Rising healthcare costs disproportionately impacts the weakest sections of society. So, President Obama announced a detailed healthcare reform in March 2010, which aims at offering cost-effective healthcare services to US citizens. The Affordable Care Act (ACA), popularly recognized as Obamacare, includes provisions that stretch out the coverage to all uninsured US citizens. It also extends Medicaid eligibility, makes insurance exchanges, and avoids the state where insurers deny coverage. This act also permits children under 26 to access healthcare services through their guardians’ insurance plan.
Objectives of the ACA
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Obamacare (or Affordable Care Act) aims to cater to these three goals primarily:
- Affordability – Makes insurance more cost-effective and accessible to all Americans. Through this law, the poorest US citizens can get grants and decrease their healthcare service expenses. Citizens with household revenue till 400 percent of the federal poverty level (FPL) can avail this act’s several benefits.
- Greater Coverage – Extends the scope of the Medicaid healthcare plan to offer assistance to all U.S. citizens with income less than 138 percent of the FPL.
- Innovate delivery methods to lower healthcare expenses
Affordable Care Act Benefits
One year before Obamacare rolled out, roughly 32 million U.S. citizens were uninsured because insurance providers denied them coverage. Almost 15 percent of Americans had to pay a high price to cover their medical expenses.
When 2016 ended, the uninsured Americans’ rate came down to 10.9 percent. Through Obamacare, millions of Americans have availed healthcare services at a low cost since insurers can no longer deny service to these policyholders.
Affordable Care Act Provisions
Young Adult Coverage
All US citizens till 26 years of age can take advantage of their parents’ individual plan or employer-sponsored healthcare service plans. This provision applies universally even if they’re married, pursuing higher studies, or availing services other than their parents’ plans
Obamacare also aims to extend Medicaid and young adult’s insurance plans to cover uninsured poor US citizens. Originally, it wanted to cover any person under 65 years with income less than 138 percent of the FPL by expanding government-sponsored Medicaid. Through this act, low-income families that don’t have kids also qualify for the Medicaid plans.
While this scheme covers all the above groups, a 2012 Supreme Court judgement gives the states the freedom to choose not to implement the act. From January 2018, each US state can either implement Medicaid expansion or continue with the previous healthcare arrangement. So, check your state’s decision on this act before availing these services.
Obamacare makes health insurance compulsory and as a result, may increase household expenses of the people unable to pay for these services. So, the Federal Government is funding individuals and families who earn less than the decided FPL sum. Individuals that have an income less than 400 percent of the FPL, that is nearly $48,000, can use this subsidized coverage. Additionally, a household of 4 people with income lower than $98,000 can also avail subsidy benefits. You can use eHealthInsurance to determine the subsidy amount.
Due to Obamacare, insurance companies cannot deny their policy-holders service if they already have a condition or serious illness. This provision doesn’t apply in cases of insurance fraud. Furthermore, insurance companies cannot charge an exorbitant price for females or patients facing chronic diseases.
This act has also mandated insurers to pay for preventive care services their policy-holders avail. They’re also obligated to pay for essential health advantages that decrease the chances of getting cancer and other critical illnesses. The rebate rule also mandates insurers to spend 80 percent of their policy-holders’ money on actual healthcare services instead of spending all of it on administrative costs. For organizations, group healthcare insurance programs must begin within the 90-day mark from the time they’re found eligible for that particular plan.
A Note on Grandfathered Plan
Though Obamacare regulates every health insurance program in the USA, it doesn’t apply to grandfathered plans. You can classify grandfathered plans in one of these categories: –
- Individual healthcare insurance bought before the 23rd March of 2010.
- Group insurance or employer-funded plans that started before the 23rd March of 2010.
These policies don’t have to cover citizens with pre-existing conditions. Additionally, they’re also free from fulfilling ACA needs to their policy-holders. Insurers of these programs must inform their policyholders about this status and give them an option to opt-out of their plans. Their beneficiaries can also browse the ACA Healthcare Exchange to get details about new plans that covers their current health conditions as well.
Applying for Coverage
During the enrolment period, individuals seeking insurance coverage can understand their options by:
- Browsing programs and registering for them online
- Calling (800) 318-2596 or (855) 889-4325. This option is available 24*7*365 for all Americans.
- Special helpline for small business owners: (800) 706-7893 or (800) 706-7915
Here are affordable care act requirements to ensure you get coverage: –
- Data on the household size
- Addresses and birthdates of all the people to be covered in the policy
- For US citizens, the social security number is needed
- For legal immigrants, the documentation number is needed
- Employment and income details of every person in the family that seeks coverage
- Present year’s estimates of household income
- Existing healthcare program figure
- For company-funded program, all eligible members need employer coverage forms
Affordable Care Act Pros and Cons
- Subsidies offer financial assistance to many low-income families. Also, the 80/20 rule ensures that insurers spend 80 percent of your premiums on healthcare facilities.
- The inclusion of preventive care makes sure that health-conscious consumers can avail regular check-ups and wellness visits without co-pay, deductible, or co-insurance.
- For select states that have opted for it, this act expands the scope of Medicaid and covers more uninsured Americans than before.
- Parents’ insurance plans cover dependents for a longer time.
- Increased costs for the citizens who are not eligible for the subsidies
- Some businesses may find paying penalties more cost-effective than providing employer-sponsored plans.
- It complicates shopping for coverage
- Greater costs in case of marketplace uncertainties