In this post, the second in a series about the Affordable Care Act and its impact on Americans’ lives and wallets, I’m going to talk a little bit about the bright side of this legislation. While everyone is different, personal, medical and financial circumstances will have a significant effect on how this new law affects individuals. In many aspects, families, retirees and existing policyholders have reason to smile.
First of all, the law addresses the fact that the current structure of our healthcare system is predicated on employment, followed by access to Medicare at age 65. This creates a problem, of course, for anyone who retires early. Those in this not-uncommon situation have to search out an individual policy, hope they qualify and pay high premiums to maintain coverage. Starting in 2014, however, Affordable Insurance Exchanges will help level the playing field and make the individual purchase of health insurance both easier and more affordable.
Another positive aspect of the Affordable Care Act is the way that it curbs the most egregious abuses of insurance companies and introduces a number of well-intentioned consumer protections. The act makes it illegal to discriminate against applicants based on preexisting conditions, and adds something called an Essential Health Benefit: a mandate that new health plans include a comprehensive scope of essential coverage that covers ambulatory and emergency patient services, mental health issues, prescriptions and medication, chronic disease management, maternity care, and a wide range of other basic services. On the financial side of the ledger, it’s noteworthy that medical expense deduction caps will go up from the current 7.5% to 10% for filers under 65 years old. Look for more in subsequent posts about the positive implications for Medicare, but also the burdens from the darker side of the act—it’s enormous price tag.