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What makes the Affordable Care Act so affordable?

What Makes The ACA So Affordable | UPMC Health Plan


When President Obama signed the Affordable Care Act (ACA), also known as health care reform, into law several years ago, The New York Times called it “the most expansive social legislation enacted in decades.”

But what makes it so affordable? Within the ACA, “affordable” means balanced. The goal of the ACA is that everyone is covered and that everyone can afford coverage.


Here are five things you need to know about the ACA:


  1. Health coverage is now available to almost everyone, and no one can be turned down because of an existing health condition. The policy that states insurers offering plans on the Health Insurance Marketplace must provide coverage to anyone who wants it is called guaranteed issue. Under the ACA, as long as your health coverage is available in your area, it is also guaranteed to renew for as long as you want it.


  1. You can shop for insurance on the Health Insurance Marketplace. The ACA created a central online location for health insurance in each state called the Health Insurance Marketplace. This is where individuals and families can shop for, compare, and enroll in health coverage every year during the open enrollment period (or at other times throughout the year for those with qualifying life events). All insurers must offer plans that fit into the metallic levels set by the ACA. These levels — Bronze, Silver, Gold, and Platinum — denote the average percentage of health care costs that are covered by each plan.


  1. Those who need financial assistance to afford their coverage may receive Advance Premium Tax Credits, which help pay for premiums in Marketplace plans. This system, as part of the ACA, is designed to create a financial balance. You can find out if you are eligible for an Advance Premium Tax Credit when you sign up for health insurance on the Health Insurance Marketplace.


  1. The ACA put new limits on cost sharing for everyone, regardless of income. Cost sharing refers to your out-of-pocket costs such as copayments, deductibles, and coinsurance. The new limits on cost sharing state that the maximum amount a plan can require people to pay out-of-pocket for their covered in-network health services is $6,850 for individual coverage and $13,700 for family coverage for 2016 (subject to updates each year).


  1. Preventive services are included in all Health Insurance Marketplace plans under the ACA. This means that as long as you’re insured, you’ll have access to preventive services such as screenings and immunizations as part of the 10 health categories of Essential Health Benefits created by the ACA, without paying out-of-pocket costs such as copayments or coinsurance.


Learn more about the ACA here.