The Affordable Care Act:
How the Law Helps (and Doesn’t Help)
People with Chronic Illnesses
People with chronic illnesses in the United States have suffered greatly under the country’s broken healthcare system which has been in desperate need of reform for decades. Too many people have gone bankrupt trying to cover enormous medical bills; the high cost of prescription drugs means some are forced to choose between paying for food and buying life-saving medicines; health insurance companies, the real “death panels,” have denied life-saving treatments and medications to people with chronic illnesses.
Under pre-ACA policies, people with chronic illnesses have faced incredible barriers to obtaining and keeping health insurance. They have been more vulnerable to maxing out annual and lifetime caps on payments for their treatments; insurance companies have charged higher rates to people who are sick or have denied them coverage all-together; and, those who have lost their jobs due to illness have often lost their employer-provided health insurance as well.
The figures are heartbreaking. About 25 million people with chronic health conditions are uninsured—2 million of these are children. An estimated 60 percent of uninsured people with chronic illnesses delay care because they cannot afford it (healthcare.gov). The Institute of Medicine estimates that someone in the United States dies from lack of health insurance every 30 minutes (Harvard Gazette, 2009). None of this suffering is necessary. While the Affordable Care Act of 2010 is imperfect, it is a definite improvement for people with chronic illnesses. There are some dramatic changes starting on January 1, 2014, which are sure to ease the many problems people with chronic illnesses have encountered with healthcare in the United States.
How the ACA Helps People with Chronic Illnesses:
The ACA includes many changes to healthcare, some quite noticeable and others more obscure. While this is not an all-inclusive list, these are some of the main changes people with chronic illnesses can expect with the ACA.
Children under the age of 19 can no longer be classified as having “pre-existing conditions” In effect: now
Among of the first parts of the Affordable Care Act to go into effect was something that few could disagree with–insurance companies could no longer deny coverage or charge more money to cover sick kids. Before the ACA was passed in 2010, children with chronic illnesses with a lapse in health insurance coverage could be denied future coverage. Parents worried about losing health insurance for their sick kids if they ever lost or changed their jobs.
Adults age 19 and older can no longer be classified as having a “pre-existing condition” In effect: January 1, 2014
Starting in 2014, the same protection now existing for children with chronic conditions will apply to adults as well. Adults with chronic illnesses will no longer be denied insurance policies and they will no longer be charged higher insurance premiums because they are sick.
Children can stay on their parents insurance until the age of 26 In effect: Now
This is true regardless of whether or not an adult child is married or enrolled in school.
More generic drugs In effect: now
The ACA allows the U.S. Food and Drug Administration to approve more generic medications. These drugs tend to be less expensive than their brand-name equivalents. The ACA mentions biologic drugs specifically—which is a group of newer medicines used to treat several autoimmune disorders. The ACA states that after 12 years on the market, a generic equivalent of a biologic can be made. Before the ACA, there was no time limit for how long a pharmaceutical company could hold exclusive rights to produce these expensive medications.
Annual limits on people’s out-of-pocket medical expenses
In effect: January 1, 2014 January 1, 2015 (delayed implementation)
Individuals with insurance policies will have a total $6,300 limit on their out-of-pocket expenses for deductibles and co-pays, including prescription drugs. Families will have a $12,700 limit on out-of-pocket expenses. The out-of-pocket limits are in addition to health insurance premiums.
No more life-time or annual caps on how much insurance companies will pay for medical care In Effect: Now (some insurance companies have waivers until 2014)
The ACA ends the annual and life-time caps insurance companies will pay for an individual’s medical costs for “essential health benefits.” Essential health benefits cover most costs associated with chronic illnesses, including but not limited to hospitalizations, management of chronic illnesses, preventative care and prescription drugs.
Lower-cost healthcare coverage
- Expanded Medicaid In effect: January 1, 2014
In participating states, Medicaid will be expanded to cover individuals and families making up to 138% of the federal poverty line. However some states have decided not to participate in Medicaid expansion. To see if your state plans to participate in the Medicaid expansion program, see the Medicaid expansion map. Keep in mind that this map is constantly changing as states that have been reluctant to participate in Medicaid expansion come on board.
- Subsidies for health insurance on the state exchanges In effect January 1, 2014
Families making between 100 and 400 percent of the federal poverty level (up to $45,960 for an individual and up to $94,200 for a family of four in 2013) are eligible for a health coverage tax credit on a sliding scale.
Insurance provides free preventative care (no co-pays or deductibles)
In effect: now
Under the ACA, there are no deductibles or copay costs for a number of preventative care visits and exams. Plans purchased before March 23, 2010 are “grandfathered in” and can still charge for preventative care.
Essential Health Benefits (EHB) included in health plans sold through the Exchanges
In effect: January 1, 2014
All plans sold in the health exchanges must cover certain benefits called “Essential Health Benefits.” Plans that were bought before March 23, 2010 are not required to cover EHB’s. EHB’s include:
- ambulatory patient services
- emergency services
- maternity and newborn care
- mental health and substance use disorder services, including behavioral health treatment
- prescription drugs
- rehabilitative services and devices
- laboratory services
- preventive and wellness services
- chronic disease management
- pediatric services, including oral and vision care
Chronic disease management
in effect: January 1, 2014
One of the focuses of the ACA is to improve the health of people with chronic illnesses and decrease the costs of treating their health conditions. The law seeks to achieve these goals by:
- Coordinating medical care between the different doctors and facilities treating the same patient;
- Reducing the duplication of medical tests–if one doctor orders a test, the results are shared with all providing care for the patient;
- Providing education to people with chronic conditions;
- Collecting data that measure quality of care and outcomes;
- Encouraging “evidence-based care,” which includes tests, treatments, and medications with proven track records for being both effective and cost-efficient; and
- Medication management.
- Some of the strategies in the ACA for managing chronic illnesses are controversial because similar versions have had mixed results in the past.
The coordination of care has similarities to the old HMO models, and “evidence-based care” has been used in the past by insurance companies to deny payment for services prescribed by physicians. However, proponents of the ACA insist that the techniques used in the ACA will be different and better than the older models.Changes to the insurance appeal process.
The ACA provides reforms to the appeal process including:
- Quicker appeals for urgent care In effect: now
Decisions for “urgent medical situations” must be made within 72 hours.
- A new federal external review process In effect: January 1, 2014
The ACA creates an external review process for appeals which could make decisions more consistent and fairer. Regardless of what state a person lives in or which insurance policy they have, the same rules will apply.
Who is Falling Through the Cracks?
Those who pay the mandate
In Effect: January 1, 2014
Even with the ACA, some people may still find the cost of health insurance prohibitively expensive. However, health insurance will be mandated, so those who do not buy it may need to pay the penalty. There is no healthcare provided with the payment of penalties.
- Tax penalties for not owning a health insurance policy
In effect: January 1, 2014
The penalty for not having a health insurance plan with minimum essential coverage starts in 2014 and increases incrementally through 2016:
- 2014: 1% of income or $95 per adult (whichever is higher)
- 2015: 2% of income or $325 per adult
- 2016: 2.5% of income or $695 per adult
- Family penalties: The fee for children who do not have health insurance is half the adult amount. Fees are capped for families– the most a family would have to pay in 2014 is $285.
- Fees are paid when filing income tax returns.
- Undocumented immigrants are left out of both the benefits and the mandates of the ACA. They cannot buy health insurance on the exchanges, do not qualify for any health subsidies, and cannot get Medicaid. The only healthcare options available to undocumented immigrants are to get it through an employer; pay full price for private individual insurance; pay for medical services without insurance; or resort to visiting emergency rooms.
- Newly documented immigrants are eligible for all the benefits of the ACA, and are also subject to the tax mandate if they do not have a health insurance policy. There is a 5-year waiting period to qualify for Medicaid, although some states have waived the 5-year waiting period for children and pregnant women.
Residents of states rejecting Medicaid expansion
The ACA increases the eligibility for Medicaid to include people making up to 138% of the federal poverty line (FPL). People making between 100% and 400% of the FPL are entitled to subsidies for health insurance in their states’ exchanges. However, a gap in coverage occurred when the Supreme Court made it optional for states to expand their Medicaid programs in their 2012 decision on the ACA.
To date, there are 15 states refusing federal funds to expand their Medicaid programs, and several more who are still deciding whether to participate in the expansion. The ACA was not amended to accommodate for the Supreme Court ruling, leaving a potential gap in coverage for people in states rejecting Medicaid expansion. People in those states making less than 100% of the FLP may not qualify for any help—neither Medicaid nor a subsidy to buy insurance on the exchanges. To fix this problem, the ACA would need to be amended.
People with “grandfathered” health plans
Both individual and employer plans in effect before March 23, 2010, are “grandfathered” and exempt from some of the ACA’s rules and protections. Grandfathered plans must still follow some of the rules, including coverage for dependents under age 26 and the elimination of lifetime spending caps. But the grandfathered plans are exempt from other requirements. Grandfathered plans:
- Are not required to provide free preventative care;
- Do not have to offer a package of “Essential Health Benefits;”
- Can impose annual spending limits on individual health plans; and
- Can refuse to cover people with pre-existing conditions.
Grandfathered plans can be a problem for people with chronic illnesses. In 2013, 36 percent of employer plans were grandfathered. Luckily, health insurance plans are expected to lose their grandfathered status over time as employers buy new healthcare policies (Kaiser Health News.)
People who are exempt from the mandate to have health insurance (but will still not have health insurance).
The following groups are exempt from the mandates and benefits of the Affordable Care Act:
- People who would need to pay more than 8% of their income for the bronze-level (lowest level) plan in their state’s health insurance exchange, after taking into consideration any employer contributions or health insurance tax credits;
- Undocumented immigrants;
- People in jail;
- Members of Indian tribes;
- Members of religions opposed to health treatments available through health insurance plans (applies only to specific religions);
- Income is below level required to pay taxes; and
- Individuals in hardship situations (as defined by Health and Human Services)
Unfounded ACA Myths:
Government “Death Panels”: Opponents of the ACA have claimed that the law creates death panels, which would deny treatments to people who are old or very sick. This would be particularly concerning to people with chronic illnesses if it were true—which it isn’t. There are no death panels instituted by the federal government—quite the opposite. The ACA will, in fact, help limit the health insurance companies’ denials of treatment to people with chronic conditions.
The ACA is a government takeover of healthcare: The ACA will not be managed by the government. Health care policies will continue to be sold and managed by private companies, with doctors providing the treatments, as always. The ACA does provide regulations of the insurance companies which will benefit people with chronic illnesses. These regulations will protect people from discriminatory practices, provide a minimum package of services, and make healthcare more affordable.
The ACA is a socialist program: The ACA is a combination of capitalism and socialism. While the ACA is marginally socialistic– with Medicaid expansion and subsidies to buy insurance–the foundation of the ACA is quite capitalistic. Healthcare will still be provided through private health insurance companies with private doctors. The health insurance companies compete for customers in the state market exchanges. This open competition is expected to lower prices for policies. Since people with health problems tend to be a drain on profits, they would arguably be better protected under a more socialist healthcare system, not less.
Is there a Better Way to Provide Healthcare?
The unnerving fates suffered by people with chronic illnesses in the United States are sure to lessen with the ACA. The law has already helped people with chronic illnesses and the most dramatic benefits are coming soon–on January 1, 2014.
However, the ACA is not a perfect law. Under the ACA, people with chronic illnesses will still find a large portion of their incomes going to pay for premiums, deductibles, and co-pays for medical visits, procedures, and medications. And, even with subsidies, many uninsured will still find it difficult to fit in the expense of health insurance into their already squeezed budgets.
A single-payer healthcare system is arguable a more effective, efficient, and fairer way to provide healthcare. In this system, healthcare is universal and paid for through income taxes. Despite the amount of their tax contributions, everyone gets healthcare. In a single-payer healthcare system, there are no “networks” of doctors or hospitals limiting people’s choices. Doctors are paid directly by the government, and everyone is free to see any doctor.
In countries with single-payer universal healthcare systems, the cost of healthcare is less and their citizens’ tend to enjoy better health outcomes. Canada and the United Kingdom are often held up as successful examples of single-payer healthcare. At last count, 16 countries had adopted a single-payer healthcare system (truecostblog.com). Starting in 2017, the ACA allows states to adopt single-payer healthcare on their own. Hopefully some states will take that bold step.
Making the best of the healthcare reform we’ve got
Despite the shortcomings of the ACA, it is still a vast improvement for the United States and for people with chronic illnesses. It is the most significant health care reform in this country since Medicare was passed in 1965.