May 24, 2019

What is an ACA compliant Health Insurance Plan and why is it so expensive?

ACA stands for Affordable Care Act. The Affordable Care Act is a comprehensive health care reform law enacted in 2010. It is sometimes called Obamacare. The ACA required non-grandfathered health plans in the individual and small group markets to cover 10 essential benefits:

1.Ambulatory Patient Services

2.Emergency Services

3. Hospitalization

4. Maternity & Newborn Care

5. Mental Health & Substance Abuse

6. Prescription Drugs

7. Rehabilitative & Habilitative services

8. Laboratory Services

9. Preventative & Wellness & Chronic Disease Services

10. Pediatric services including oral & vision care

ACA Plans allow any citizen to purchase an ACA compliant plan through their employer or on the exchange regardless of their current health situation and will cover any and all pre existing conditions. Also, ACA plans have no coverage limits on how much the insurance will pay. In other words, ACA plans must cover any citizen no matter how sick and has no cap on amount it must pay for consumers healthcare.

Additionally, ACA plans purchased on the exchange can also get government provided subsidies/credits to help pay for the insurance coverage. The amount of subsidies/credits are based on customers predicted income for the coming year.

ACA plans are a great choice for consumers with chronic health problems, serious pre existing conditions, and people needing maternity and newborn medical coverage. It can also be a great choice for consumers that qualify for a significant subsidy/credit to greatly reduce the cost of the insurance.

One major downside of ACA plans can be the cost to those consumers that do not receive a subsidy/credit to help pay the premiums. In many cases monthly premiums can range between $1,000 to $2,000 per month for ACA plans for a family of four that do not qualify for a subsidy/credit. This high cost can be particularly frustrating to relatively healthy customers that may not need some of the required essential coverages such as maternity/newborn care, substance abuse, and/or mental health benefits.

Good news is that now there are more affordable NON ACA plans available for these relatively healthy people with no serious pre existing conditions that don’t need maternity, substance abuse, and mental health benefits. Another plus is that there is no longer a federal penalty for not purchasing a NON ACA plan.

Non ACA plans are not perfect for everyone. But, if they meet your needs then it can potentially save you thousands of dollars per year!

Blair Beaty

Written by:
Blair Beaty, Health Insurance Specialist