Affordable Care Act - What You Should Know

What is the Affordable Care Act (ACT)?
What is the Affordable Care Act (ACT)?

Affordable Care Act, also popularly known as Obamacare, is a federal health reform legislation that was signed into law by President Obama on March 23, 2010. ACA was designed to address the barriers in the American health insurance system and aimed to provide access to affordable health insurance to all Americans. 

ACA has been controversial from the beginning and has hit some stumbling blocks over the decade. Though ACA is a widely debated topic some people are still unclear about what it is and how it works. ACA has an effect on all our healthcare services, and thus it is important to understand the key points and the updates.

How does ACA work?

ACA was designed to expand coverage to all Americans, and some steps were implemented. 

• Healthcare costs were to be reduced by providing tax credits for households with income between 100% and 400% of the federal poverty line.

• Expand Medicaid coverage to U.S. adults with income 138% below the poverty level.

• Every ACA plan must to cover basic 10 healthcare services like prescription drugs, emergency services, laboratory services, etc with some offering additional benefits too.

To get ACA coverage, there is an open enrollment period every year that begins at January 1. To apply for the health insurance program, visit Health Insurance Marketplace to learn about the plans available in your state or you can get the help of your insurance agent.

The health insurance plan you are on can last for the full year but needs renewal during the next enrollment period. If you miss the deadline due to certain situations, you qualify for a Special Enrollment Period (SEP). This year due to the COVID-19, the SEP has been extended throughout this year till December 31, 2021.

ACA and American Rescue Plan

On 23rd March 2021, ACA had its 11th year anniversary, and President Biden’s American Rescue Plan has made ACA more affordable. This update has come into effect starting from April 1, 2021. 

What’s changed?

• The income cap that has restricted people from qualifying for ACA tax credits to reduce the cost of monthly insurance premiums has been eliminated. This means that people with income above 400% of the federal income level can also get tax credits.

• The maximum level of health care coverage that an individual has to pay is limited to 8.5% of his/her income. 

• Lower-income customers who have income between 100% and 400% of federal income level will be provided with boosted subsidies.

• These new provisions are temporary and will not extend past 2022 unless Congress acts to extend it or make it permanent. 

Allied Brokers

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