On March 23, 2010, President Obama signed “the Patient Protection and Affordable Care Act” into law. It is referred to as the “Affordable Care Act” or ACA. This bill was to promoted by President Barack Obama to let more Americans to afford health insurance and to regulate the insurance industry in order to improve medical services quality and reduce health care costs, therefore this bill is also known as Obamacare. “Affordable Care Act” requires states to establish their own health exchange or choose federal government established marketplace to allow applicants to one-stop apply for government free programs like Medicaid, child health care CHIP, or government subsidized Obama plans. To present the federal health marketplace (exchange) has not yet meet the requirements of one-stop shopping.
Since 1966 the government has been gradually improved seniors Medicare system. Over 65 years old individuals, self or spouse has worked for at least ten years, paid enough Social Security taxes to the government, or under 65 years of age have permanent disabilities, are eligible for Medicare. Thus, Obamacare is specifically for under 65 years old, non-disabled individuals.
ACA Government Subsidies
Individuals and families with income within 100% to 400% Federal Poverty Level (FPL), and live in the USA legally, are qualified for government payment assistance for Obamacare program. Those with income below 100% of FPL, are not eligible for subsided Obamacare plan. Therefore, for residents in states not expanding Medicaid, individuals or families with income below 100% FPL may disqualify for any government funded or assisted programs.
A. Premium Credit to reduce monthly premium payment
The Marketplace will determine qualified medical program and the amount of Advanced Payment Assistance Credit (APTC) based on immigration status, family size, and annual household income. When an applicant is selecting a health plan, Marketplace will show the member’s premium after APTC. The APTC is directly paid by government to the insurance company. Applicants with income between 100% and 400% FPL qualify for this type of assistance. The APTC is tied to the second lowest cost silver plan in the area and is set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels:
Up to 133% FPL: 2% of income
133-150% FPL: 3 – 4% of income
150-200% FPL: 4 – 6.3% of income
200-250% FPL: 6.3 – 8.05% of income
250-300% FPL: 8.05 – 9.5% of income
300-400% FPL: 9.5% of income
B. Cost-sharing subsidies
To reduce eligible individuals or families’ annual deductible, copay, and coinsurance when receiving medical services. Applicants with income between 100% and 250% FPL are eligible for this additional assistance. However, such assistance is only available to qualified applicants who purchase a Silver plan. If qualified applicants choose to buy a Catastrophic, Bronze, Gold, or Platinum plan, they lose out these subsidies. Cost-sharing subsidies have the effect of increasing the actuarial value of the basic benefit plan to the following percentages of the full value of the plan for the specified income level:
100-150% FPL: 94%
150-200% FPL: 87%
200-250% FPL: 73%
250-400% FPL: 70%
Because the household income is estimated when applicants submit applications on Marketplace. The APTC amount will be reconciled on actual income when applicants file annual individual tax return. Applicants may have to pay back a portion of APTC or receive more of it as tax refund. Cost-sharing subsidies are not required to pay back if actual income is higher than estimated.
Table 1. 2017 Household Income Related to the Federal Poverty Level
Key Features of the Affordable Care Act
- Ends Pre-Existing Condition Exclusions for Children: Health plans can no longer limit or deny benefits to children under 19 due to a pre-existing condition.
- Keeps Young Adults Covered: If you are under 26, you may be eligible to be covered under your parent’s health plan.
- Ends Arbitrary Withdrawals of Insurance Coverage: Insurers can no longer cancel your coverage just because you made an honest mistake.
- Guarantees Your Right to Appeal: You now have the right to ask that your plan reconsider its denial of payment.
- Ends Lifetime Limits on Coverage: Lifetime limits on most benefits are banned for all new health insurance plans.
- Reviews Premium Increases: Insurance companies must now publicly justify any unreasonable rate hikes.
- Helps You Get the Most from Your Premium Dollars: Your premium dollars must be spent primarily on health care – not administrative costs.
- Covers Preventive Care at No Cost to You: You may be eligible for recommended preventive health services. No copayment.
- Protects Your Choice of Doctors: Choose the primary care doctor you want from your plan’s network.
- Removes Insurance Company Barriers to Emergency Services: You can seek emergency care at a hospital outside of your health plan’s network.
- Obama health care requires all health insurance plans (excluding the sale before 2010.3.10 insurance) must provide health insurance to individuals and families with a history, regardless of whether they have health problems such as diabetes or asthma, children under 26 years of age married or unmarried parents can join health plans provided by employers or buy their own.
The Ten Essential Health Benefits
These essential health benefits include at least the following items and services:
- Outpatient care—the kind you get without being admitted to a hospital
- Trips to the emergency room
- Treatment in the hospital for inpatient care
- Care before and after your baby is born
- Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
- Your prescription drugs
- Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
- Your lab tests
- Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
- Pediatric services: This includes dental care and vision care for kids. Specific health care benefits may vary by state. Even within the same state, there can be small differences between health insurance plans. When you fill out your application and compare plans, you’ll see the specific health care benefits each plan offers.
The Five Metal Levels
There are 5 categories or “metal levels” of coverage in the Marketplace. Plans in each category pay different amounts of the total costs of an average person’s care. This takes into account the plans’ monthly premiums, deductibles, copayments, coinsurance, and out-of-pocket maximums. The actual percentage you’ll pay in total or per service will depend on the services you use during the year.
• Bronze: Your health plan pays 60% on average. You pay about 40%.
• Silver: Your health plan pays 70% on average. You pay about 30%.
• Gold: Your health plan pays 80% on average. You pay about 20%.
• Platinum: Your health plan pays 90% on average. You pay about 10%.
• Catastrophic: Catastrophic coverage plans pay less than 60% of the total average cost of care on average. They’re available only to people who are under 30 years old or have a hardship exemption.
Tax Penalty for Uninsured
ACA requires U.S. citizens and legal residents to have qualifying health coverage. Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income. Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment. Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8% of an individual’s income, and those with incomes below the tax filing threshold.
- Your income is below Federal Poverty Level
- You lived in a state that didn’t expand its Medicaid program but you would have qualified if it had
- You were homeless
- You were evicted in the past 6 months or were facing eviction or foreclosure
- You received a shut-off notice from a utility company
- You recently experienced domestic violence
- You recently experienced the death of a close family member
- You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
- You filed for bankruptcy in the last 6 months
- You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
- You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
- The lowest priced health plan in your county was more than 8% of your household income
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider; You’re a member of a recognized health care sharing ministry; You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
- You are not lawfully present in the USA
- You are incarcerated
- US citizen living abroad for 330 days or more
Open Enrollment Period (OEP) and Special Enrollment Period (SEP)
You may enroll or change your health insurance plan during annual Open Enrollment Period. The OEP for 2018 plan year is Nov. 1 to Dec.15.
You have a right sign up for health coverage or change your current health plan outside of the open enrollment period if you have certain life events in your family such as marriage/divorce, birth/adoption/death, moving, losing job, Medicaid/Chip or other health plan termination, immigration status change, and so on. You have a special enrollment period 60 days following the life event.