What Is the Affordable Care Act and How Does It Work?

Do you need to enroll in your own health insurance plan? You may be wondering, how does the Affordable Care Act work, and how can it help you? The Affordable Care Act isn't perfect, but it's done a lot to help Americans who need health insurance. No matter why you need a new plan, consider how ACA insurance plans can benefit you. Keep reading to learn more.

What Is the Affordable Care Act?

The Affordable Care Act (ACA) is another name for Obamacare, and it came into effect in 2010. This law aimed to reform health care in the United States, and it has helped many Americans. While people have criticized the law, it does have a few helpful aspects. It's particularly useful for people who don't qualify for insurance through a job, Medicare, or Medicaid. Consider the three main goals of the Affordable Care Act and how those goals can help you.

Makes Coverage More Affordable

The biggest goal of the ACA is to make health insurance more affordable to more people. Before the law passed, you might have needed to pay significantly more for basic coverage or services. One of the ways the law makes coverage more affordable is by providing subsidies or tax credits. Not everyone qualifies, but if you make under a certain amount, you can receive financial assistance. The ACA also keeps insurance companies from charging people with pre-existing conditions more. And it keeps insurance companies from refusing coverage to those people, in general. Obamacare also made it so that dependents can stay on a parent's plan until they're 26. This helps students and recent graduates save money before they have to purchase their own coverage through a job or the marketplace.

Expands Medicaid

Not all states have expanded Medicaid since the ACA came into effect. However, the law allows states to cover more people under Medicaid expansion. All adults who make less than 138% of the Federal Poverty Line (FPL) can qualify for Medicaid. Don't confuse this with Medicare, which is available to all adults over 65 as well as anyone with disabilities or End-Stage Renal Disease. The expansion of Medicaid is another way that the Affordable Care Act helps make health coverage more affordable. If you qualify for the program, you may not need to pay much for medical services.

Lower Overall Costs

The ACA also helps to support new methods of providing medical care. It especially supports methods of care that help lower the cost of medical care overall. This may include new methods of meeting with patients, such as telehealth. It could also cover new technologies to help provide care more efficiently. This law helps encourage innovation to provide better care to patients without them incurring high costs. While doctors don't have to use new methods, it's worth knowing the ACA supports it.

How Does the Affordable Care Act Work?

It's one thing to know what the ACA is and how it can help you and your family. However, you may still want to know, how does the Affordable Care Act work? To help the ACA meet its goals of making care more affordable, the law does a few things. Knowing what it does and how it works can help you choose between Affordable Care Act plans. Then, you'll get the coverage you need at a price you can afford. Consider the following things that the ACA did and does for Americans.

Set Up Health Insurance Marketplace

The ACA marketplace is where you can enroll in coverage if you don't have an employer. While employer plans need to meet ACA requirements, the health insurance marketplace is open to anyone. Some states use their own marketplaces to list plans, but many states use the federal marketplace. Either way, you can view all of the available plans in your area to compare them and select a plan for you. All marketplace plans must meet requirements to make coverage more affordable. Until 2017, you would need to purchase one of those plans to avoid paying a fee. However, the 2017 Tax Cuts and Jobs Act repealed the fee for individuals to have qualifying coverage. Even after that change, you can still obtain affordable coverage through the marketplace.

Established Essential Health Benefits

For a plan to be on the ACA marketplace, it needs to cover a few basic services. These Essential Health Benefits include ambulatory patient services, emergency services, and hospitalization. A qualifying plan also has to cover preventive services, pediatric services, and prescription drugs. Pregnancy, maternity, and newborn care as well as mental health and substance use disorder services are essential benefits. The last two essential health benefits are laboratory services and rehabilitative and habilitative services and devices. If a plan doesn't cover all of these, you won't find it on the marketplace. You may still enroll in such a plan, but it could cost you more since it doesn't cover as much. Having the requirement to cover certain services has helped many people save money.

Provides Financial Assistance

Probably the most significant way that the Affordable Care Act works is by providing financial assistance to some people. If you make less than 400% of the FPL for your family size, you may qualify for ACA subsidies. These tax credits help lower the cost of your premium, so you have more plan options without paying more. Depending on your income, you may be able to save a significant amount. You will need to go to the ACA marketplace website to create an account and enroll in a plan. The application will ask you about your estimated income to help calculate your potential savings. Then, you can use that tax credit to obtain the coverage you want. While not everyone qualifies for a subsidy, it's an excellent program to help Americans who couldn't afford health insurance otherwise.

How Will the Affordable Care Act Help You?

The Affordable Care Act was a massive piece of legislation that changed health care for many people. But you may not know, how does the Affordable Care Act work? It helps make health care more affordable and requires insurance companies to cover more patients. That way, you can get the coverage you need without spending more than you can afford. Do you need coverage through Medicare rather than the Affordable Care Act? Contact us to learn how we can help.