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The Affordable Care Act

What is it, and how does it affect me?

The Basics

The Affordable Care Act (ACA) was signed into law by President Barack Obama on March 23, 2010. It is also know is the Patient Protection and Affordable Care Act (PPACA), and some groups have nicknamed it “Obamacare.” It is the biggest regulatory overhaul of the U.S. healthcare system since Medicare and Medicaid were passed in 1965. (Click here to see a timeline of ACA implementation.)

    The two main purposes of the ACA are to:

  1. Increase the number of Americans who have health insurance
  2. Reduce healthcare costs
    There are lots of perks that feed into these two main goals. We discuss these in detail in other sections, but here are several examples:

  • Under the ACA, you can no longer be denied health insurance because of a pre-existing condition.
  • Preventative services like prostate cancer screenings and mammograms.
  • Young adults can stay on their parent’s health plan until their 26th birthday.
  • New Mexico has accepted the federal funds to expand Medicaid – 170,000 more New Mexicans will be eligible
  • There will be a new, one-stop-shop where you can compare all of your insurance coverage options: the Health Insurance Marketplace (also called “the Exchange”)

A physician’s perspective on the benefits of the ACA

Want something you can take with you? See the Consumer Reports PDF booklet summarizing how the ACA helps you and your family.

The Details

The ACA was passed with the vision to provide near-universal access to health insurance. In addition to expanding the number of people with health insurance, it also included a shift in focus from having a disease-focused medical system to having a wellness-focused one. This includes things such as the free preventative services mentioned above, but also the movement towards an electronic medical records system.

    The United States pays more for health care costs per person than any other industrialized country in the world. Reducing health care costs is a huge task, and the ACA moves towards this goal on several fronts.

  1. Getting near-universal coverage: Getting almost everyone health insurance will mean that people get health care when they need it, where they need it. If preventative care helps stop disease before it gets out of control, costs to the healthcare system are greatly reduced. A common example of this is that it is much cheaper to provide someone with daily cholesterol medication than it is to pay for lengthy hospitalization after a heart attack.
  2. Paying for value, not volume: The ACA rewards doctors who coordinate their care between different providers. This means that exam results are shared between your doctors, so that you do not need to go through the same procedures twice. Cutting out duplicate exams means reducing the cost of your health care. Accountable Care Organizations are designed to help with this – they coordinate the care that you receive from a bird’s eye view, and help make sure that all of your health care provider team is communicating effectively.
  3. Focusing on evidence-based care: The ACA also rewards care that is based on scientific evidence. This encourages health care providers to select treatment that is proven to help you, and trims the fat in areas where some services may not have well-tested effects yet.
  4. Focusing on primary care: This gets back to the idea that prevention is king in health care. Focusing on primary care (rather than specialty care) means that we are focusing on the whole health of a person. The goal is to identify potential health problems before they get serious.

Want even more details? Here is the Kaiser Foundation’s 13-page summary of the ACA. There is also this nerdier version of the implementation timeline, customizable by topic or by provisions each year.

Consumer Protections in the Affordable Care Act

The ACA passed with a number of protections for you, the consumer. These are designed to make health insurance more fair for you and your family.

Pre-existing conditions are no longer a barrier. As of right now, insurance companies cannot deny children who have pre-existing conditions. This means that if your child has a pre-existing condition like severe asthma or cancer, they cannot be turned away by insurance companies. Starting January 1, 2014, this rule will apply to adults as well.

Coverage for young adults. Young adults can now stay on their parents’ health insurance plans until the age of 26. See our young adults section for more information.

No cost discrimination against older adults. Older individuals cannot be charged more than three times the amount being charged for the youngest person.

No gender discrimination. This aspect of consumer protections is being phased in. It will be in full use starting in 2014, when women can no longer be charged more than men for health insurance simply because of their gender.

No lifetime caps. Insurance companies will no longer be able to cut off your insurance benefits at a certain dollar amount. This means that if you have costly medical treatment, you can continue to get this treatment as long as you need to, without having to worry about your insurance getting capped. Here is one story of a person who is greatly affected by these lifetime caps.

Prohibiting Insurance Companies from Rescinding Coverage. In the past, insurance companies could search for an error, or other technical mistake, on a customer's application and use this error to deny payment for services when he or she got sick. The health care law makes this illegal. After media reports cited incidents of breast cancer patients losing coverage, insurance companies agreed to end this practice immediately. Effective for health plan years beginning on or after September 23, 2010. (Description taken from healthcare.gov.)

Appealing Insurance Company Decisions. The law provides consumers with a way to appeal coverage determinations or claims to their insurance company, and establishes an external review process. Effective for new plans beginning on or after September 23, 2010. (Description taken from healthcare.gov.)