The Obama administration developed the concept of the Affordable Care Act (ACA) to ensure that consumers would be able to obtain affordable health insurance. Its concept included several points, such as stopping insurance providers from setting lifetime monetary caps on coverage, excluding children and others who have preexisting conditions, and canceling coverage - except where fraud had been found.

Instead, the new healthcare law, which was signed into law on March 23, 2010 by President Barack Obama, was intended to ensure that a minimum loss ratio would be used to establish the share of each premium used for healthcare. States would be allowed to examine insurance premium increases and deem them “unreasonable”. And it would establish a health insurance consumer assistance office (or an ombudsman) program. The program was nicknamed for the president who made it happen, Obamacare.

What Are the Goals of the ACA?

The ACA was crafted with three goals.

These included:

  • Ensuring that more Americans would be able to gain health insurance coverage
  • Making it simpler for medical professionals to deliver healthcare services to those who need them
  • Stopping some insurance company practices, providing tax credits to businesses, and insurance subsidies to individuals so overall healthcare costs can be reduced
icon76

Several features of the new law were included to make it easier for individuals to buy health insurance. The first, most well-known, and least-liked was the individual mandate, which made it a federal requirement for people who weren’t in a public insurance program such as Medicaid, TRICARE, or Medicare or covered by their employer’s health insurance program, had to buy coverage. This coverage would be found on the government’s healthcare exchange. Individuals or families found to be ignoring the mandate would pay a penalty via the Internal Revenue Service (IRS) when taxes were calculated. – The individual mandate fee was removed in 2019, so it no longer applies.

Employers faced a mandate, too. If they employed more than 50 people, they would be required to offer health insurance coverage to their full-time employees. If they didn’t, they would pay a penalty of $2,000 per each uninsured employee.

Finally, insurance costs would be capped as a percentage of someone’s income. This would happen through tax credits and premium subsidies for families whose income fell between 100 and 400 percent of the Federal Poverty Level.

How Does it Work?

This law has many moving parts. If one doesn’t work, the others won’t operate as intended. The ACA was intended to be a major overhaul of the nation’s healthcare system as it operated prior to the law. Before its enactment, tens of thousands of Americans were unable to afford to pay for health insurance, so they went without healthcare and hoped nothing major would happen to them or their families. Once it became law, everyone was required to obtain health insurance or pay a tax penalty via their tax returns.

Even with the penalty removed, the ACA continues to work through the health insurance exchanges set up to provide access to affordable plans for individuals and families who were not covered by their employer or who are self-employed. While the roll-out of these exchanges was rocky, many people have found plans in ACA and non-ACA healthcare exchanges available throughout the country.

Extended Medicaid

icon77

By March of 2014, enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) grew by more than 4.8 million people since the health insurance marketplaces became operational. This is because the ACA promoted increased Medicaid enrollment. By making changes in several functions of this public health insurance program, it was easier for people to qualify.

Eligibility was sharply expanded in states that chose to implement this change. Because the numbers of people and children who were covered went up, the numbers of uninsured went down. However, this only took place in states that implemented the expansion of Medicaid.

The enrollment process was simplified and modernized. The ACA states were required to offer multiple options to sign up (phone, mail, online), other than going to a local Medicaid or Income Support Division office.

Health Insurance Marketplace

icon78

The health insurance marketplaces are a key portion of the ACA. They are key because they are the only way you can sign up for an insurance plan during an open enrollment period. They were created by the ACA for the purpose of allowing you to see which plans are available in your state. You are also able to complete a side-by-side comparison, make your decision, then buy the plan you like. (This is the bronze, silver, gold, and platinum levels.) If your state has its own exchange, you can get to it though healthcare.gov.

You’ll be able to find information that helps you to decide on a plan. You’ll find out if your doctor is in the network for a particular provider; what medications are paid for; and be able to see what monthly premiums, copays, and deductibles are offered by each plan.

Essential Health Benefits

icon79

The Affordable Care Act makes it mandatory for health plans that are not grandfathered within the individual and small group markets to provide 10 essential health benefits.

These cover both services and items in the 10 benefit categories:

  • Ambulatory patient services
  • Breastfeeding
  • Emergency services
  • Family planning
  • Hospitalization
  • Laboratory testing services
  • Mental health and substance use disorder services (includes behavioral health treatment)
  • Pregnancy, maternity, and newborn infant care
  • Prescription medications
  • Preventive, wellness services, and chronic disease management
  • Pediatric services (including vision and oral care)
  • Rehabilitative and habilitation services and devices
  • Ambulatory patient services
    Receiving care at a doctor’s office, a clinic or a same-day surgery center. Home health services and hospice care also fall under this category.
  • Breastfeeding
    Under the ACA, breastfeeding services for moms who wish to do so will be more affordable and easier to obtain. Breastfeeding is required to be offered with no cost sharing.
  • Emergency Services
    Most ACA-compliant insurance plans do provide emergency room services. A visit to an emergency room that isn’t in your network won’t cost more if your plan is ACA-compliant.
  • Family Planning
    ACA compliant plans must cover contraceptive methods: barrier, hormonal, implanted devices, emergency contraceptives, sterilization, or patient education and counseling. No copay or coinsurance should be charged.
  • Hospitalization
    Care you receive as an inpatient (from doctors, nurses, and hospital staff including laboratory and other tests, medications, room and board, as well as surgeries, transplants, and care in a skilled nursing facility.
  • Laboratory Services
    ACA-compliant plans must pay 100% of every test when they are used to diagnose an illness. If lab tests are for other purposes, copays and deductibles will apply.
  • Mental Health and Substance Use Disorder Services
    ACA-compliant plans cover treatment for alcohol, drug, and other addictions. Some plans only cover treatment for 20 days annually.
  • Pregnancy, Maternity, and Newborn Care
    ACA-compliant plans must cover this with no cost to patients because it is preventive. It is an essential benefit because prenatal care is necessary during pregnancy.
  • Prescription Medications
    ACA-compliant plans must pay for at least one medication falling in every category in the US pharmacopeia. Any out-of-pocket costs you have should count toward your deductible.
  • Preventive and Wellness Services and Chronic Disease Management
    Preventive care visits should cost nothing to the patient, including copay.
  • Pediatric Services
    This is medical care given to infants and children, such as well-child visits and every recommended vaccine or immunization. Dental and vision care are also required to be offered to children under 19.
  • Rehabilitative Services
    This is healthcare that helps you regain or improve daily living skills and functioning that have been impaired or lost due to illness injury.
  • Habilitative services
    These include training for skills a child should be learning as a part of normal milestones: speech-language, occupational therapy, and services for those with disabilities.

Efforts to Repeal

On January 20, 2017, President Trump signed an executive order that told his administration leaders to “waive, defer, grant exemptions from, or delay” the implementation of some sections of the ACA. At the same time, Congress was again preparing the “repeal and replacement” of the ACA. Shortly before the death of Senator John McCain, the Senate tried again to repeal and replace the healthcare act. McCain gave a thumbs down on a vote regarding repealing the ACA, leading to the failure of the vote.

Because this effort failed, the Trump administration has been going after individual parts of the healthcare act. One of the biggest targets of this repeal effort has been the tax penalty for failure to obtain health insurance. This was upheld by the Supreme Court because the penalty was a tax, which Congress can create.

Almost from its inception, the ACA has been under attack from Republican states that didn’t like losing control over health insurance. In 2012, Republican state attorneys argued that, without the tax penalty, the justification for upholding the ACA was moot. The cost-sharing reduction subsidies to health insurers has also ended, making these policies less attractive to insurers.