The Affordable Care Act (ACA)

The Affordable Care Act, also known as Obamacare, provides millions of working and middle class Americans with the security of knowing they won’t go broke if they get sick or injured. And it puts an end to insurance company abuses that used to leave Americans with fewer choices, higher premiums, and less coverage.

The ACA builds on what works in our health care system and fixes what’s broken. It helps people buy health insurance, makes sure that all plans cover essential benefits, and stops insurers from denying or cancelling coverage because of preexisting conditions. It also ends discrimination based on age, gender, and location. And it helps children stay on their parents’ policies until they’re 26.

ACA Regulations

The law requires all non-grandfathered health plans in the individual and small group markets to offer certain core benefits, including ambulatory patient services; emergency services; hospitalization; maternity and newborn care; prescription drugs; mental health and substance use treatment services; chronic disease management; and preventive care, without deductibles or copayments. The law also creates state-based American Health Benefit Exchanges through which individuals can purchase coverage and offers premium tax credits and cost-sharing reductions to make health insurance more affordable for those who need it. It also expands the eligibility for Medicaid in states that choose to do so.

And to help keep costs down, the ACA requires that insurance companies spend 80 percent of your premium dollars on actual medical care and not on administrative activities like salaries, bonuses, and marketing. If a company doesn’t meet this requirement, they must pass the excess back to you in the form of a rebate on your monthly premium. And the ACA prohibits most lifetime and annual dollar coverage limits, preventive care exclusions, excessive waiting periods, and a variety of other insurance company practices that used to be standard in the industry.

Lastly, the law requires all health plans to disclose their rates and costs in an easy-to-read format so that consumers can shop for the best value. This transparency is helping to keep premiums down for everyone. And it gives states the ability to reject unreasonable premium increases, as Oregon did last year when they forced an insurer to lower a proposed rate increase that would have hit 60,000 of its beneficiaries with a 10% hike.

The ACA also requires that all plans, regardless of where they are sold, cover the same 10 essential benefits, so you can shop and compare apples to apples. This includes preventive health services such as immunizations, screenings for cancer and other diseases, and laboratory tests. It also includes telemedicine and some rehabilitative services and devices. And it protects Medicare benefits that you already have, so your existing coverage won’t be reduced or eliminated. And the ACA requires that all non-grandfathered health plans cover sexually transmitted diseases and pregnancy in women who have an STI or HPV infection. And it extends access to long-term care and other health services for seniors.