Also known as “health care reform,” the Affordable Care Act (ACA) was signed into law on March 23, 2010. The ACA represents the most significant overhaul of the United States health care system since the passage of Medicaid and Medicare in 1965. The law attempts to address problems in the current health care system, including expanding coverage to millions of Americans who are uninsured. To accomplish this, significant changes are made to the way health care is purchased and delivered.
There are several different elements under the ACA, although not all of them will be implemented at the same time. The law called for certain changes to go into effect six months after the passage of the law, while others will not be effective until January 1, 2014 or later.
The most significant reforms in the ACA regarding health insurance are the creation of health insurance exchanges and the health insurance market reforms. A health insurance exchange is an online marketplace where individuals, families and small employers will be able to easily compare health insurance plans on price, benefits, services and quality. The health insurance market reforms provide consumers with important protections.
This coverage is effective for health plans beginning on or after September 23, 2010. If the young adult is offered insurance through his or her employer, they are not eligible to stay on their parents’ plan.
This coverage began on September 23, 2010 and applies to all group and individual plans.
This coverage began on September 23, 2010. Annual limits will be gradually increased over the next few years and will be completely eliminated on January 1, 2014.
The law provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small nonprofit organizations may receive up to a 25% credit. Employers must cover at least 50% of health insurance costs for some or all employees. The employer must have fewer than 25 fulltime employees (or equivalents) and pay annual wages of less than $50,000.
Each eligible senior who reached the Medicare prescription drug “donut hole” received a onetime, tax free $250 rebate check.
All non-grandfathered plans must cover certain preventative services such as mammograms, colonoscopies, immunizations and vaccines, and smoking cessation. Medicare-eligible individuals are also provided with yearly “wellness” exams. This coverage is effective for health plans beginning on or after September 23, 2010.
Companies must give a 30-day notice before rescinding coverage, during which an individual may file an appeal.
Consumers who have had a claim denied can continue to appeal their insurance company’s decision. A process for independent, outside reviews of claims denials and rescissions is available for individuals if their internal appeal is denied.
These incentives include funding for scholarships and student loan repayments to help strengthen the primary care workforce. Any doctor, nurse or physician’s assistant who is willing to work in underserved areas of the state may receive these incentives.
Beginning September 1, 2011, insurers must justify any rate increase of 10% or more before the increase takes effect. These rules apply to non-grandfathered plans in the individual and small group market.
The law requires each state to have a health insurance exchange, either established by the state or by the federal government. Mississippi will have an exchange established and operated by the federal government, which is called the “Health Insurance Marketplace.” Only health insurance plans that meet certain benefits and cost standards will be offered in the Marketplace to individuals, families and small employers.
Premium tax credits and reduced cost-sharing are available to those individuals purchasing coverage through the health insurance marketplace. This assistance can be utilized by individuals and families with incomes between 100% and 400% of the Federal poverty level (FPL).
The categories of essential health benefits include ambulatory services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, laboratory services, rehabilitative and habilitative services, preventive services and pediatric services.
Insurance companies are prohibited from refusing to sell coverage or renew policies because of an individual’s pre-existing condition or any other health-related factor. These rules apply in the individual and small group market.
The law requires U.S. citizens and legal residents to be enrolled in a health insurance plan that meets basic minimum standards. A phased-in tax penalty will be assessed to those who do not maintain coverage. Only certain religious groups or people with very low incomes will be exempt from the tax penalty.
All plans, including grandfathered plans, will be prohibited from imposing annual dollar limits on the amount of coverage an individual may receive.
Small businesses who qualify will be eligible for a tax credit of up to 50% of the employer’s contribution to provide health insurance for employees. Small nonprofit organizations will be eligible for up to 35%. Employers must cover at least 50% of health insurance costs for some or all employees. The employer must have fewer than 25 full-time employees (or equivalents) and pay annual wages of less than $50,000.
Insurance companies in the individual and small group markets will be prohibited from using factors such as pre-existing conditions, health status, claims history, duration of coverage, gender or occupation to charge higher premiums to some individuals. Premiums may only vary based on age, tobacco use, family size and geographic areas.
The ACA requires that there must be a health insurance exchange ready to function in every state by January 1, 2014. All states were given the option of running their own exchange or allowing the Federal government to run the exchange. Mississippi will have an exchange run by the Federal government, known as the “Health Insurance Marketplace.”
The Health Insurance Marketplace includes both the Individual Marketplace, where individuals and families can enroll in coverage and access premium tax credits, as well as the Small Business Health Options Program, or “SHOP,” which is for small employers and their employees.
All health insurance plans sold through the Marketplace must offer the essential health benefits. Four tiers of coverage will be available, and will help consumers compare different plans. All plans within a particular tier will offer the same level of coverage, but premiums may still vary from company to company. The four tiers are:
