Protecting Pennsylvania's Health: Standing Up for the Affordable Care Act
The Patient Protection and Affordable Care Act, signed into law on March 23rd, 2010, puts an end to some of the worst insurance company abuses and levels the playing field to give working families, seniors, and small businesses access to the kind of stable, quality, affordable health coverage that has been out of reach for so many, for far too long.
The law makes health coverage more secure by making sure no more families are denied care due to a pre-existing condition, or lose their coverage or be forced into bankruptcy when someone gets sick.
Here are the top 10 things the law does to bring security, dignity and peace of mind to all Pennsylvanians:
1) Ensures all Americans access to high-quality, affordable health coverage, regardless of age, gender or health status.
The law puts a stop to the awful practice of insurance companies denying coverage to people based on their pre-existing conditions, health status, gender, or age. It also bars insurance companies from charging women, older folks and people with pre-existing conditions more--as they routinely do now. (Effective for kids in Sept. 2010; for adults in Jan. 2014. PA Fair Care, a temporary, comprehensive insurance plan for adults with pre-existing conditions is available now, until 2014. See: www.PAFairCare.com)
2) Ensures that all Americans have access to stable, high-quality health coverage, no matter where they work.
Losing your job doesn’t mean losing your health care any more. The law authorizes states to creates a new, competitive marketplace where those without job-based coverage can easily shop for quality, affordable coverage--and receive a tax credit (based on their income) to help make coverage affordable. This new competitive insurance marketplace will allow for real competition among insurers and will finally give people purchasing insurance the kind of quality, high-value and easy-to-compare options that have been out of reach for years.
All plans offered in this new marketplace will be private insurance plans, but they need to meet high standards for quality and affordability, and they must all cover “essential benefits,” including: ambulatory care, emergency care, hospitalization, prescription drugs, maternity and newborn care, mental health and substance abuse treatment, rehabilitative care, laboratory services, preventive and wellness services, chronic disease management, and pediatric services.(1)
Income-based tax credits are available to individuals and families with incomes as high as 400% of the Federal Poverty Level ($88,000 for a family of 4), and there are caps on premiums and out-of-pocket costs to protect families from falling into financial ruin over health care costs.(2) (Effective Jan. 2014)
3) Gives all Americans the peace of mind and security that comes with being protected from falling into financial ruin over out-of-control health care costs.
Even those who have coverage have been hit hard by the high cost of health care; millions of American families were forced to rack up huge debts to pay for they care they needed. In 2009, 14.3 million Americans with insurance spent a quarter of their income on health care. 25 percent of their pre-tax income on health expenses.(3) Health care costs are the leading cost of bankruptcy in the United States.(4)
The law sets a limit on the amount that families will have to put toward premium payments and out-of-pocket costs, finally giving some protection from the skyrocketing health care costs that have forced millions of hardworking families into bankruptcy. The amount that anyone will have to pay out of pocket for health expenses each year will be capped, and low-to-moderate income people will receive extra help in the form of tax credits to help pay for out-of-pocket costs. (Effective Jan. 2014)
4) Gives policyholders more bang for their buck, and cracks down on arbitrary and unjust premium hikes by insurance companies.
Right now, there is very little transparency or accountability for how insurance companies use our premium dollars. They can use them for advertising, lobbying, CEO salaries and board member perks--things that have nothing to do with the quality or value of our coverage.
The law puts a stop to this bad behavior by requiring insurance companies to spend at least 85% of policyholders’ premium dollars on actual health care--giving all Americans more bang for their buck. If a company doesn’t meet this standard, they have to give all policyholders a rebate for the difference. The law also empowers states to put in place a ‘rate review’ process to hold insurance accountable to keeping rates reasonable.
This would finally give the public a voice in challenging--and stopping--unnecessary and harmful insurance rate increases. States can set their own standards, but can choose to require insurance companies to prove any proposed rate increases above a certain level are necessary and appropriate, not arbitrary and related to the company’s desire to pocket more profit. They can also choose to give the state Insurance Department the authority to review and reject any rate increases that are exorbitant and/or unjustified.(5) (Effective Sept. 2011, rebates begin in 2012)
5) Puts a stop to the worst insurance company abuses, like cutting your coverage when you’re sick and need it most or refusing to pay for the care you need (and are paying for!).
Right now, there is little protection for policyholders who find themselves fighting with their insurance company to get them to cover what they said they would. Time and again, people have seen their coverage cut and their claims denied when they try to use their insurance to cover the care they need.
The new law bars insurance companies from unfairly revoking or rescinding insurance coverage--a terrible practice, called “rescission”--when someone gets sick, and it puts in place a state-level process, through the Insurance Department, where policyholders can fight back (and get answers, and a definitive outcome within a set timeframe) to challenge a coverage or claim denial by their insurance company. The law also bars insurance companies from setting lifetime or annual limits to on your coverage, protecting those with serious and costly-to-treat conditions from running out of coverage.(6) (Effective Sept. 2011)
6) Helps small businesses by offering tax credits so they can afford coverage for their workers and allows them to pool together to have the same bargaining power as big corporations.
Small businesses are no longer on their own when it comes to finding and keeping affordable health coverage. The new law offers substantial tax credits to small employers to help offset the cost of offering coverage to employees.
Small businesses that pay at least 50% of their employees’ health insurance premiums and have less than 25 full-time workers with average annual wages below $50,000 are eligible for these tax credits up of to 35% of their healthcare costs (the credit is 25% for non-profit employers). Employers with 10 or fewer full-time employees, paying annual average wages of $25,000 or less, qualify for the maximum credit. (Effective Sept. 2010)
These credits will increase from 35% of premiums to 50% of premiums for for-profit employers and from 25% of premiums to 35% of premiums for non-profit employers in 2014.(7) Small businesses will also be able to purchase coverage through the new competitive state-based marketplaces and will benefit from the new buying power they will gain from being able to purchase in groups. (Effective Jan. 2014)
7) Keeps young adults covered by requiring insurers to allow all dependents to remain on their parents’ plan up to age 26.
Finding a job as a recent graduate is tough enough in today’s economy--let alone finding a job with health coverage. The new law gives parents and their young adult children some breathing room by allowing all young adults to stay on their parents’ or guardians’ health insurance plan until the age of 26.
The young adult can be married, or live in another state, and still remain covered. If the young adult is offered job-based coverage, they cannot choose to stay on their parents’ plan. This changes in 2014, when they can elect to stay on their parents’ plan if the coverage is better than what their employer offers. (Effective Sept. 2010)
8) Ensures that lower-income working families don’t fall through the cracks by expanding Medicaid coverage to individuals making up to 133% of the Federal Poverty Level.
Right now, it is very difficult to qualify for Medicaid. You must be extremely low-income, have certain qualifying medical conditions, or have young children. This has left millions of low-income adults (many of whom are working at low-wage, no-benefit jobs) shut out from getting any kind of coverage. The new law helps this bad situation by raising the eligibility level for Medicaid to 133% of the Federal Poverty Level (around $16,000/year for an individual in 2014) and--for the first time--allows childless adults to be covered. (Effective Jan. 2014)
9) Strengthens Medicare by helping seniors and people with disabilities afford their prescriptions and preventive care, and extends Medicare’s solvency another 12 years.
Everyday, seniors are forced to make impossible choices to maintain their health on a fixed-income. The new law helps this terrible situation by closing the “doughnut hole” coverage gap in the Medicare Part D prescription drug benefit and offering substantial discounts on brand name (50%) and generic (7%) drugs while in the doughnut hole. These discounts will increase each year until the doughnut hole is completely eliminated by 2020. (Effective Jan. 2010)
The law also gives seniors on Original Medicare access to vital preventive services, for free, including things like mammograms, colonoscopies, dementia screening and an annual flu shot. (Effective Jan. 2011)
And by reducing unnecessary and system-draining overpayments to private insurance companies offering supplemental (Medicare Advantage) plans, the law saves billions of dollars that are reinvested to extend the solvency of Medicare another 12 years. (Effective Jan. 2011)
10) Makes important investments in preventive care and works to improve the quality of health care delivery.
The new law also makes important investments to improve the quality and delivery of care in our system. The law allows for new pilot programs focused on bringing down costs, preventing errors, focusing on patient-centered care and improving the coordination and delivery of care. To improve the quality of care, doctors and hospitals will be rewarded for providing better-quality care and demonstrating improved health. (Several provisions already in effect: see http://healthreform.kff.org/Timeline.aspx)
Download a printable brochure to share with your friends, family, neighbors and in your community. Drop copies off the local library, coffee shop, grocery store, laundromat and anywhere else with public bulletin boards. Take some to your state representatives' office!
(1) Lower Taxes, Lower Premiums: The New Health Insurance Tax Credit in Pennsylvania. A Families USA Report, Sept. 2010: http://www.familiesusa.org/assets/pdfs/health-reform/premium-tax-credits/Pennsylvania.pdf
(2) View tax credits and premium caps by income level here: http://www.communitycatalyst.org/doc_store/publications/Affordability_in_ACA.pdf
(3) Too Great a Burden: Americans Face Rising Health Care Costs (Washington: Families USA, April 2009).
(4) David Himmelstein, Deborah Thorne, Elizabeth Warren, and Steffie Woolhandler, “Medical Bankruptcy in the United States, 2007: Results of a National Study,” The American Journal of Medicine 122, no. 8 (August 2009): 741-746.
(5) Rate Review: A Way to Limit Increases to Health Insurance Premiums. Policy brief by Community Catalyst. Available at: http:// www.communitycatalyst.org/doc_store/publications/Rate_review_fact_sheet.pdf
(6) The Affordable Care Act: Patients’ Bill of Rights and Other Protections. Available at: http://familiesusa2.org/assets/pdfs/health-reform/Patients-Bill-of-Rights.pdf
(7) Health Reform FAQ. Overview from Small Business Majority. Available at: http://www.smallbusinessmajority.org/hc-reform-faq/