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Understanding the Affordable Care Act
February 20, 2013

Understanding the Affordable Care Act

Health Article by Larry D. Jones, MPH, Health Director

February 19, 2013

If you’re like many Americans, there’s a good chance you’re a little unclear on what the Affordable Care Act (ACA) of 2010 actually means for you. The law is very complex, and there’s no way to sum it up in one short article. But this week we’ll take a stab at outlining some of the basic provisions of the law and what they mean for average folks. The information in this article is based on a guide to health reform from Consumer Reports, which is available at ConsumerReportsHealth.org/freeguides.

Some parts of the ACA won’t be effective until 2014 or later, but some important protections for consumers are already in place. These parts of the law protect people against insurance practices that cancel or limit health insurance coverage, and end up costing people a lot of money. For example, insurance companies can no longer “rescind”, or cancel, your insurance policy if you get sick. Insurers also can’t cancel your insurance if it turns out that you made a mistake on your application. Insurance companies used to set limits on what they would pay for someone’s health care over an entire lifetime, which they are no longer allowed to do. The law also addresses the limits that insurers place on what they will pay for a person in one year. As of September 2012, insurance companies are not allowed to set yearly limits at less than $2 million, and in January 2014, these yearly limits will be banned altogether.

The ACA’s focus on disease prevention and primary care means that many routine services will now be free to consumers. New private health care plans must cover preventive measures like immunizations and cancer screenings, and are no longer allowed to charge for them (i.e., no co-pays). Existing plans may still charge for these services, but will not be able to after January 2014. Some benefits apply specifically to women—free well-woman visits, contraception, breastfeeding support, and screenings for domestic violence and gestational diabetes.

Certain Americans who did not previously have health insurance are now able to get coverage through the ACA. Young adults can stay on their parents’ health insurance plans until they turn 26 years old. Adults with pre-existing conditions may be able to get coverage through temporary plans in each state (more information at PCIP.gov). Most insurers can no longer deny coverage to children with pre-existing conditions. In 2014, insurers will have to cover both adults and children with pre-existing conditions, and will not be able to charge these people more for health insurance.

One of the more controversial elements of the ACA is the requirement that most Americans buy health insurance. In 2014, online marketplaces, or “exchanges”, will help consumers compare plans and buy the one that best fits their needs. These exchanges will also help people figure out whether they qualify for discounts. Some Americans will be exempt from the requirement to buy insurance, including people who get insurance through an employer or a government program (Medicare, Medicaid, programs for active military and veterans, etc.), and those who would have to spend more than 8% of their household income on the cheapest available plan.

For more information on any of these parts of the ACA, and much more, visit healthcare.gov or the Kaiser Family Foundation (healthreform.kff.org), or refer to the Consumer Reports guide at ConsumerReportsHealth.org/freeguides.

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