, in December 2017, as part of the Tax Cuts and Jobs Act (TCJA), Congress removed the penalty for not having health insurance. Beginning with the 2019 tax year, the individual mandate penalty was reduced to zero dollars, essentially removing the requirement that many Republicans had opposed.

By 2018, the number of Americans covered by the ACA had fallen to 13.8 million (from 17.4 million in 2015), according to a report by the health care research organization Kaiser Family Foundation. In 2021, 11.3 million people had plans through the ACA, but 14.8 million people were newly enrolled in Medicaid thanks to the ACA expansion.

In March 2019, House Democrats unveiled legislation to strengthen the law and expand coverage, while the Trump administration revealed it would seek to repeal the entire ACA. In a letter to a federal appeals court, the Justice Department said it agreed with a Texas federal judge, who declared the health care law unconstitutional and added that it would support the judgment on appeal. The case was heard by the Supreme Court in November 2020, with a coalition of 21 attorneys general defending the ACA.

Biden Administration

President Joseph Biden, who helped Obama pass the law, sought to strengthen the ACA during his tenure after vetoing further legislative attempts to overturn it.

In addition to establishing a new special enrollment period, the executive order signed by President Biden on January 28, 2021, also addressed “rules and other policies that limit Americans’ access to health care.” This executive directs federal agencies to review five areas and decide if action is needed in these areas:

  • Protections for people with pre-existing conditions
  • Work Requirements and Other Medicaid and ACA Access Limitations
  • Policies undermining health insurance markets, including the health insurance market
  • Policies increasing the difficulty of enrolling in Medicaid and the ACA
  • Policies reducing affordability or financial assistance for beneficiaries or dependents

The Inflation Reduction Bill, HR 5376, is a scaled down version of the Build Back Better Act proposed in 2021. It was awaiting President Biden’s signature on August 12, 2022. The bill is designed to reduce inflation. inflation and reduce the deficit. , but it includes provisions that affect health care.

The Inflation Reduction Act would extend financial assistance to ACA enrollees through 2025 instead of 2022. It also expands eligibility, allowing more middle-class people to receive assistance to premiums. Extending the ACA would cost about $64 billion.

The essential

The Affordable Care Act (ACA) was created in 2010 and is more commonly known as Obamacare. It extended health care coverage to millions of previously uninsured Americans. The law required all Americans to purchase (or otherwise obtain) health insurance and prohibited insurance companies from denying coverage (or charging more) because of pre-existing conditions. It also allows children to stay on their parents’ insurance plan until they turn 26.

The ACA also created the health insurance market, through which eligible individuals can find and purchase health insurance policies. All ACA-compliant health insurance plans, including those sold on the market, must cover a number of essential health benefits. The ACA may continue to evolve with any new legislation.