Skip to main content

«  View All Posts

3 Frequently Asked Questions About the ACA

October 16th, 2023 | 3 min. read

By Patrick Sanders

How often have you felt confused or overwhelmed by the Affordable Care Act (ACA)? I have. And I’m sure there are more people too. The ACA has been a hot topic since its creation, and it's easy to get lost in the jargon and legalities. 


As experts in the field of healthcare and insurance, Payday HCM understands the details of the ACA and how this legislation can impact your business. In this article, we’ve collected three of the most asked questions from our clients regarding the ACA. 


We’ll help you through some of these questions and break them down about the ACA. Payday HCM will offer clear and concise answers to help you navigate this important but often confusing legislation. By the end of the article, you’ll learn:


  • What is the ACA?
  • How Does the ACA Affect Insurance Plans?
  • Controversial Issues Surrounding the ACA


1: What is the ACA?

The ACA, often called “Obamacare,” is a healthcare reform law enacted in 2010. Its primary objective is to make health insurance more affordable and accessible for Americans. The ACA introduced a range of provisions expanding Medicaid, protecting patients with pre-existing conditions, and requiring most individuals to have some form of health insurance.


Key Features

The ACA's key features include the creation of health insurance marketplaces, also known as exchanges. These marketplaces serve as platforms to compare and purchase health insurance plans. Another significant aspect is the expansion of Medicaid, which allows more low-income individuals to qualify for healthcare coverage. Larger employers are mandated to offer their employees coverage that is affordable, provides minimum essential coverage and meets minimum value requirements to 95% of their full-time employees or be subject to penalties. 


Preventive Care and Quality Improvement

The ACA also places a strong emphasis on preventive care. It requires insurance plans to cover preventive services, like vaccinations and screenings, at no extra cost to the insured. This is part of an effort to improve the quality of healthcare services. By focusing on prevention, the ACA aims to reduce the long-term costs associated with treating chronic conditions that could have been avoided.

2:  How Does the ACA Affect Insurance Plans?

Coverage and Benefits

One of the primary goals of the ACA is to improve the quality of health insurance plans. This means requiring plans to cover essential health benefits like emergency services, maternity care, and preventive services. These significant benefits are somewhat standardized, ensuring that particular basic healthcare needs will be met regardless of your chosen plan. This is a substantial change from the pre-ACA era, where insurance plans could exclude these essential services.


Costs and Premiums

The ACA also aims to make health insurance more affordable for Americans. It introduced subsidies for low and middle-income individuals to help them pay for insurance premiums. In New Mexico, the average premium subsidy is about $475 monthly. These subsidies are often provided as tax credits and are designed to make healthcare more accessible.  Some people, particularly those who don't qualify for assistance, have seen their premiums increase, which has been a point of debate regarding the ACA.


Consumer Protections

Another critical aspect of how the ACA affects insurance plans is through consumer protections. Insurance companies can no longer deny coverage based on pre-existing conditions, nor can they impose lifetime or annual limits on essential health benefits. This has provided a safety net for many individuals who might have struggled to find coverage otherwise. These protections aim to create a more equitable healthcare system where access to essential healthcare services is not determined by one's medical history or financial status.

3: Are There Any Issues About the ACA?

Major Objections

The ACA has faced various challenges and criticisms since its creation. One of the major objections is the individual mandate, which requires most Americans to have health insurance or pay a penalty. Critics argue that this infringes on individual freedom and goes against the principles of personal choice. The mandate has been one of the most hotly debated aspects of the ACA and has even been the subject of legal challenges.


Current Challenges

Legal challenges have also been a significant issue for the ACA. Various aspects of the law have been brought to court, including its constitutionality. In some cases, these legal battles have led to changes in the ACA's implementation, adding another layer of complexity to an already intricate law. These challenges also create uncertainty for consumers who rely on the ACA for their healthcare coverage.


Political Divide

The ACA has also been a point of political contention. This political divide has led to a need for more consensus on how to address the ACA's shortcomings, making it a contentious issue in every election cycle. The ridge is not just among politicians but also reflects a broader societal split on how healthcare should be managed in the United States.


Make Your Next Move

Let's revisit the essence of this article: the ACA is a piece of legislation that has far-reaching implications for healthcare in America. From its essential features to its impact on insurance plans and the controversies it has sparked, understanding the ACA is vital for anyone concerned about healthcare.


Sure — it has its share of challenges and criticisms, but it also offers significant benefits like expanded coverage and consumer protections. While the debates and legal battles may continue, the ACA remains a cornerstone of American healthcare. Being informed about its various aspects allows you to navigate the healthcare system better and make more educated decisions for yourself and your business.

Now that you have the essential information on the ACA, it’s time to make your next move. To know about different benefits packages, read the difference between HMOs and PPOs. Needing to figure out what makes a good benefits broker? Read Difference Between Good and Great Benefits Brokers.

Patrick Sanders

Patrick has worked for Payday HCM since 2012, with a career that has spanned multiple responsibilities in the sales arena. He now maintains a 300+ client portfolio with a 98% retention rate. Patrick works diligently to determine the optimal utilization of our software, manages ongoing quality assurance, and brings best practices to Payday HCM’s clients. Patrick graduated with a Bachelor's in Business Administration, with a concentration in Finance, from the Anderson School of Management at the University of New Mexico. Having spent the decade since graduating meeting and partnering with entrepreneurs throughout New Mexico, Patrick firmly believes Payday HCM brings national Fortune-500 level service and technology to the New Mexico marketplace.