How Does The Affordable Care Act Work?

BrainStuff - HowStuffWorks
7 Oct 201304:49

Summary

TLDRThe Affordable Care Act (ACA), also known as Obamacare, aims to provide affordable health care to more Americans. It introduces the individual mandate, Health Insurance Marketplaces, and prohibits insurers from denying coverage for preexisting conditions. The ACA also includes provisions for employers, tax credits for small businesses, and requires insurers to spend at least 80% of premiums on health care.

Takeaways

  • 📚 The Affordable Care Act (ACA), also known as Obamacare, was signed into law by President Barack Obama on March 23, 2010.
  • 🏥 The ACA aims to address the issues of millions of uninsured people and high insurance costs in the United States by making affordable health care available to more Americans.
  • 🔄 Changes brought by the ACA are phased in over time, allowing for gradual adjustments rather than immediate overhauls.
  • 🏠 If you are satisfied with your current health insurance, you can keep it under the ACA.
  • 👶 Children under 26 can remain on their parents' health insurance plan, and states are expanding Medicaid coverage to include more people.
  • 🏦 The individual mandate requires most Americans to have health insurance, with a fee for those without coverage, such as $95 per adult and $47.50 per child in 2014.
  • 🛍️ Health Insurance Marketplaces are established by the ACA, allowing customers to compare different insurance plans and prices offered by providers.
  • 💰 Premiums may be lower for some based on income and family size, and insurers cannot deny coverage for preexisting conditions or charge women more than men.
  • 🌐 Preventative care, such as mammograms and checkups, is covered under the ACA, and insurers must spend at least 80% of premium money on actual health care.
  • 💼 Employers, both large and small, are affected by the ACA, with smaller businesses having access to the Small Business Health Options Program (SHOP) for affordable health plans and potential tax credits.
  • 🏛️ Larger businesses must provide insurance meeting minimum value standards or face an employer shared responsibility payment, and rate increases over 10% must be publicly justified.

Q & A

  • What is the full name of the Affordable Care Act?

    -The full name of the Affordable Care Act is the Patient Protection and Affordable Care Act.

  • Why is the Affordable Care Act sometimes referred to as Obamacare?

    -It is called Obamacare because President Barack Obama signed it into law on March 23, 2010.

  • What are the two main issues the ACA aims to address in the U.S. healthcare system?

    -The ACA aims to address the issues of millions of uninsured people and the high cost of insurance compared to other comparable countries.

  • How does the ACA plan to make health care more accessible and affordable?

    -The ACA plans to make health care more accessible and affordable by creating Health Insurance Marketplaces and implementing changes to insurance policies.

  • What is the individual mandate under the ACA, and how is it enforced?

    -The individual mandate requires most Americans to have some form of health insurance. It is enforced by a fee for those without insurance, which was $95 per adult and $47.50 per child in 2014, with a maximum family payment of $285.

  • What are Health Insurance Marketplaces, and how do they help consumers?

    -Health Insurance Marketplaces are virtual spaces run by the federal government or state governments where consumers can compare different insurance plans and prices offered by providers, potentially qualifying for lower premiums based on income and family size.

  • How does the ACA affect insurance coverage for preexisting conditions?

    -Insurers under the ACA are no longer able to deny or revoke coverage for preexisting conditions.

  • What is the significance of the 80/20 rule in the ACA?

    -The 80/20 rule requires insurers to spend at least 80% of the money they receive from premiums on actual health care. If they spend too much on overhead, consumers receive a rebate.

  • How does the ACA impact employers, especially small businesses?

    -Small businesses with less than 50 employees can use the Small Business Health Options Program (SHOP) to compare and purchase affordable health plans, and may be eligible for tax credits.

  • What is the employer shared responsibility payment, and when did it become effective?

    -The employer shared responsibility payment is a penalty for larger businesses that do not provide insurance meeting a minimum value standard or if one of their employees gets a better deal in the individual marketplace. It became effective in 2015.

  • How can individuals find more information about the Affordable Care Act?

    -Individuals can find more information about the Affordable Care Act by visiting www.healthcare.gov.

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Healthcare ReformAffordable Care ActObamacareInsurance CoverageMedicaid ExpansionIndividual MandateHealth InsurancePreventative CareEmployer MandateHealthcare.gov
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