How the Affordable Care Act (ACA) Helps People Afford Insurance
The Affordable Care Act (ACA), also known as “health care reform” was signed into law in March 2010. The law made several changes to health care including access to affordable health care. To increase access to affordable health care, the law created a New “Adult” Medicaid program and a new Health Insurance Marketplace.
Currently many individuals receive health coverage through Medicaid.Medicaid is a state and federally funded program that provides health coverage to certain groups (pregnant women, children, some parents, older adults, and people with disabilities). To qualify for Medicaid, people must be in one of these categories AND have income and assets below Medicaid requirements.
Because of the Affordable Care Act, Medicaid coverage will be available in 2014 to anyone ages 19-64 with income below 138% of the federal poverty level (about $15,856 for one person in 2013). Individuals must also meet the citizenship requirements for Medicaid to be eligible. This coverage may be different than current Medicaid coverage (but must cover certain “essential health benefits”). Through this new Medicaid program, about 350,000 adults in Illinois will have access to care, including doctor visits, screenings, tests, hospital care, therapy services, and mental health treatment.
Individuals with incomes higher than 138% of the federal poverty level will be able to buy insurance coverage in a Health Insurance Marketplace in 2014.This Marketplace will allow people to compare insurance plans and choose a plan that meets their needs. “Navigators” will assist consumers with understanding and choosing plans.
People with incomes below 400% of the federal poverty level will receive help paying for their monthly insurance plan premiums. The federal government will send a subsidy payment directly to the person’s plan so that the premium cost is automatically lowered. People with incomes below 250% of the federal poverty level will also receive helpwith cost-sharing (deductibles and co-pays). Please note: You must buy a plan from the Marketplace to receive thisassistance.
The Affordable Care Act requires most people to maintain “minimum essential” insurance coverage. This means that nearly everyone will be required to have health insurance. Medicare, Medicaid, and employer coverage counts as having insurance. If someone chooses not to have insurance they will have to pay a penalty on their taxes.
However, some groups of people are exempt from this requirement. (This means they will not have to pay a penalty for not having insurance.) These groups include people who are incarcerated, religious objectors, Native Americans, people who go without coverage for less than 3 months, undocumented immigrants, and people with financial hardship.
What is considered financial hardship?
- People do not have to maintain insurance coverage if the cheapestplan in their area has premiums that cost more than 8% of their income.
- People with incomes below the tax filing threshold are also exempt.
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