What Is the Affordable Care Act (ACA)?
President Barack Obama signed the Affordable Care Act (ACA) into law in March 2010. It is a comprehensive healthcare reform bill. The Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, is a set of healthcare regulations aimed at increasing access to health insurance for millions of uninsured Americans. 1
The act increased Medicaid eligibility, established health insurance exchanges, required Americans to buy or otherwise obtain health insurance, and barred insurance companies from denying coverage (or charging extra) because of pre-existing diseases. It also permits youngsters to stay on their parent's health insurance coverage until they reach the age of 26.
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KEY TAKEAWAYS
- In March 2010, the Affordable Care Act (ACA), often known as Obamacare, was signed into law.
- It was created to provide health insurance to millions of Americans who were previously uninsured.
- The law increased Medicaid eligibility, established a health insurance marketplace, prohibited insurance companies from denying coverage due to pre-existing conditions, and mandated that plans cover a list of essential health services.
- Subsidies for coverage purchased through the marketplace are available to low-income families.
Understanding the Affordable Care Act (ACA)
The Affordable Care Act (ACA) was created to make health insurance more affordable for those who qualify. Premium tax credits and cost-sharing reductions are included in the bill to help lower-income people and families cut costs.
Warning: You only have until Aug. 15, 2021, to enroll in or adjust your health insurance marketplace coverage under the special enrollment period created to assist people in navigating the recent economic crisis, during which many people lost employer-provided health insurance temporarily or permanently. The ACA website, HealthCare.gov, has detailed regulations about who qualifies and under what circumstances.
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Premium tax credits reduce your monthly health insurance bill. In the meantime, cost-sharing reductions lower your out-of-pocket payments for deductibles, copays, and coinsurance, as well as your out-of-pocket maximum, which is the total amount you pay for covered health expenses in a year.
All ACA-compliant health insurance plans, including those provided through the Health Insurance Marketplace, are required to cover certain "essential health benefits," such as:
- Patient ambulatory services
- Breast-feeding emergency assistance
- Creating a family
- Hospitalization
- Services in the laboratory
- Services for mental health and substance abuse disorders.
- Maternity, neonatal care, and pregnancy
- Medications on prescription
- Services for prevention and wellness, as well as chronic disease management.
- Pediatric services are available.
- service for rehabilitative and habilitative purposes.
Furthermore, the Affordable Care Act (ACA) mandates that most insurance plans, including those provided on the Marketplace, include a list of preventative care at no cost to consumers. Checkups, patient counseling, vaccines, and a variety of health exams are among them. 8. It also allowed states that opted in to cover a broader group of people through Medicaid. That option had been used by 37 states and the District of Columbia as of June 2021.
Every year on the Health Insurance Marketplace, there is an open enrollment period during which customers can buy or switch insurance policies. If you miss this deadline, you won't be able to enroll until the following year unless you qualify for a special enrollment period due to a change in your circumstances, such as marriage, divorce, becoming a parent, or losing a job that offered health insurance.
Special Considerations
The individual mandate, which required all Americans to get healthcare coverage—whether through an employer, the ACA, or another source—or face tax penalties, was a major feature of the original ACA. In 2017, the mandate was repealed.
This mandate accomplished two goals: it provided healthcare to uninsured Americans and it ensured that there was a large enough pool of insured people to finance health insurance payouts.
Criticism of the Affordable Care Act (ACA)
The Affordable Care Act (ACA) was criticized by many as an unprecedented expansion of federal power in the healthcare business since it obliged everyone to acquire a service (health insurance) whether they wanted to or not.
This provision of the statute was a hot topic of dispute, and the National Federation of Independent Businesses challenged it in the United States Supreme Court in 2012. The court upheld the individual mandate as a constitutional exercise of Congress's taxing authority, classifying the penalties imposed on the uninsured as a tax.
Recent History of the Affordable Care Act (ACA)
The Affordable Care Act (ACA) faced criticism and a number of important revisions after President Obama left office.
Trump administration
Former President Donald Trump signaled his intention to defund the Affordable Care Act (ACA) in his first executive order after taking office on Jan. 20, 2017, saying executive agency heads should "delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any state." 13. The goal of this order was to herald the start of Republican attempts to repeal and replace the Affordable Care Act.
The government's attempt to repeal the law completely in 2017 was unsuccessful. The government, on the other hand, significantly reduced its outreach effort to assist Americans in signing up for the ACA and cut the registration period in half.
The law has been amended to meet some of the problems voiced by opponents while still allowing consumers to use the marketplace. For example, as part of the Tax Cuts and Jobs Act (TCJA), Congress eliminated the penalty for not obtaining health insurance in December 2017. The individual mandate penalty was cut to zero dollars for tax year 2019, thereby eliminating a requirement that many Republicans had opposed. 13
According to a report from the Kaiser Family Foundation, the number of Americans covered by the Affordable Care Act had declined to 13.8 million in 2018 (from 17.4 million in 2015).
14. By 2021, 11.3 million people had ACA-compliant insurance, while 14.8 million people had newly registered for Medicaid as a result of the ACA expansion.
In March 2019, House Democrats introduced proposals to strengthen the Affordable Care Act and extend coverage, while the Trump administration announced its intention to abolish the entire law. The Justice Department stated in a letter to a federal appeals court that it agreed with a federal judge in Texas who found the healthcare legislation unconstitutional and that it would fight the decision. 17. The issue was considered by the Supreme Court in November 2020, with the ACA being defended by a group of 21 attorney generals.
Biden administration
President Joseph Biden, who aided Obama in passing the law, is largely expected to work to strengthen the law during his tenure and veto any attempts to repeal it.
The executive order, signed by President Biden on Jan. 28, 2021, focuses on "laws and other practices that hinder Americans' access to health care," in addition to establishing a new special enrollment period. This executive order directs federal agencies to look into five areas and determine whether or not action is required
- People with pre-existing conditions are given special consideration.
- Work requirements and other restrictions on Medicaid and ACA coverage
- Health insurance markets are being harmed by policies such as the Health Insurance Marketplace.
- Policies that make it more difficult to enroll in Medicaid and the Affordable Care Act (ACA)
- Policies that restrict grantees' or their families' access to affordable housing or financial assistance
The Bottom Line
The Affordable Care Act (ACA), also known as Obamacare, was signed into law in 2010. Millions of formerly uninsured Americans now have access to healthcare. The act mandated that all Americans acquire (or otherwise obtain) health insurance, and it prevented insurance companies from denying coverage (or charging higher premiums) because of pre-existing diseases. It also permits youngsters to stay on their parents' health insurance coverage until they reach the age of 26.
The Affordable Care Act also established the Health Insurance Marketplace, which allows eligible consumers to shop for and purchase health insurance policies. A number of essential health benefits must be covered by all ACA-compliant health insurance policies, including those provided through the marketplace. Over the next few years, the Biden administration is projected to extend the ACA.