What Is The ACA?
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (also shortened to ACA or Affordable Care Act). Basically, the ACA is a set of rules and regulations that all “qualified” insurance plans are required to follow in order to count as “Minimum Essential Coverage”. Some of these provisions include preventive care covered at 100%, no lifetime limits on claims, and no exclusions for pre-existing medical conditions. The intent of the ACA was to provide more Americans with access to affordable, quality health care, which more equally priced for all.
What is “Affordable” about the Affordable Care Act?
While the cost of monthly premiums has risen sharply since the implementation of the Affordable Care Act, most people with gross income less than 400% of the Federal Poverty Level who are not offered employer-sponsored coverage are eligible for tax credits, which could reduce your monthly premium cost.
Your monthly premium cost is directly related to the actual cost of care and claims that are filed. Insurance companies are required to spend 80% of all incoming premium dollars to pay the claims of their insured members. That means the higher the claims are for a given year, the higher the premiums get in future years. Because of some of the requirements of the ACA, most notably the fact that all plans are “Guarantee Issue”, the filed claims are getting higher and higher, which causes your premium to go up. “Guarantee Issue” means that there are no exclusions, rate-ups, or limitations for having a pre-existing medical condition.