MONDAY, JANUARY 18, 2016
The Affordable Care Act, also known as the Patient Protection and Affordable Care Act (PPACA), and informally as Obamacare, was signed into law by President Barack Obama on 23rd March, 2010. The aim of the Act is a health care law aimed at improving the health care system of the United States by widening health coverage to more Americans, as well as protecting existing health insurance policy holders.
According to the Obama Administration, those who already have health insurance will benefit from the legislation in various ways. For example, insurance companies will not be able to cancel coverage if people get sick, out-of-pocket costs will be covered for proven preventive and screening services, such as mammograms (breast screening) and colonoscopies. The aim is to diagnose potentially chronic and serious diseases earlier on, when treatments are most effective.
People with jobs but no health insurance, as well as those as those with pre-existing conditions, such as asthma or cancer should find it easier to have reliable health care coverage as a result of the 2010 legislation. According to the US government, in 2014 more Americans will have access to health care coverage.
The Affordable Care Act aims to help small businesses get health insurance for their workers. According to the US government, the Act should "help increase the number of primary care physicians, nurses, physician assistants and other health care professionals."
Below are some highlighted details on the Affordable Care Act:
- Young adults can remain on their parents' health plans until they are 26 years old. This will also include young adults who don't live with their parents, are out of school, are not financially dependent on their parents, and are married (however, spouses and offspring will not be covered).
Even if the young adult has gone off a parent-owned plan, they will be able to enroll again.
Parents whose plans were already in place before March 23rd, 2010, can enter their young adult children into their plans if those are not eligible for their own employer-sponsored plan.
Group plans which started before the Affordable Care Act was signed into law do not have to offer health coverage to young adults who qualify for other group coverage.
- Employers with fewer than 25 workers may receive help in funding the cost of providing health insurance. Some small businesses are taking advantage of new tax credits which makes the purchasing of health insurance for employees more affordable. Small businesses are eligible if they provide health care for their employees, have no more than 25 full-time workers, and pay an average yearly salary of less than $50,000. Starting in 2014, the tax credit will be 50% for small businesses and 35% for non-profit ones.
- Kids with pre-existing conditions may not be denied health coverage by insurance companies. This applies to people up to the age of 19 years and includes any pre-existing health problem, disease or disability that developed before their parents applied for health coverage.
In 2014 this will apply to anybody, regardless of age.
Premiums will not be allowed to be raised for babies or children because of a pre-existing condition or disability.
- Adults who have been denied coverage because of an existing precondition and have been uninsured for 6+ months may now get insurance. PCIP (Pre-Existing Condition Insurance Plan) is aimed at adults who could not get coverage because of a pre-existing condition, such as diabetes or cancer. In 2014, access will be available to them.
- Individuals in the "doughnut hole" now receive a 50% discount on brand named prescription medications and a 7% discount on generic ones. Those enrolled in the Medicare Part D program often fell into a "coverage gap", commonly referred to as a doughnut hole. As soon as their plan had spent a pre-determined amount of money, further expenses had to be paid for fully out-of-pocket. The new legislation aims to gradually eliminate this problem, so that it no longer exists by the end of this decade.
- Medicare patients are now eligible for mammograms, colonoscopies, and some other preventive services
- All new health policies must offer screening and preventive services free of charge (mammograms, colonoscopies, etc.)
- Health insurance policies will be available for all people with pre-existing conditions (companies will not be allowed to refuse them). As from January, 2014, refusing coverage because of a pre-existing condition or disability will not be possible. Companies will not be allowed to raise premiums for those reasons either.
What is a pre-existing condition? This is a health problem, disability or disease that started before the individual applied for health coverage.
As from January 2014, health insurance companies will not be able to raise premiums because of an individual's gender or health status - this applies to individual and small group markets (small businesses that buy health insurance for their employees).
- Essential health benefits and coverage will be guaranteed for almost all Americans. As from January, 2014, policies will be required to offer a set of basic benefits which will be available on state-based marketplaces (exchanges). All exchanges will list the health plans on offer, so that people can make comparisons and shop around for the best plans. By 2014, all Medicaid state plans must offer at least:
- Chronic disease management (such as asthma or diabetes)
- Emergency room visits
- Laboratory services
- Maternity and newborn care
- Mental health
- Preventive care
- The majority of Americans who do not already have health insurance or health coverage will have to make sure they do in 2014. Financial assistance will be available for those who cannot afford it. Individuals who decide not to be covered will have to pay a fee - many call this a form of taxation (in fact, in a Supreme Court ruling yesterday, they allowed the introduction of the word "tax" when referring to this part of the Act). Individuals who pay over 8% of their monthly income to buy health insurance will be exempt.
- Dollar limits on the amount of care people are entitled to with insurance companies will eventually be done away with
- Exchanges will be created in 2014, state-based marketplaces where Americans without insurance will be able to buy health insurance. The aim is to increase competition between insurers in a state and allow people to compare and shop around for health plans that suit their circumstances and pockets.
- A larger percentage of American citizens will have access to Medicaid health coverage.
Affordable Care Act - What do people think?
Polls vary significantly on what the majority of Americans think - but the trend seems to be that slightly more do not support the law overall, while certain elements within it are very popular. While Republicans and Independents are mainly against the law, the majority of Democrats are in favor.
Many commentators have noticed that although most people are against the new law overall, they are mainly in favor when asked about specific provisions within it.
A Reuters-Ipsos poll carried out on 24th June 2012 showed that:
- 56% of the US adult population were generally against the law. 44% supported it
- 75% of Democrats, 14% of Republicans and 27% of Independents support the law overall
- 82% of Americans agreed that insurance companies should not be allowed to deny coverage for those with pre-existing conditions
- 61% agreed that young adults should be allowed to remain on the parents' insurance plans up to 26 years of age
- 72% agreed that companies with over 50 employees should provide their employees with health insurance
- 61% were against forcing everyone to have health insurance. This part of the law was favored by 41% of Democrats, 27% of Independents, and 19% of Republicans.
- There was overall support for the creation of insurance pools so that small companies and uninsured people may have access to insurance exchanges, as well as financial help for families which cannot currently afford health insurance.
Is US Healthcare spending good value for money?
Source: The Economist
From 1960 to 2009, US Healthcare spending rose from 5.1% of GDP (Gross Domestic Product) to 17.4%. The figure today is estimated to be even higher. Today, even though the country uses up a significantly higher percentage of its economy on healthcare, the USA has over 50 million people with no health coverage at all, and tens of millions of others with "inadequate coverage" - a situation exclusive to America when compared to other rich nations.
In the United Kingdom, for example, only 8% of GDP is spent on healthcare, and health coverage is offered to all its citizens - the UK has a universal coverage healthcare system. In Japan people live nearly ten years longer, on average, than Americans do, and spend considerably less on healthcare.
The USA has fallen behind other rich nations in life expectancy, infant mortality, teenage pregnancies, and a series of other healthcare statistics.
In 2011 the USA ranked 50th in global life expectancy. Although the country's people are living longer than before, the increase in lifespan in other countries has improved at a much faster rate.
Whatever arguments people of different affiliations use in America regarding its healthcare system, most have to agree that it has become extremely expensive and provides very poor value for money, compared to what other rich nations have managed to achieve.
For more information about New Jersey health insurance, give Cosmo Insurance Agency a call at 732-363-3888 today!
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