The Affordable Care Act’s Impact on Health Insurance
By SMART Health Claims
The Affordable Care Act aims to substantially reform the American health insurance system by lowering costs, increasing benefits, and increasing the number of people covered.
Through a number of new initiatives, insurance will be easier for the 55 million currently uninsured Americans to secure; opening up new avenues for healthcare not available to uninsured citizens before. It’s important to remember that a healthier country (which is the ultimate goal of the Affordable Care Act) is a more productive country.
Read on to find out how the Affordable Care Act’s insurance reform initiatives will have a profound impact on local health departments and the U.S. as a whole.
There are four key ways the Affordable Care Act is attempting to change health insurance in America: Medicaid expansion, insurance marketplaces, policy reforms, and individual/employer mandates.
Affordable Care Act and Insurance: Medicaid Expansion
Under the Affordable Care Act, the Medicaid eligibility floor will raise to 133% of the Federal Poverty Level ($26,951 for a family of three in 2013). The eligibility expansion is particularly helpful in covering childless adults and working parents, as more in those demographics will now be eligible.
There is a small snag here though as the expansion is technically optional for each state to enact, and at least 14 states have decided not to participate in the expansions, which will lead to less coverage available to their citizens.
Affordable Care Act and Insurance: Health Insurance Marketplaces
Health Insurance marketplaces, also known as exchanges, will also make getting insurance easier than ever for consumers. The exchanges are run either through state governments or the federal government, and are a simple and safe way to shop for health insurance. Consumers fill out a single application and the insurance companies taking part in the exchanges let them know what they’re approved for. Consumers are also eligible for affordability credits and subsidies through the exchanges.
The biggest benefit of all though, is that only “Qualified Health Plans” are sold in the exchanges, giving consumers peace of mind. The private insurance plans have to meet certain requirements for benefits and coverage in order to be allowed into the exchanges, and all must comply with Affordable Care Act reforms.
Affordable Care Act and Insurance: Reforms
In order to protect the consumer, the government is setting mandatory practices the health insurance companies must stick to. It makes access to insurance easier and helps control costs to consumers.
Under the Affordable Care Act, most insurers MAY NOT:
- Deny coverage due to pre-existing conditions
- Rescind coverage over simple paperwork mistakes
- Set lifetime caps on essential coverage
- Charge women more than men
Under the Affordable Care Act, most insurers MUST:
- Cover “essential health benefits”
- Cover preventative services with no copays or deductibles (this includes services like cancer screenings and vaccinations)
- Cover young adults on their parent’s plans through age 26
- Justify double-digit rate increases
Affordable Care Act and Insurance: Individual/Employer Mandates
There are penalties for both individuals and employers should they not meet certain requirements. Individuals must obtain minimum essential coverage or pay a penalty. The coverage obtained can be through exchanges, private, or public insurance providers. There are a few exemptions in the case of religious objections or financial situations through. Any “large” employer (defined as 50+ employees) must offer minimum essential coverage to all full-time employees or face penalties as well.
Affordable Care Act and Insurance: Impact on Local Health
It’s possible fewer people will come to rely on local health departments for services should they receive insurance coverage that wasn’t previously available. If those patients do return with insurance, it will be more important than ever that the departments have smart billing processes in place to collect on the insurance.
If fewer people seek services through local health departments, the Affordable Care Act may have the extra benefit of freeing up more funds for research and PSA campaigns into ways to stop preventable diseases in America. Obesity and diseases related to smoking are major hurdles our country faces, and make us less productive as a nation. They could also have more funds available in the case of an emergency or outbreak.
Through all of these reforms, the Affordable Care Act is predicted to cut the uninsured rate in America by half by 2016. There’s still a long way to go, but the sweeping reforms could just meet those goals.