14.3: Health Care Choices - The Affordable Health Care Act (ACA)
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Health care choices in the United States can be broadly divided into two main categories: public health care (government-funded) and private health care (privately funded). The two main publicly funded health care programs are Medicare, which provides health services to people over 65 years old as well as people who meet other standards for disability, and Medicaid, which provides services to people with very low incomes who meet other eligibility requirements. Other government-funded programs include service agencies focused on Native Americans (the Indian Health Service), Veterans (the Veterans Health Administration), and children (the Children’s Health Insurance Program).
Health care in the United States is a complex issue, and it will remain complex with the continued enactment of the Patient Protection and Affordable Care Act (PPACA). This Act, sometimes called “ObamaCare” for its most noted advocate, former President Barack Obama, represents large-scale federal reform of the United States’ health care system. It expands eligibility to programs like Medicaid and CHIP, helps guarantee insurance coverage for people with pre-existing conditions, and establishes regulations to make sure that the premium funds collected by insurers and care providers go directly to medical care. It also includes an individual mandate, which requires everyone to have insurance coverage or pay a penalty. A series of provisions, including significant subsidies, are intended to address the discrepancies in income that are currently contributing to high rates of uninsurance and underinsurance.
How much do you know the Affordable Health Care Act?
You need to be fully informed about what the PPACA provides. Here is a list of key changes to the United States health care system as a result of the PPACA:
- Insurers are prohibited from denying coverage to individuals due to pre-existing conditions.
- Premiums must be the same for everyone of a given age, regardless of preexisting conditions.
- Dependents are permitted to remain on their parents' insurance plan until their 26th birthday.
- Individuals are required to buy health insurance or pay a penalty (known as the individual mandate). This applies to everyone not covered by an employer sponsored health plan, Medicaid, Medicare or other public insurance programs (such as Tricare). Also exempt were those facing a financial hardship or who were members in a recognized religious sect exempted by the Internal Revenue Service.
- Essential health benefits must be provided. The National Academy of Medicine defines the law's "essential health benefits" as "ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care" and others rated Level A or B by the U.S. Preventive Services Task Force. In determining what would qualify as an essential benefit, the law required that standard benefits should offer at least that of a "typical employer plan".
- Additional preventive care and screenings for women. This includes Well-woman visits, gestational diabetes screening for pregnant women, domestic and interpersonal violence screening and counseling, FDA-approved contraception methods, and contraceptive education and counseling, breastfeeding support, supplies, and counseling, HPV DNA testing, for women 30 or older, sexually transmitted infections counseling, and HIV screening and counseling for sexually active women. This mandate applies to all employers and educational institutions except for religious organizations. These regulations were included on the recommendations of the Institute of Medicine.
- Annual and lifetime coverage caps on essential benefits were banned.
- Prohibits insurers from dropping policyholders when they get sick.
- All health policies sold in the United States must provide an annual maximum out of pocket (MOOP) payment cap for an individual's or family's medical expenses (excluding premiums). After the MOOP payment cap is reached, the insurer must pay all remaining costs.
- Preventive care, vaccinations and medical screenings cannot be subject to co-payments, co-insurance or deductibles. Specific examples of covered services include: mammograms and colonoscopies, wellness visits, gestational diabetes screening, HPV testing, STI counseling, HIV screening and counseling, contraceptive methods, breastfeeding support/supplies and domestic violence screening and counseling.
- The law established four tiers of coverage: bronze, silver, gold and platinum. All categories offer the essential health benefits. The categories vary in their division of premiums and out-of-pocket costs: bronze plans have the lowest monthly premiums and highest out-of-pocket costs, while platinum plans are the reverse. The percentages of health care costs that plans are expected to cover through premiums (as opposed to out-of-pocket costs) are, on average: 60% (bronze), 70% (silver), 80% (gold), and 90% (platinum).
- Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
- Employer mandate. Businesses that employ 50 or more people but do not offer health insurance to their full-time employees pay a tax penalty if the government has subsidized a full-time employee's healthcare through tax deductions or other means. This is commonly known as the employer mandate. This provision was included to encourage employers to continue providing insurance once the exchanges began operating. Approximately 44% of the population was covered directly or indirectly through an employer.
- Insurers must spend at least 80–85% of premium dollars on health costs; rebates must be issued to policyholders if this is violated.
Many Americans worry that governmental oversight of health care represents a federal overstepping of constitutional guarantees of individual freedom. Others welcome a program that they believe will make health care accessible and affordable to everyone.
Watch this tour of the HealthCare.gov website to find out more.
Covered California
In California, the health care marketplace is called Covered California. This is where Californians can shop and compare health insurance plans under the Patient Protection and Affordable Care Act. The Department of Health Care Services sponsors Covered California to help health insurance shoppers get the coverage and care that is right for them. Visit CoveredCA.com for more information.