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Patient Protection and Affordable Care Act

The Affordable Care Act (ACA) was signed into law on March 23, 2010. The act is complex and multifaceted; several phases of it were enacted immediately, while others will become law during the next several years. The last provisions of the ACA are scheduled to take effect on Jan. 1, 2015. On June 28, 2012, in a 5-4 decision, the U.S. Supreme Court upheld the constitutionality of the ACA.

Many of the major changes to health care begin in 2014, such as:

  • Underwriting reforms to prevent insurance companies from denying health coverage to people with pre-existing conditions
  • Reforms to prevent insurance companies from charging individuals more for their health insurance because of their health status or gender
  • Prohibiting health plans from cancelling coverage once the covered individual gets sick – a practice known as "rescission" – unless fraud was committed when coverage was applied for
  • The establishment of affordable health insurance Exchanges. View the approaches taken by states to implement health insurance exchanges.
  • An individual mandate requiring most people who can afford health care to purchase it (Exceptions to the mandate exist for those who cannot find affordable coverage).
  • Premium credits to help pay insurance premiums for individual and families with incomes up to 400 percent of the federal poverty level who purchase coverage through the Exchanges. If the credits were in effect in 2012, for example, individuals making $14,856 to $44,680 per year, and families of four with incomes between $30,656 and $92,200, would have been eligible to receive a credit that would reduce the premiums charged for health insurance purchased through an Exchange.
  • A second phase of tax credits for small businesses, which can provide up to a 50 percent tax credit to help pay for employee health benefits

Some notable aspects of the act that have begun:

  • Young adults to may stay on their parents’ health plan until they turn 26 years old.
  • Health plans cannot deny coverage for a child under the age of 19 because of a pre-existing condition.
  • Plans are prohibited from setting dollar limits on a policy’s lifetime coverage amount.
  • A $2 million floor plan for annual limits on coverage for employer plans and new individual plans is established as of Sept. 23, 2012.
  • Insurers cannot charge co-pays for some preventive services, such as breast cancer screening and cholesterol tests.
  • Tax credits of up to 35 percent for small businesses with fewer than 25 employees that provide health insurance (up to 25% for nonprofits) are available to offset employer insurance costs.
  • Health insurers must refund a portion of premiums paid by consumers and employers if at least 80 percent (85 percent in the case of employer-provided coverage) of premiums are not spent on health care services in any given year.
  • Medicare’s coverage of preventive services, such as screenings for colon, prostate, and breast cancer, is now expanded and free to beneficiaries. Medicare will also pay for an annual wellness visit to the doctor.
  • The Medicare Part D prescription drug plan "doughnut hole" that currently requires seniors who have paid a certain initial amount in prescription costs to pay for all of their drug costs until they spend a total of $4,700 in any given year has begun to be phased out. The doughnut hole will be totally eliminated by 2020.
  • New state high-risk pools are available to people who have been uninsured for six months.