On March 23, 2010, President Obama signed the Affordable Care Act (ACA) into law. The ACA represents the most significant expansion of health coverage and regulatory overhaul since the creation of Medicare and Medicaid in 1965. At nearly 2,000 pages, the ACA touches nearly every corner of the U.S. health care system to reduce the rate of uninsured individuals and improve access to affordable, quality health care.
Oh, one more thing before highlight the most impactful provisions of the bill. The ACA is the same thing as Obamacare. They are not two separate legislative efforts that overhauled health care. We promise. Tell your parents, friends, and patients. [Watch this Jimmy Kimmel clip if you need to be reminded that people still don’t know the ACA and Obamacare are synonymous]. Ok, let’s get into it.
You’ve heard of healthcare.gov, right? I’m sure you know it crashed or was incredibly sluggish during its first week of operation. Or that there was some controversy over the company contracted to build the site. But did you know that healthcare.gov is the home of the ACA’s Exchanges, also known as the health insurance Marketplace?
The Marketplaces were set up by the ACA to create organized, competitive markets for purchasing health insurance. Prior to the creation of the Marketplace, individuals needing health insurance would have to contact insurance companies directly and would receive limited transparency on cost and benefits.
In contrast, the Marketplace allows individuals, families, and small businesses to: (1) compare health insurance plans for benefits and cost; (2) determine eligibility for tax credits for private coverage or Medicaid/CHIP; and (3) enroll in a health insurance plan. Some states have chosen to operate their own Marketplace (CA, CO, CT, DC, ID, MD, MA, MN, MS, NM, NY, RI, UT, VT, WA). In all remaining states and territories, the federal government facilitates the Marketplace.With limited exceptions, enrollment in a Marketplace plan is only possible during an Open Enrollment period. Outside of the Open Enrollment period, individuals and families are only able to choose a health plan on the Marketplace if they have a special circumstance, such as moving or losing coverage due to a change in employment. After the first Open Enrollment period in 2014, 8.0 million people signed up for coverage using the Marketplace.
Research has shown that higher rates of use of preventive services can have a significant impact on individual health and the cost of health care. However, the cost of these services was a barrier for many insured and uninsured individuals. In response to this concern, one key provision of the ACA requires private insurance plans to cover preventive health care services without cost-sharing (copayments, coinsurance, or deductible) for patients. This requirement, established under Section 2713 of the ACA, applies to all private plans in the individual, small group, and large group markets, as well as self-insured plans that contract out to third party payers. [Plans with a “grandfathered” status–a plan in existence before March 23, 2010 that cannot make significant changes to coverage–were exempt].
The individual mandate has been a magnet for contentious debate since the ACA became law in 2010. The ACA was not the first time a mandate to purchase insurance has been floated in the U.S.–the Clinton Administration supported the concept in the Health Security Act of 1993, which did not become law. Prior to the ACA, Massachusetts became the first stateto require all individuals over 18 to have health insurance and helped enacted measures to help facilitate the expansion in coverage. And, as art imitates (or predicts) life, the West Wing featured the health care debate even before Senator Obama became candidate-Obama. [You can watch it on Netflix. Season 7, Episode 7, “The Debate.” The health care portion starts at 16:43].
Before we get into the details of what the mandate requires (and an update on its current status), let’s take a quick look at the arguments on either side of the issue.Supporters of the mandate have two primary justifications: (1) it will help the U.S.’s private-public hybrid insurance system work most effectively by spreading the cost out among as large a risk pool as possible; and (2) a moral imperative that healthcare is a right, and not a privilege afforded to those with means. On the other side of the issue, opponents of the mandate argue that it is a government infringement on personal freedom.
Medicaid is jointly administered by the Centers for Medicare and Medicaid Services (CMS) and individual state Medicaid agencies. CMS is an agency within the Department Health and Human Services (HHS), which in turn is overseen by the President. CMS sets program parameters, provides policy guidance, and approves waivers excusing states from certain requirement. CMS issues guidance on eligibility, enrollment, medical assistance, coverage, provider participation, provider payments, cost-sharing, and a host of other policy issues related to the program.
In turn, each state creates a uniform, state-wide medical assistance program that is embodied in a federally-approved state plan. The state agencies are free to make choices within the parameters set by the federal government, often through waivers or creative programming.
Before the ACA, individuals without employer insurance bought an insurance plan directly from an insurer (i.e. United Healthcare, Aetna…). Plans were typically poorly regulated and had very few consumers to share the risk, so costs were high. The ACA sought to establish a single virtual marketplace, where consumers could shop for and purchase an insurance plan, allowing individuals across a county to be pooled together, minimizing risk and lowering cost. The health insurance exchanges established by the ACA offer transparent cost comparisons between plans and enforce the inclusion of essential health benefits to ensure quality across all plans.
Those in the individual market now have the opportunity to shop for a plan that best fits their needs with options ranging from the low premium/high deductible bronze plans to the high premium/low deductible platinum plans. Additionally, all marketplace plans are subject to a number of consumer protections, including: