What to expect with the Affordable Care Act

GLENN ELLIS | 11/13/2017, 6:50 p.m.
Make no mistake, Obamacare, called the Affordable Care Act, is still the law of the land.

Strategies for Well-Being

Make no mistake, Obamacare, called the Affordable Care Act, is still the law of the land.

The Affordable Care Act – nicknamed Obamacare – is legislation passed in 2010 that changed how Americans enroll in and receive healthcare coverage.

The ACA actually refers to two separate pieces of legislation – the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 – that together expand Medicaid coverage to millions of low-income Americans and make numerous improvements to both Medicaid and the Children’s Health Insurance Program. The most important part of this act requires you to have health insurance for at least nine months out of every 12 or be subject to a tax.

The tax is 2.5 percent of your income. This mandate and the tax would have been eliminated if President Trump had replaced the ACA.

Congress has not been able to repeal it, replace it, rename it or whatever they tried to do before their August recess. The Health Insurance Exchanges, where you buy individual health insurance, are still functioning. They do show signs of strain due to the uncertainty surrounding the repeal efforts.

In a big legal win for the Trump White House, the government does not have to resume making payments on health care subsidies. A federal judge rejected the arguments of 18 state attorneys general who contended the monthly payments are required under former President Barack Obama’s health care law and that cutting them off will harm consumers.

It may not sound like a big deal, but closer examination reminds us of the old adage, “To be forewarned is to be forearmed.”

The term “health insurance exchange” – also known as a “health insurance marketplace” – has become part of the mainstream conversation about health insurance and healthcare reform. The ACA called for the creation of an exchange in each state.

The ACA offers subsidies to reduce monthly premiums and out-of-pocket costs in an effort to expand access to affordable health insurance for moderate and low-income people – particularly those without access to affordable coverage through their employer, Medicaid or Medicare. There are two types of subsidies available to marketplace enrollees. The first type of assistance, called the premium tax credit, works to reduce enrollees’ monthly payments for insurance coverage. The second type of financial assistance, the cost-sharing subsidy, is designed to minimize enrollees’ out-of-pocket costs when they go to the doctor or have a hospital stay. In order to receive either type of financial assistance, qualifying individuals and families must enroll in a plan offered through a health insurance Marketplace.

The ACA requires insurers to offer reduced out-of-pocket charges to customers of individual health plans if those people earn less than 250 percent of the federal poverty level, or less than $30,150 per year for a single person. A report by the Kaiser Family Foundation found that for people who earn between 150 percent and 200 percent of poverty “the average deductible is reduced to $809, a savings of $2,800” each year.