The Affordable Care Act (ACA) is a law that provides coverage for most Americans. It expands access to health insurance by requiring most individuals and businesses to have or purchase coverage, creating state or multistate-based insurance exchanges where people can shop for a plan that fits their needs and financial situation, establishing premium tax credits that help eligible people afford the cost of their coverage, and providing grants to states to improve their existing exchanges. It also requires most large employers to offer coverage and pays penalties to companies that do not provide it.
The ACA also prohibits health insurers from denying or charging higher premiums based on preexisting conditions and limits annual and lifetime dollar amounts that people will be required to pay in the event they receive expensive services. It also requires most private insurance plans to cover a set of essential benefits, which include preventive services and treatment for chronic diseases such as diabetes or congestive heart failure. In addition to these “carrots,” the ACA includes a number of “sticks”—including the individual mandate and limited enrollment periods—to encourage healthy people to enroll as well as those with serious health problems to maintain their coverage.
In the years before the ACA, only 14-16% of all Americans had health insurance coverage, and many of those who did were covered through employer-provided plans or public programs like Medicaid or Medicare. The ACA dramatically expanded the pool of insured people through its expansions of Medicaid and creation of a new health insurance marketplace (the Health Insurance Marketplace), which offers affordable plans for those who do not have access to an employer-based plan. It also allows young adults to remain on their parents’ insurance until they reach age 26 and requires employers of 50 or more employees to offer health coverage to their workers or pay a penalty.
Despite the many controversies and challenges, many of the ACA’s major provisions have been implemented. It has increased insurance coverage, including coverage for people with preexisting conditions; reduced costs for many through lowered premiums and cost-sharing; made it easier for individuals to enroll in the health insurance marketplace; and improved the quality and efficiency of the nation’s healthcare system.
It is important for consumers to understand how the ACA works and its impact on them. The best way to do this is to visit the Health Insurance Marketplace and explore its various options. The health insurance marketplace website is easy to use, but some people have experienced issues with signing up during the annual open enrollment period between November 1 and December 15. Those who need to enroll outside of the open enrollment period should contact their local marketplace to find out more about available options. In addition, consumers should keep a copy of Form 1095 in their records to verify the accuracy of their health insurance information. This form will be sent to them by their health insurance provider or the Health Insurance Marketplace, and it will be needed if they ever need to file an income tax return.