What Is the Affordable Care Act?

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 What Is the Affordable Care Act?

The Affordable Care Act, or Obamacare, was enacted in 2010 to provide health insurance to all Americans and decrease healthcare costs. The purpose of the Act is to extend the cost of health care insurance by having as many individuals as possible pay for it.

The Act creates an “individual mandate” for all Americans to buy healthcare insurance, effective 2014. Those without insurance can buy insurance through online “marketplace insurance exchanges” set up by either the state or federal government. If individuals do not have enough to purchase insurance, they may qualify for a federal insurance subsidy.

The Affordable Care Act seeks to cover uninsured Americans by making it illegal for healthcare insurance companies to deny coverage based on pre-existing conditions and expand Medicare eligibility for low-income people.

Nevertheless, that provision of the Affordable Care Act was declared optional for the states by the United States Supreme Court. As a result, many states, including Texas, Florida, Mississippi, Louisiana, and South Carolina, have declined to expand Medicare in their states.

What Is the Current Status of the ACA?

As of 2022, the Affordable Care Act is still an enforceable law. Nevertheless, the Trump administration opted not to provide Obamacare subsidies to insurance companies to help fund certain insurance plans. Several states have sued to overturn the executive order.

The Trump administration also revoked two contraceptive mandates established earlier. The first rule revoked was a mandate whereby employers must include birth control in their insurance plans, except if the employer has a religious or moral objection. The second revoked rule waives birth control costs for consumers, shifting the cost to insurance companies or employers.

President Joe Biden announced that a record 14.5 million people signed up for health insurance programs under the Affordable Care Act (ACA) during the latest enrollment period.

The enrollment window for many people in the United States ended on Jan. 15. Nevertheless, residents of California, Kentucky, New Jersey, New York, Rhode Island, and Washington, D.C., had until Jan. 31 to register.

People who signed up by Dec. 15 saw their new policies kick in on Jan. 1. People who signed up between Dec. 16 and Jan. 15 had their health coverage start on Feb. 1.

The enrollment record was sparked by an $80 million marketing campaign to build awareness and the financial assistance offered under the COVID-19 relief package approved last year that helped lower insurance premiums.

The record enrollment wasn’t unexpected.

Federal officials reported in mid-December that 4.6 million Americans had purchased health insurance early through healthcare.gov.

“[The] report is proof that our efforts are yielding results,” said Health and Human Services Secretary Xavier Becerra in a press release in mid-December. “Thanks to our unprecedented outreach campaigns and investments from the American Rescue Plan, millions of people across the nation are gaining health insurance with lower premiums and more choices than ever. We will continue working on getting more people covered throughout the remainder of the open enrollment period.”

Why Has My Insurance Policy Been Canceled?

Under the Affordable Care Plan, healthcare insurance plans must meet a minimal standard of coverage. For an insurance plan to be legal under the Affordable Care Act, the insurance plan must contain essential health benefits and have limited cost-sharing. If a plan does not meet either of those requirements, that plan is subject to cancellation.

What Are Essential Health Provisions?

The essential health provision requires that the insurance plan must at least contain the following benefits:

  • Ambulatory Care
  • Emergency Care
  • Maternity Care
  • Substance Abuse Treatment/ Rehabilitation Services
  • Laboratory Services
  • Prescription Services
  • Children’s Dental and Vision Care
  • Mental Health Care
  • Preventative Services and Chronic Disease Management
  • Coverage of Hospitalization

The Affordable Care Act mandates that all preventative services be covered with no out-of-pocket costs and that the mental health and substance abuse treatments meet federal criteria. In addition, insurance companies cannot impose annual dollar limits on the coverage of any benefit considered “essential.”

Many of these “essential” benefits are unnecessary for many patients. Men typically do not want maternity care; some individuals will never have kids, while some patients will never abuse substances. Many state plans do not include a benefit or two even though the benefit is considered “essential.” If you feel that an “essential” benefit is not needed, you can either seek a grandfather plan exception or move to another state.

What Is Cost-Sharing?

Under the Affordable Care Act, an insurance plan must cover at least 60% of out-of-pocket expenses. In other words, all insurance plans must, at a minimum, pay for 60% of all services while the patient, at a minimum, is responsible for 40% of all services. Insurance plans can cover a higher percentage, but they must cover at least 60% under the Affordable Care Act.

Nevertheless, the Affordable Care Act imposes a limit on out-of-pocket costs. Even if the insurance plan only covers the minimum 60%, people cannot pay more than $6,250 in out-of-pocket expenses, and families cannot pay more than $12,500 in out-of-pocket costs.

What Are Grandfathered Plans?

Grandfathered plans are plans which were implemented before March 23, 2010. If the insurance plan was implemented before March 23, 2010, you might be able to keep the plan even though it’s not in compliance with the essential benefits and cost-sharing requirements of the Affordable Care Act.

Job-based plans implemented after the 2010 date may be able to maintain their grandfather status if the plan has not substantially cut costs or benefits since implementation. “Job-Based” means the insurance plan was provided by the employer rather than bought by the patient themselves.

Regardless of how the patient obtained the plan, the insurance company itself must notify the patient that the plan is a grandfathered plan. If an insurance company decides to cancel a grandfathered plan, the company must provide at least 90 days’ notice.

How Does the Ban on Pre-Existing Condition Discrimination Work?

Under the Affordable Care Act, insurance companies cannot refuse to sell or renew policies to anyone with a pre-existing condition.

Under the Affordable Care Act, “pre-existing condition” is defined as:

  • Genetic info
  • Health status
  • Medical condition
  • Claims experience
  • Medical history
  • Disability
  • Receipts of other health care plans
  • Evidence of insurability

Any other health-related status determined appropriate by the Secretary of Health and Human Services.

Additional PPACA requirements that include penalties for non-compliance are:

  • High-value plans: The Cadillac tax scheduled to take effect in January 2022, which was included in the ACA but delayed several times from being implemented, was fully repealed in December 2019, preventing the tax from ever taking effect.
  • IRS information returns: The PPACA imposes significant information-reporting responsibilities based on an employer’s health plan and the number of employees. This IRS Q&A provides information on reporting requirements and possible penalties.

Do I Need a Lawyer If I Am Being Denied Insurance or Benefits?

The goal of the Affordable Care Act is to provide an expanded minimal standard of health care for those who were previously uninsured. If an insurance company or a health care provider is refusing a health care service, then the Affordable Care Act has been violated. An experienced insurance attorney specializing in health care can fight for your legal rights.

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