ACA 101

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ACA 101

Want to know the basics about the Affordable Care Act? Start here.  Also, check out the In the Loop fact sheet, Terms to Know About Health Insurance and the ACA, for more information.

How does the Patient Protection and Affordable Care Act (ACA) change health coverage in the U.S.?
The ACA makes dramatic changes to the way millions of Americans access health care. This comprehensive reform of health insurance attempts to make insurance more affordable, higher in quality and more accessible for people. It also expands Medicaid, imposes new responsibilities on individuals to purchase insurance and provides new incentives for employers to provide insurance for their employees.

How does the ACA reform insurance?
The ACA requires health insurers to accept all applicants for insurance, regardless of their health status. In addition, insurers are no longer able to charge higher premiums or exclude benefits because someone has a pre-existing condition. Most insurers are also required to provide coverage that meets federal standards for benefits and cost-sharing.

As of September 23, 2010, a number of insurance reforms went into effect, including requiring insurers to:

  • Cover certain preventive services without deductibles or cost-sharing
  • Allow parents to keep adult children up to age 26 on their insurance
  • Cover all children under the age of 19, regardless of health status
  • Create an internal and external appeals process to handle consumer complaints and denials
  • Eliminate lifetime limits on benefits and significantly raise the annual limits for benefits (eventually it will also eliminate annual limits)
  • Spend a minimum of 80 percent of premiums on medical services and quality improvement
  • Justify unreasonable premium increases
  • Eliminate the practice of rescissions (when a health plan retroactively cancels coverage after the enrollee gets sick)
  • Allow patients to choose their health care professional as a primary care provider

What is the Insurance Marketplace? Is it the same thing as an Exchange?
Health Insurance Marketplaces are a competitive marketplace for individuals and small businesses to purchase insurance. You may also hear them called “Exchanges.”

Since October 1, 2013, consumers in all states have been able to apply for new affordable health coverage options through the Health Insurance Marketplace for health insurance coverage beginning as soon as January 1, 2014. Some states have set up a State-based Marketplace, while other states are working with the federal government in a State Partnership Marketplace, and the remaining states have a Federally-facilitated Marketplace.

Marketplaces can provide individuals and small business owners with a "one stop shop" to compare and buy health insurance. The concept is to provide consumers with more control and greater transparency in making their choices about health insurance. People can also enroll in other public programs through Marketplaces. Marketplaces use the power of a large insurance pool, made up of individuals and small businesses, to generate competition among insurers to seek better quality plans at a lower cost.

When can consumers apply for coverage?
Consumers can apply for coverage either during open enrollment or during a special enrollment period:

Open Enrollment: A period of time during which individuals can enroll in a plan, renew coverage, or change to a different plan in the marketplace.

Special Enrollment Period: A time frame outside of an open enrollment period when individuals can sign up for or change health coverage in the marketplace if they experience certain qualifying life events. Examples of qualifying life events include moving to a new state, changes in family size (for example, if getting married or having a baby), and losing minimum essential coverage.

Who is eligible for financial assistance to help purchase insurance through the Marketplace?
Under the ACA, individuals who purchase insurance after January 1, 2014 through a Marketplace will be eligible for subsidies for health insurance premiums and cost-sharing if their income is less than 400 percent of the federal poverty level (FPL) -- $97,200 for a family of four in 2016. FPL amounts are updated annually to reflect inflation. Individuals who get insurance through their employer can get subsidized coverage in a Marketplace if their premiums are unaffordable (more than 9.5 percent of their household income) or the plan is inadequate (pays less than 60 percent of the cost of covered benefits).

What is a Qualified Health Plan?
A Qualified Health Plan (QHP) is a private health insurance product that is offered by an issuer that is licensed by the state and in good standing with the state. The plans are offered through the Marketplace and the issuer agrees to charge the same premium rate whether offered directly through the Marketplace or outside the Marketplace. At a minimum, a QHP covers all the Essential Health Benefits.

What are the Essential Health Benefits?
The ACA established a package of Essential Health Benefits (EHB) that must be covered in all plans offered in the Marketplace, as well as in Medicaid Alternative Benefits Packages and non-grandfathered private insurance plans. The law says that EHBs have to be equal in scope to the benefits covered by a typical employer plan and cover at least the following categories:

  1. Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care (care before and after your baby is born)
  5. Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  8. Laboratory services
  9. Preventive and wellness services and chronic disease management
  10. Pediatric services, including oral and vision care

How can consumers get help applying for coverage?
No matter what state they live in, consumers are able to get live in-person help as they go through the process of applying for and choosing new coverage options in the Marketplace. There are lots of different types of people who will be helping consumers get their coverage.

Navigators: Navigators have a vital role in helping consumers prepare electronic and paper applications to establish eligibility and enroll in coverage through the Marketplace. This includes steps to help consumers find out if they qualify for insurance affordability programs (including a premium tax credit, cost sharing reductions, Medicaid and the Children’s Health Insurance Program), and if they’re eligible, to get enrolled. Navigators also provide outreach and education, and refer consumers to ombudsmen and other consumer assistance programs when necessary. Navigators play a role in all types of marketplaces. They are funded through state and federal grant programs, and must complete comprehensive training.

In-person assisters: In-person assisters perform generally the same functions as Navigators but exist in either a State-based Marketplace or a State Partnership Marketplace. Though they perform the same functions as Navigators, in-person assisters are funded through separate grants or contracts administered by a state. They must also complete comprehensive training.

Certified application counselors: The Federally-facilitated Marketplace designates organizations to certify application counselors who perform many of the same functions as Navigators and non-Navigator assistance personnel—including educating consumers and helping them complete an application for coverage. An online application is available for organizations who want to become Marketplace-designated organizations that can certify application counselors. These groups might include community health centers or other health care providers, hospitals, or social service agencies.

A State-based Marketplace may choose to certify application counselors directly rather than designate organizations to do so. Certified application counselors and Marketplace-designated organizations won’t receive new federal grant money through the Marketplace. The counselors and organizations could, however, receive federal funding through other grant programs or Medicaid to help support their consumer assistance and enrollment activities. Examples of possible certified application counselors include staff at community health centers, hospitals, other health care providers, or social service agencies. In states that already have their own certification programs, staff at consumer non-profit organizations may also be certified as application counselors by Marketplace-designated organizations. All certified application counselors are required to complete comprehensive training.

Agents and Brokers: To the extent permitted by a state and if all Marketplace requirements are met, licensed health insurance agents and brokers may enroll individuals, small employers, and employees in coverage through the Marketplace. Agents and brokers are compensated by the issuer or by the consumer to the extent permitted under state law. Federal and state training and certification requirements apply to agents and brokers who enroll or assist consumers in the Marketplace.

What happens with Medicaid in the ACA?
Thanks to the ACA, states now have the option to expand their Medicaid programs to cover new populations at an enhanced federal match. As of January 2014, individuals under age 65 with incomes up to 133% of the Federal poverty level (FPL) are eligible for Medicaid in those states that implement the Medicaid expansion. In addition, all children with incomes up to 133% of the FPL will be eligible for Medicaid. Those states that previously covered these children through the CHIP program continue to receive the enhanced CHIP matching rate.

In states that don’t implement Medicaid expansion, people between the state’s Medicaid ceiling (it varies by state) and 100% of the FPL are not eligible for Medicaid or the new tax credit. This is called the "coverage gap". However, these individuals are not subject to a fee (penalty) if they do not obtain coverage. People with income above 100% of the FPL are eligible for the tax credit.

Where can I find information about which states have expanded their Medicaid programs?
As of March 14th, 2016, 32 states have adopted the Medicaid Expansion; 18 are not moving forward at this time.

An up-to-date list of state decisions can be found here.


General Resources on Enrollment Issues

Georgetown University's Center on Health Insurance Reforms' Navigator Resource Guide addresses nearly 300 questions on a wide range of situations that consumers may face as they navigate our changing health care system. The Guide has four sections: 

  • Section 1: Individuals with no coverage
  • Section 2: Individuals who currently have coverage or offers of coverage from their employer
  • Section 3: Coverage for small business employers
  • Section 4: Post-enrollment issues

HHS’ Health Insurance Marketplace website for assisters. There are numerous resources that can help you with basics and with more specific issues that arise as you assist consumers enroll in the new marketplaces.

Beyond the Basics.” This resource from the Center on Budget and Policy Priorities dives deeper into details on premium tax credits, determining household size, determining household income, and other ACA topics.  

Consumer Reports helps consumers understand the ACA and how the law might affect them.

Families USA’s Resource Center for Navigators and In-Person Assisters has great resources for assisters, including numerous fact sheets on common issues assisters address.

Kaiser Family Foundation’s easy-to-use set of Frequently Asked Questions address a wide variety of issues that enrollment specialists might encounter. KFF has also developed a marketplace subsidy calculator and a Spanish-language subsidy calculator to enable you to estimate the amount of subsidies someone will be eligible for in the marketplace. KFF also has a Spanish-language consumer resource center about the Affordable Care Act and its impact on individuals and families.