Affordable Health Care and the Affordable Care Act
The Affordable Care Act (not the Affordable Healthcare Act) is the US healthcare reform law. The law makes healthcare and health insurance more affordable and more available to more Americans.
The Affordable Care Act, like the name suggests, seeks to make health insurance more affordable. It does this through a number of mechanisms including: new consumer protections, new rules and regulations on the healthcare industry, a regulated marketplace for subsidized insurance, and through the expansion of public healthcare programs like Medicare and Medicaid.
The Affordable Care Act also includes measures to cut the growth in healthcare spending in the US and includes other measures to generally improve the healthcare system as well.
TIP: Sometimes people call the Affordable Care Act the Affordable Health Care Act. It’s an easy switch-up considering one of the main focuses of the law is to make healthcare (specifically health insurance) more affordable for more Americans. The proper name for the law is the Patient Protection and Affordable Care Act, or ObamaCare for short.
What Does “Affordable” mean in the Affordable Care Act? The “affordable” part is denoting the many specific provisions that seek to make care more affordable in general: it denotes cost assistance (which makes coverage more affordable for those who qualify), it denotes coverage being affordable for those who were previously priced out of coverage, it denotes long-term cost curbing measures, it denotes new limits on maximums and cost sharing, it denotes exemptions for unaffordability, it denotes expanded benefits, kids staying on parents plans, closing the donut hole, expanding Medicaid, offering tax breaks to small businesses, etc. This doesn’t mean every family will see rates decrease under the ACA (in fact those without assistance have seen rates go up despite some curbing of cost growth). It just means that the act seeks to make coverage more affordable in general, so far a lot of the provisions are working, but there are still some sticking points.
I would suggest shopping around for plans, because it seems like your specific plan is seeing a rate hike. There may well be nothing you can do in your position, and that is unfair. But, there are lots of considerations here.
The Affordable Healthcare Act is The Patient Protection and Affordable Care Act
Sometimes mistakingly called the Affordable Healthcare Act, The Patient Protection and Affordable Care Act of 2010 is the official name for the new healthcare law. Since that name is so long people usually refer to the law as the Affordable Care Act or ObamaCare, or just say ACA, PPACA for short.
The Affordable Care Act was signed on March 23, 2010 by President Barack Obama and includes about 400 sections of reforms to the health insurance and healthcare industry. We discuss the law in depth on our site but we suggest taking a moment to skim over a summary of each provision in the Patient Protection and Affordable Care Act so you can know what is in it for yourself.
If your ready to get insurance now just click here to find your State’s health insurance marketplace to apply for and enroll in subsidized health insurance plan.
Ways the ACA Addresses Affordable HealthCare
The ACA addresses affordable healthcare and affordable health insurance in a number of ways including but not limited to:
- People with preexisting conditions can’t be charged more or denied treatment.
- There are no more annual or lifetime dollar limits on care.
- The marketplaces subsidize premium costs and out-of-pocket costs.
- A single risk pool is created giving the individual and small group markets the same buying power as large group markets.
- New rules and regulations stop insurance companies from making unjustified rate hikes.
- Women cannot be charged more than men.
- The amount insurers can discriminate price based on facts like age is restricted.
- All plans must have minimum benefits regardless of cost.
- Medicaid is expanded meaning free or low-cost insurance for more Americans.
- Young adults can stay on their parents plan until 26.
- Medicare gets a big overhaul meaning cheaper care for seniors and less costs for hospitals.
- Doctors for the most part will see their rates stay the same or, in the case of Medicaid doctors will see their rates increase.
- Hospitals are incentivized to provide quality care over quantity care.
- and more.
What is “Affordable” HealthCare / What is “Affordable” Health Insurance
NOTE: The exact percentage amounts noted below are subject to adjustment every year.
The Affordable Care Act defines affordable health insurance as cost less than 8% of your annual modified adjusted gross income (MAGI) after subsidies.
With tax credits you can’t pay more than 9.5% of your household income for a base level Silver plan due to tax credits capping the maximum premium you pay. Folks who make less pay less.
In the workplace affordable insurance is defined as costing no more than 9.5% of household income for employee only insurance. However, as a safe harbor employers typically use employee only income to ensure they comply with the law. There is no affordability measure for dependents for employer based insurance.
On affordability exemptions: The requirement to have insurance and the fee for not having insurance was removed in 2019 in most states. That means you don’t have to worry about affordability exemptions for health insurance in most states. However for 2014 – 2018, and for states where you do have to get covered or pay a fee, you can’t find a plan on your State’s marketplace that will cost less than 8% of your families income you won’t be required to have insurance (specifics can differ by state), the good news is that most Americans shopping in the private market will be able to find an affordable option under the Affordable Care Act. Please note you may be exempt from the fee and still qualify for lower costs through the marketplace.
Should I Shop on the Affordable HealthCare Marketplace?
Every State has their own health insurance marketplace, but most State’s have a unique name for their marketplace. Whether you buy your insurance through a broker, the marketplace, or direct from a provider all “metal plans” (those are plans qualified to be sold on the marketplaces) will have the same prices. The law includes wording that ensures that when a broker or provider signs you up for insurance they can’t charge you more for the same plan you could buy through the marketplace. So if you would like help shopping you can either use the marketplace and talk to the navigators there or you can go direct through a broker or provider. For those who are not eligible for subsidies going through a provider or broker may be best, for those with lower-incomes the marketplace will most likely be the best bet for you.
Is the Affordable Care Act Good or Bad?
Whether the ACA is good or bad is a matter of opinion. Most people will get better quality care and more rights and many will get insurance for the first time or be able to get insurance due to affordability. Others will pay more for a plan equivalent to what they had before. The healthcare crisis in America is very real and the ACA addresses that, whether the costs outweigh the benefits is a personal choice. Remember the ACA doesn’t just do one thing, it does hundreds so before you stand behind or against the law take some time to educate yourself in regards to the facts and don’t forget to shop for affordable insurance on the health insurance marketplace. Please use our site as a resource to learn about the act yourself.