Affordable Care Act

The Affordable Care Act (Obamacare) is a law that was passed with the goal of ensuring that the millions of Americans without health insurance would have access to healthcare. 

When:   It was signed into law on March 3, 2010 and required that every American have health insurance by March 31, 2014 or they would incur a tax penalty.

Why:   The main purpose was to reduce the cost that the government pays toward healthcare. Both Medicare and Medicaid are government health plans.

How:   The Affordable Care Act was signed into law in 2010 but was phased in over a 4-year period. See the key changes that were incurred each year.

Key changes in 2010

  • Indoor tanning services were assessed a tax.
  • Children were allowed to stay on their parent’s plan until they turned 26.
  • Private plans were required to cover preventive services with no co-payment, coinsurance or deductible.
  • Insurance companies could not drop you from coverage for a serious condition.
  • Insurance companies could not impose a lifetime coverage limit nor could they deny coverage to children with pre-existing conditions. 

Key changes in 2011

  • Medicare plans must offer preventive services with no deductibles or co-pay.
  • Insurance companies must prove that they spent at least 80% of the premium payments on medical services, not other things like advertising or salaries.
  • Health insurance companies have to submit justification for all rate hikes.

Key changes in 2012

  • Health plans must begin to move away from paper records and must start to implement a more secure, confidential, electronic exchange of health information. 

Key changes in 2013

  • Manufacturers and importers of medical devices must pay a tax.
  • Federal funds were increased so that Medicaid could offer no-cost preventive services.

Key changes in 2014

  • Medicaid eligibility was expanded to include those with incomes up to 133% of the federal poverty level.
  • Americans that do not purchase health insurance will be taxed. 
  • Insurance companies were prohibited from refusing to sell coverage or renew policies because of a pre-existing condition. 

Please refer to www.hhs.gov for the full, detailed list of all changes for each year.

In a nutshell

The goal of the Affordable Care Act is to provide access to quality healthcare for all. Some people are under the impression that this really means free health insurance coverage for all. But for a large percentage of Americans, no cost health insurance coverage is just not an option.

To ease the burden placed by the uninsured, the Affordable Care Act did expand Medicaid coverage so that more people would qualify. It also provided cost incentives to those eligible citizens who were unable to qualify for Medicaid coverage but had difficulty paying premium costs.

In spite of its intent, the Affordable Care Act does not fully support the needs of all; including adults with lower incomes, the uninsured, the working poor and others, who may be insured, yet are unable to afford the huge out of pocket costs. Add to this an increase in taxes, rising health care costs and poor reimbursement and you can understand why many have called for the Affordable Care Act to be repealed. 

So should the Affordable Care Act be repealed?

There has been a lot of opposition to the Affordable Care Act. Numerous lawsuits have been filed citing that it is unconstitutional to require people to buy healthcare insurance from a private carrier or pay a penalty. The Supreme Court ruled it was unconstitutional to impose a tax and the House of Representatives has voted to repeal the law numerous times.  

Health insurance carriers have the burden of providing coverage to hundreds of new plan members; some of them with very serious health conditions. They continue to express concern over the ability to stay afloat in this climate of change.

To understand the issues with the Affordable Care Act, you have to understand how health insurance has always been structured.

  • Health insurance coverage was usually voluntary, not mandatory. 
  • Typically, the young and healthy was the preferred plan member and the very sick were deemed to be uninsurable; or if insurable, the cost was very high. 
  • A health carrier could underwrite a plan to exclude or severely limit coverage for certain medical or preexisting conditions. For example, underwriting could refuse to cover any treatment related to a patient’s high blood pressure for a pre-determined period of time or for the life of the plan. 
  • A carrier could drop you from coverage for a serious condition.
  • Your premiums could be raised as deemed necessary by the health carrier.
  • Employers could refuse to offer health insurance to their employees.
  • Caring for the uninsured was shifted to the government or to private citizens in the form of higher health care costs and higher taxes.

 The Affordable Care Act changed some of this by:

  • Eliminating most preexisting limits; as long as you do not go more than 63 days without health coverage.
  • Decreasing the uninsured by setting additional taxes for those that do not have health insurance. This is now tied into the filing of yearly tax returns.
  • Eliminating the ability to be dropped due to a serious condition (as long the premium is paid).
  • Requiring that health carriers seek "permission" to raise insurance rates.
  • Establishing penalties for employers if they refuse to offer health insurance (for employers with over 50 full-time employees).
  • Requiring that plans cover children to age 26. 
  • It has also expanded coverage for well care or preventative services with no upfront costs.

The Affordable Care Act changed all of this and more so depending on what side you are on in this issue, clearly, it has its pluses and minuses.

Does the Affordable Care Act compare to Universal Care?

No. Universal Healthcare and the Affordable Care Act are not the same. Equal access to care with limited out of pocket costs expected under Universal Care is not represented under the Affordable  Care Act.

Please note: My personal observations and opinions are represented in portions of this article. Do your homework to determine where you stand on this issue. 

2017 side note:  

The change in administration is so new, only a week out as of this update, so we don't really know the true fate of the Affordable Care Act as of yet. We expect the Affordable Care Act to be repealed, rewritten and replaced with a new Act that will retain some of the elements of the old act. 

The only thing that appears to be fairly certain is that those covered under an Affordable Care Plan today, will not suddenly be dropped from coverage in the middle of the night without some type of replacement in sight.

The thought is that: as long as premiums are paid, you will have coverage until 12/31/17.

What the new plan will look like, will it be affordable, mandatory, cover pre-existing conditions?

The answers to this is anybody's guess...stay tuned.

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