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According to the U.S. Census Bureau, about 50 million Americans are without health insurance. To help the uninsured find quality health insurance at a reasonable cost, in 2010 the Patient Protection and Affordable Care Act (ACA) was passed and signed into law. Today America's uninsured have more opportunity than ever to obtain quality health care coverage.
The uninsured now have access to purchase health insurance through a health insurance marketplace, often referred to as an exchange. Many states have opted to run their own exchanges to insure their citizens. Other states have left it up to the federal government to offer an exchange. The exchanges allow shoppers to compare health insurance policies side by side and help them make an informed purchase.
In addition to creating exchanges to help the uninsured purchase health insurance, there are many other benefits to Americans under the new law. No longer can people be turned down for health coverage because of preexisting conditions including pregnancy or diabetes. Young adults up to 26 years old can now continue health coverage under a parent's plan. Prescription drug prices will be much, much lower for seniors.
Eighty percent of what policyholders pay to health insurance companies for coverage must be used for patient care. Only 20 percent is allowed to go toward profit and administrative costs. If health insurance companies do not spend at least 80 percent of the money they collect from policyholders on patients, they must send a rebate for the difference.
Medicaid significantly expanded. Medicaid is the national health insurance program established in 1965 for people of low incomes. Now almost everyone under 65 with a family income up to 133 percent of the Federal Poverty Level (about $30,500 for a family of four in 2012) will qualify. Those people account for almost half of America's uninsured.
While small businesses with under 50 employees are not required to offer health insurance plans, they are encouraged to do so through tax credit incentives. Businesses with 50 full-time employees or more will be required to offer health insurance or be subject to a tax penalty.
At the core of the Affordable Care Act is the mandate that everyone must have health insurance. To enforce this, those who choose not to have health insurance will be subject to a tax penalty. If the mandate and tax penalty didn't exist, individuals could simply wait until they get sick to purchase and use health insurance. In this scenario, health care costs would skyrocket. The mandate and tax penalty also help spread health care costs out over the healthy and unhealthy. The tax penalty is $95 per adult or one percent of family income, whichever is greater. By 2016, the tax penalty will be $695 per adult or 2.5 percent of family income, whichever is greater. There are several exceptions to the tax penalty including earning below certain income levels.
To learn more about the Affordable Care Act and how it affects you, visit healthcare.gov or one of the local or national resources above.