The Affordable Care Act, Explained for Families
We spoke with experts to demystify the Affordable Care Act (ACA) which was created to make health insurance available to more people. This is what your family needs to know about the health care law in 2020.
Over a decade ago, the Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act, and commonly known as Obamacare, passed and was signed into law. One of the main goals: to make affordable health insurance available to more people. By 2018, there were 18.2 million fewer uninsured people in the U.S. than when the ACA became law.
What's more, women and families have benefited as a result of the ACA's requirement that insurance plans provide coverage for pre-existing conditions, including pregnancy, without charging more and allow children to stay on plans until the age of 26 and under special circumstances beyond 26 years old, says Rudy Rodriguez-Duret, CEO of Las Madrinas Medical Centers, an eight-office medical provider in Florida that treats ACA, Medicaid, and Medicare Advantage patients.
Want to learn more? Here's everything families need to know about the health care law.
Patient Protection and the Affordable Care Act
Aimed to protect consumers from insurance company strategies that could boost costs or restrict care, the ACA addressed the following issues:
Gender rating: "Before the ACA, if someone did not have insurance through an employer and tried to buy it on her own, insurers in many states could charge women more, especially during years when she might have a child—whether she planned to have one or not," explains Allison Hoffman, a professor of law at the University of Pennsylvania Carey Law School. "In most states, they could also exclude coverage of preexisting conditions or charge you more for insurance if you had health issues in the past."
Now, when someone buys a plan on the ACA Marketplace, premiums can no longer vary based on gender or health status. And for transgender parents, health insurance companies cannot limit sex-specific recommended preventive services based on your sex assigned at birth, gender identity, or recorded gender, says Rodriguez-Duret.
Community rating: A related requirement is called "community rating." "Community rating means that health insurers cannot charge different premiums within a geographic area based on gender, health status, or other factors," says Jessie Hill, JD, Associate Dean for Research and Faculty Development and Professor of Law at Case Western Reserve University in Cleveland, Ohio. "They can only charge different premiums based on age, number of covered family members, geographic location, and tobacco use."
Lacking coverage: All plans offered in the ACA Marketplace cover these 10 essential health benefits:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment.(this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (but adult dental and vision coverage. aren’t essential health benefits)
Being denied coverage based on preexisting conditions: Prior to the ACA, it was legal for insurance companies to deny coverage of certain treatment related to a preexisting condition, which could be anything from pregnancy to cancer to contending with a chronic health issue like diabetes.
Now, the ACA protects people with preexisting conditions through a requirement called "guaranteed issue," explains Hill. This means that health insurers generally must offer all of their available plans to all eligible individuals in the state and must accept all eligible individuals who apply for coverage. "They cannot deny coverage to anyone based on a pre-existing condition," says Hill.
Preventative Services for Parents
Kathleen Sebelius, former U.S. Secretary of Health and Human Services, explains that after the ACA passed, preventive services began to be offered without co-pays. "This was a way to encourage things like folic acid supplements, immunizations, and mammograms, because we know that prevention or early detection is cheaper and healthier than treating a problem," she notes.
The ACA's requirement that plans cover preventative care has made it so that when you get an annual checkup or a vaccine for your child, you pay nothing in most cases, explains Hoffman.
A provision in the ACA also ensures that insurers must cover the following benefits for people, free of co-pay:
- All FDA-approved contraceptives
- Pre- and postnatal maternity benefits such as gestational diabetes screenings and breastfeeding supplies and support
- Broader screening and counseling for sexually transmitted infections (HIV, human papillomavirus, and others)
- Domestic violence screening
Financial Assistance for Families
Under the ACA, moderate and low-income families, especially those who lack access to affordable coverage through their employer, Medicaid, or Medicare—can take advantage of two types of federal subsidies. These aim to lower costs for households with incomes between 100 and 400 percent of the federal poverty level, explains Rodriguez-Duret. The two types are:
Premium tax credit (PTC, or APTC when paid in advance): This works to reduce enrollees’ monthly premium payments for insurance coverage.
Cost-sharing reduction (CSR): This reduces enrollees’ out-of-pocket costs when they go to the doctor or have a hospital stay.
"Many families don’t realize they may be eligible for ACA subsidies when enrolling," says Nathan Teater, licensed agent for eHealthInsurance.com. "Eligibility is based on income, and subsidies can make a big difference in terms of affordability. If you’re a family of three, for example, you may qualify for these federal subsidies so long as your household income is no more than about $86,000 per year. A family of four can earn up to about $104,000 per year and still qualify for subsidies."
Another meaningful part of the ACA for families is the Medicaid expansion, says Hoffman. Under the law, the health insurance program for low-income families has expanded to cover 12 million additional Americans. "It covers one-third of children and pays for nearly half of all births in the United States and prenatal care prior to those births," says Hoffman.
Dependent Child Coverage
The ACA offers specific protections for parents of young adults. The ACA requires health plans to cover dependent children up to age 26. "This is a huge advantage for younger adults, because they are often still getting their footing during those early years of financial independence, and they may not have steady employment that would provide them with their own health benefits," points out Hill.
And studies show that the requirement has proved useful: Most young adults have stayed on their parents' plans for a year or two more than before the ACA, allowing greater security for a population that might have gone uninsured otherwise, says Hoffman.
During the open enrollment period, anyone can shop their state's ACA Marketplace to find a plan that works for them, which would take effect in January. In most states, open enrollment runs from November 1 through December 15. "In some states that run their own marketplaces, it extends out longer," notes Hoffman.
If you miss open enrollment, you might still be able to buy a plan under what’s called a Special Enrollment Period if you or someone in your household gets married, has a baby, adopts, or places a child for foster care, gets divorced or legally separated and loses health insurance, dies, moves, or loses health insurance through an employer.
Benefits Will Still Differ From Plan to Plan
Plans that you can buy through an ACA marketplace—all of which, it bears noting, are offered by private insurers—will guarantee certain minimum benefits, but there's still a lot of room for variation, points out Hill. That's why she encourages parents to read the fine print and learn as much as they can about the coverage being offered. That way, you'll be prepared to choose a health insurance plan that's best for you and your family.