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. Together, these changes are estimated to expand coverage to 32 million people who were previously uninsured.

Insurance reforms

Beginning in 2014, the ACA requires health insurers to accept all applicants for insurance, regardless of their health status. In addition, insurers will no longer be allowed to charge higher premiums or exclude benefits because someone has a pre-existing condition. Most insurers will also be 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

Insurance Exchanges

Premium and cost-sharing subsidies

Individual requirement

Employer requirements and benefits

Medicaid expansion

The ACA expands Medicaid coverage to all individuals under age 65 with incomes up to 133% of the federal poverty level. Newly eligible adults will have access to a package of health benefits that at least provides the essential benefits required under the ACA.

The ACA also alters the financing for Medicaid. The federal government will pay for all or most of the costs of the newly eligible individuals getting Medicaid. In addition, the federal government will increase payments for primary care services provided by primary care doctors to 100 percent of the Medicare rates in 2013 and 2014, using 100 percent federal financing for the difference in rates.