In March of 2010, President Barack Obama signed the Affordable Care Act (ACA) into law, and health reform was passed.
Provisions of the law were intended to:
- Expand coverage options
- Increase access to services
- Ensure that more money is spent directly on care
- Reduce costs
Expand coverage options
- The establishment of Health Insurance Marketplaces (also known as exchanges) to provide individuals and small businesses a method to compare and enroll in private coverage options, as well as Medicaid plans, if eligible. These marketplaces also alert beneficiaries to the availability of financial assistance through advanced tax credits to lower the monthly premium and cost-sharing assistance. All marketplaces are available through
www.healthcare.gov, as well as accessible by phone at 1-800-318-2596. For coverage in 2016, the open enrollment period is Nov. 1, 2015 – Jan. 31, 2016.
- The expansion of Medicaid to everyone under 138 percent of the Federal Poverty Level. As a result of the 2012 Supreme Court decision on the ACA, states have the option of whether or not to expand their Medicaid programs. Currently, 27 states and the District of Columbia have expanded or have indicated they will expand. In states that choose to expand, the federal government pays 100 percent of the cost at first, and slowly reduces it to 90 percent.
- The allowance of young adults up to age 26 to stay on a parent’s plan. Children can remain on their parent’s plan until age 26 even if they don’t live at home, are married, or are not financially dependent on their parents.
Increase access to services
- The prohibition of insurance companies from denying coverage or charging someone more due to a pre-existing condition. Before Jan. 1, 2014, insurance companies were able to deny coverage for individuals based on pre-existing health conditions, or charge high-risk individuals more in order to keep costs down. Health insurers are no longer able to deny access to insurance coverage or charge more as a result of current or prior health conditions. This applies to all individual and small group health insurance policies.
- The elimination of annual or lifetime limits on insurance benefits. Prior to the ACA, insurers were able to put a dollar cap on the amount they’d pay for services for a beneficiary in a year. These were known as annual limits. Insurance companies were also able to put a dollar cap on the amount they’d pay for services over the entire time you were enrolled in the plan. These were known as lifetime limits. After these limits were reached, the consumer was expected to cover all costs beyond the limits. The ACA eliminated these annual and lifetime limits on essential services.
- The right to appeal denied access to services. Under the ACA, patients have the right to appeal a health insurance company’s decision to deny payment for a claim or to terminate an individual’s health coverage. Patients who have been denied coverage for a service or who have had coverage terminated first appeal to the insurer in an internal review process. If that does not resolve the problem there is an option for an external review conducted by the state or federal government that meets certain consumer protection standards contained in the ACA.
- Coverage of many preventive services at no cost to beneficiaries. Such services may include wellness visits, screenings, shots, counseling and more.
Ensure that more money is spent directly on care
- The condition that insurance companies must now spend 80 percent (for small group and individual market insurers) or 85 percent (for large group market insurers) of what they receive from enrollee premiums on care provision and quality improvement.
- Efforts to curb waste, fraud and abuse in federal programs. Provisions in the ACA significantly increase the government’s capability to monitor and discipline healthcare professionals and others who abuse the Medicare and Medicaid programs.
- The requirement on most individuals to have health coverage or otherwise face a tax penalty. Otherwise known as “the individual mandate,” it is intended to reduce uncompensated care and expand insurance plan risk pools to reduce coverage price. The penalty for not having coverage increases over the first three years. In 2015, the fee for not having coverage will be the greater of 2 percent of family income or $325 (per adult)/$162.5 (per child). For 2016 and each year after (adjusted for inflation), the penalty will be the greater of 2.5 percent or $695.
- The closure of the Medicare “donut hole” by 2020. The “donut hole” is the gap in Medicare Part D prescription drug coverage after a beneficiary reaches the coverage limit and before reaching catastrophic coverage. In the past, Medicare did not assist in covering drug costs in this range and beneficiaries were responsible for the full cost of each medication. However, the ACA implemented policy to close the gap by 2020 and provide rebates (financial assistance) for those who find themselves in this range before then.
- The creation of new entities like the Patient Centered Outcomes Research Institute (PCORI) and the Center for Medicare and Medicaid Innovation (CMMI). PCORI is nonprofit that seeks to increase the amount of evidence used in patient care choice and care model decision-making by funding comparative effectiveness research and involving patients in the process. CMMI, sometimes known as “The Innovation Center,” is a department that seeks to develop and test alternative payment and delivery models with the intention of increasing quality of care while reducing costs. CMMI then analyzes these models for best practices. To date, CMMI has implemented or is currently testing approximately 50 different models.