• The ACA reformed America’s health care by providing numerous rights, benefits, and subsidies designed to make it fairer, easier to understand, and more affordable.
• The ACA requires coverage for pre-existing conditions, free preventive care, an end to “lifetime” and “yearly” coverage limits, holds insurance companies accountable for rate increase, requires minimum expenditures on benefits, prevents cancellation of policies due to accidental application errors, and promotes doctor choice and ER access.
• The ACA’s “mandatory” state Medicaid expansion was deemed unconstitutional, but many states have voluntarily expanded Medicaid to cover more people with low incomes.

The Patient Protection and Affordable Care Act of 2010, also known as health care reform, was enacted on March 23, 2010. A companion bill, the Health Care and Education Affordability Reconciliation Act of 2010, was enacted on March 30, 2010. Together, these laws are referred to as the Affordable Care Act, or ACA.

ACA rights and benefits

The ACA provides numerous rights that make health coverage fairer and easier to understand, along with benefits and subsidies (through “premium tax credits” and “cost-sharing reductions”) to make it more affordable. The ACA also allows states the option to expand Medicaid programs to cover more people with low incomes.

The ACA:

• Requires insurance plans to cover people with pre-existing health conditions, including pregnancy, without charging more.
• Provides free preventive care.
• Gives young adults more coverage options.
• Ends “lifetime” and “yearly” dollar limits on coverage of essential health benefits (EHBs).
• Holds insurance companies accountable for rate increases.
• Makes it illegal for health insurance companies to cancel due to illness or accidental application errors.
• Protects doctor choice and ER access.
• Protects from employer retaliation.

“Lifetime” and “yearly” dollar limits eliminated

Insurance companies cannot set a dollar limit on what they spend on EHBs for care during the entire “lifetime” of enrollment in that plan, or a “yearly” dollar limit on what is spent for coverage.

Note: Protections against lifetime limits on coverage apply to all individual and job-based health plans, including grandfathered plans. Protections against annual limits apply to most health plans, but they don’t apply to grandfathered individual health plans. “Grandfathered plans” are those created or first purchased prior to March 23, 2010, the enactment of the ACA.

Rate review and 80/20 rule

Insurance companies must now publicly explain any rate increase of 15 percent or more before raising premiums. This does not apply to grandfathered plans.

The 80/20 rule (sometimes called the “medical loss ratio” or MLR) generally requires insurance companies to spend at least 80 percent of the money they take in from premiums on health care costs and quality improvement activities. The other 20 percent can go to administrative, overhead, and marketing costs.

Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85 percent of premiums on care and quality improvement.

If an insurance company doesn’t meet these requirements, the enrollee will get a rebate on part of the premium paid.

Policy cancellations

It’s now illegal for insurance companies to cancel an enrollee’s coverage simply because an enrollee becomes sick or because the applicant made an honest mistake or left out information on an application that has little bearing on health. This protection applies to all health plans, including grandfathered plans, whether the coverage is through an employer plan or not.

Caution: Insurance companies can still cancel coverage if false or incomplete information is “purposely” entered on an insurance application. Cancellation can also occur if premiums are not paid on time.

Doctor choice and ER access

Individuals have the right to choose any doctor from the health plan’s provider network. Out-of-network emergency rooms (ERs) can be used without prior approval and without penalty. No referrals are needed from a primary care provider for obstetrical or gynecological (OB-GYN) services from a specialist.

Note: These doctor choice and ER access rights do not apply to grandfathered health plans.

Retaliation protection from employers

It’s against the law for an employer to fire or retaliate against an employee:

• For getting a premium tax credit when a health plan is purchased in the Marketplace; or
• If an employee reports violations of the ACA’s health insurance reforms to an employer or the government.