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- The Affordable Care Act was passed by congress in March 21, 2010
- President Barack Obama signed the ACA into law in March 24, 2010
- The state program that resembles the ACA was one in Massachusetts signed into law by Governor Romney in 2006.
- Those required to have insurance face a tax and penalty for failing to get and keep insurance coverage.
- The Children’s Health Insurance Program was signed into law in 1992
- Medicaid and Medicare began in the Great Society Programs of 1965
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National health insurance in the US became a reality with the enactment of The Patient Protection and Affordable Care Act of 2010. The law was passed by Congress in 2009 and 20010. The final House action was in March 2010 and the bill was signed into law by President Obama on March 24, 2010.
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Universal Coverage through the Individual Mandate
The key feature of the law is in the individual mandate that requires everyone to buy health insurance unless exempt. The law was modeled after the Massachusetts health care reform.
The Affordable Care Act went into effect in 2010. Its rules and regulations affected many parts of the health care industry as did some special taxes and fees.
Application of Industry Reforms
The law revised standards for health insurance including group plans sponsored by employers and unions. The law favored provision of health insurance by large employers. It applied to employers with fifty or more employees, but also set up a robust system for providing plans for individual purchase.
The first year of full insurance penalties began in January 2014. By requiring a minimum level of benefits and value, many insurance policies were disallowed in favor of more meaningful and beneficial coverage.
The Individual Responsibility Payment
The individual mandate requires insurance coverage throughout the year. The below-listed items describe the penalties for no insurance for the years 2014–2016. The IRS applies the penalty on the basis of 1/12 for each month of no insurance coverage.
2014 tax and penalty:
Individual adult $ 95
Individual Child $47.50
Family maximum the greater of $285 or one percent of family income.
2015 tax and penalty:
Individual adult $ 325
Individual Child $162.50
Family maximum the greater of $975 or two percent of family income.
2016 tax and penalty:
Individual adult $ 695
Individual Child $247.50
Family maximum the greater of $2,085 or two and one-half percent of family income.
Individual Tax Credits Financing Structure
The ACA permits qualified buyers to save on premiums by using tax credits to offset the monthly costs. The law also made insurance more affordable by setting limits on out-of-pocket costs. The law defines affordable policies could be no more than 8 percent of income, and employer plans could be no more than 9.5 percent of family income.
Small Business Provisions
The ACA set up a system to assist small business called SHOP. It includes tax incentives for small businesses with 25 or fewer employees. These firms could provide insurance for employees and receive tax credits up to fifty percent of certain costs. By these provisions, many small business owners could get insurance for themselves and their employees while collecting valuable tax credits.
Universal Acceptance for Insurance Coverage
The law requires that insurance companies accept every applicant without regard to prior medical history or pre-existing conditions. They can no longer refuse coverage nor discriminate against applicants on any unlawful basis. The backdrop of the debate on the ACA disclosed many private insurance practices that made insurance difficult, expensive, and sometimes impossible, such as for child-bearing age women and severely ill children.
Health Insurance Marketplace
Health insurance in the US is a federal law. However, the insurance comes from private insurance companies. The ACA relies upon the private sector to provide qualified health plans. The states and the federal government have the power to accept, review and approve qualified health plans for sale on the insurance exchange.
Insurers base plan pricing on demand for services, geographic area, and on the age of the individual applicants.
They may charge more for candidates that use tobacco and later reduce those fees as consumers use tobacco cessation programs to improve their health.
Insurance plans keyed to age, location, and status
The ACA permits insurance companies to use location as a factor in setting premiums along with age, and tobacco usage. The qualified insurance plans offered trough the exchanges meet the requirements of the law for providing ten essential health benefits; they must use location to determine thew available types and capacities for health care services.
Similarly, when a policyholder moves to a new location, they may have to buy a new policy and one that serves the new location.
A Short History and Background
There are several nations in the western world with universal health care services. Notably Canada, Britain, Norway, Sweden, Belgium and most of the leading nations of Europe. The US has lagged behind other wealthy nations in agreeing to a national system of guaranteed health and medical services. The below-listed issues were leading topics in the presidential election of 2008.
- Universal or National Health Care
- Invasion of Iraq and Afghanistan
- Recession and stock market crash
- business banking system and credit failure
The Enactment of Medicare and Medicaid
After the assassination of President John Kennedy, President Lyndon Johnson won a landslide victory over Barry Goldwater in 1964. The election changed the Congress into large Democratic majorities. With national sentiment and political power in his favor, Johnson developed his Great Society programs. These extensive networks of domestic funds and programs included medical services for the elderly( Medicare) and medical services for those unable to afford care(Medicaid). Obamacare strengthened both Medicaid and Medicare.
The Children’s Insurance Program (CHIP)
The Clinton Presidency promised to develop universal healthcare. The project featured the leadership of First Lady Hillary Clinton and included a wide range of views from scholars, business leaders, and healthcare industry officials both in and outside of government. Modeled on successful implementations in the UK and Canada, many proposals came under intense review.
The Pennsylvania state program, the HB 20 CHIP program was a prominent US model for the eventual federal program. In the end, there was no new national healthcare law, but the legislative initiatives began in this time that led to the enactment of the federal Children’s Health Insurance Program in 1997.
A Divided Country on Health Care
Despite overwhelming public support for changing the healthcare system in 2008, there was no deep sense of agreement on how to do it. The Congress spent more than one year debating and piecing together the parts of a massive overhaul of the US healthcare delivery system.
There was a sharp political division supporting and opposing the insurance arrangement finally enacted and signed into law. Many advocates supported a single payer system that would maximize price leverage with insurance providers.
Pre-existing Conditions
Universal health care requires treatment for all eligible persons and not just those with good health. The ACA forbade price discrimination against applicants except for location, age, and smoking (tobacco use) status.
Persons with existing illness benefit from access to medical care, and overall the impact on the nation’s health and healthcare finances is positive.
Legal Challenges to the ACA
The states that had Republican governors refused to adopt the healthcare law and called on the Supreme Court to declare it unconstitutional.
The Court instead upheld the law in part as the Congress’s power to create and impose taxes. The Supreme Court later upheld the law against a challenge to the key provisions regarding tax subsidies.
Medicaid Expansion to Cover Low-Income Residents
The ACA expanded health care services by insurance and direct services. It extended Medicaid to cover more people with low incomes. Part of the health care reform plan included increased emphasis on early detection of diseases and prevention.
This is particularly true of those without adequate insurance and access to medical care. Their conditions can go untreated until they involve complications and vastly inflated medical costs when contrasted with the treatment at early stages.
Mental Health and Addiction
One principle of the ACA that has brought a dramatic change to medical care is treatment of mental health condition and addictions. Classifying mental health issues and addictions as diseases have reduced the social barriers to treatment, and it has increased the resources available to support recovering addicts and their families.
Prevention
Treating serious diseases requires enormous amounts of medical care and resources. The treatment must sometimes continue for an entire lifetime. For example, type 2 diabetes is treatable in its early stages. Doctors can sometimes treat it with recommendations for diet modification and exercise.
In later stages, it may require intensive medical intervention often involving surgery and extensive hospitalization. The value of prevention is a key concept in the ACA. Prevention avoids human suffering and has a potential to slash the nation’s expenditures on medical care.
Encouraging Early Detection
Beginning in 2010 with the implementation of the ACA, health plans provide an extensive listing of wellness and early detection tools available at low or no costs to consumers. These include laboratory work, examinations, medical tests, and procedures for addiction treatment and detecting mental health issues.
By promoting early detection, prevention, and wellness, the ACA has a vast potential to reduce the nation’s healthcare costs.
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