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How the Affordable Care Act (ACA) varies by state

Written by: Elizabeth Walker
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Published on September 7, 2022.

Since its inception in 2010, the Affordable Care Act (ACA) was designed to extend health insurance coverage and reduce financial risk for unexpected medical expenses for millions of uninsured adults.

The ACA did this in a number of ways, including expanding Medicaid services, creating the federal and state Marketplaces, preventing insurance companies from denying medical coverage due to pre-existing conditions, and requiring plans to cover a list of essential health benefits.

However, some aspects of the ACA may look different to those who reside in certain states. The state you live in can affect your health outcomes, insurance options, and plan accessibility. Below we’ll provide an overview of which parts of the ACA affect everyone and which depend on your state.

Shopping for Marketplace coverage? Find out how an individual plan can work with an ICHRA

Is the ACA available in all states?

All states are subject to certain aspects of the ACA. Before the ACA, the CDC estimated1 that there were 48 million uninsured adults in the U.S. But now, the ACA guarantees basic health coverage, making medical care available to all Americans—from healthy individuals to those with chronic illnesses—no matter what state they reside in.

The ACA had three primary goals:

  1. Make affordable medical coverage more accessible on the individual market.
  2. Expand Medicaid services to cover more adults.
  3. Reduce healthcare-related costs that affect both consumers and the federal government.

To meet these goals, the ACA mandated that all states set up a health insurance exchange or allow residents to purchase a plan on the federal Health Insurance Marketplace. The Marketplace lets individuals choose ACA-compliant coverage from a variety of insurers.

Additionally, all 50 states must participate in the federal Medicaid program—whether they decide to implement Medicaid expansion coverage or not.

How the ACA is the same in every state

1. Health insurance exchanges

Health insurance exchanges are the primary way uninsured adults shop for insurance in all states. Federal and state health insurance exchanges contain a competitive array of qualified health plans on the individual market.

Through these exchanges, individuals, families, and small businesses can register and enroll in healthcare plans to reduce financial risk of unexpected illnesses.

2. Individual mandate

Before 2017, the ACA required most people to obtain health insurance or pay a penalty. This was known as the individual mandate. However, starting in 2019, that requirement was repealed.

3. Premium tax credits

In every state, the health insurance exchanges must offer financial assistance in the form of premium tax credits to those who meet certain income requirements. The eligibility requirements for the subsidies are the same from state to state.

4. Metallic tiers of coverage

Regardless of state, all plans fall into one of four categories: Bronze, Silver, Gold, or Platinum. These four metal tiers adhere to a price structure that matches their medical coverage rates.

Generally, bronze and silver plans are best suited for young, relatively healthy individuals who don’t make frequent doctor visits. In contrast, gold and platinum plans are the best option for individuals with more medical needs.

5. Essential benefits

Insurance plans offered through the health insurance exchanges will cover a set of ten essential health benefits and will qualify as minimum essential coverage (MEC). Essential health benefits include healthcare items and services that all qualified plans on the individual market must cover.

Under the ACA, insurance companies aren’t allowed to provide medical coverage to only healthy individuals. Additionally, they can only vary premium rates based on age, region, and tobacco use.

If you have a pre-existing condition, your insurance company also can’t refuse to cover you or charge you more money. Therefore, your financial risk for managing a chronic condition is lower with insurance than being uninsured.

6. Open enrollment

The annual open enrollment period to enroll or change health insurance plans is the same for all states using the federal marketplace on healthcare.gov2. However, state marketplaces can differ for enrollment periods.

This period is typically from the beginning of November through mid-December. You can only shop for health insurance outside of open enrollment if you qualify for a special enrollment period during the year.

How the ACA varies by state

The ACA mandated the creation of a formal health exchange in each state, but each person's health insurance experience will differ depending on their state. Here are three key differences of the ACA from state-to-state:

1. How the health insurance exchange is run

Each state can design its own exchange, partner with the federal government, or default to the federally-run exchange.

For the 2022 and 2023 plan year:

  • 17 states and Washington D.C. have fully state-run Marketplaces
  • 24 states use the federal Marketplace
  • Three states have state-based Marketplaces but use the federal Marketplace for plan enrollment.
  • Six states have state-federal partnership Marketplaces
    • States with these types of Marketplaces are similar to states that fully use the federal Marketplace, but they include more state participation in management and enrollment.

As mentioned above, the open enrollment period generally runs from November 1 - December 15 for the federal Marketplace. But state Marketplaces are free to set their own deadline, as long as their period doesn’t end before December 15.

If your state uses the federal government exchange, then the exchange website for employees, employers, and brokers is healthcare.gov. If your state is running its own health insurance exchange, it will have its own website where you can purchase Marketplace coverage.

2. ACA Medicaid coverage expansion

Medicaid is an assistance program that provides health insurance coverage to roughly 72.5 million Americans3. Intended for low-income adults, uninsured individuals in all states can qualify for Medicaid services based on income, household size, disability, family status, and other factors. However, specific eligibility rules can vary between states.

To qualify for ACA Medicaid services, your income must reach an annual limit of no more than 138% of the federal poverty level (FPL). Initially, the ACA required all states to expand their Medicaid program4. But in 2012, the Supreme Court left the decision to provide Medicaid expansion coverage up to the individual states.

As of 2022, 39 states (including D.C.) have adopted the Medicaid expansion. In states that have expanded Medicaid services, low-income adults can qualify for Medicaid if their household income is below 133% of the FPL.

If your state doesn’t have expansion coverage, your household income is less than the federal poverty level, and you don't qualify for Medicaid services under your state's rules, you won’t qualify for ACA Medicaid services.

3. Health plan availability and cost

The availability and cost of a qualified health plan on the individual insurance market also varies by state. This is because each state has different regional populations and demographics, varying their providers and plan options.

The prices of ACA-compliant coverage and other out-of-pocket costs will differ depending on which state you live in and even which region of your state you live in. Factors will include your age, location, and health plan selection.

For example, per federal guidelines, insurance companies can’t increase an individual’s overall premium above three times the base rate for the oldest individuals in their state. But states can choose to lessen the gap even more between the premiums paid by the youngest and oldest people in their state.

Many states have sample medical coverage exchange rates available, and all states will have final qualified health plan rates available for comparison during enrollment.

Conclusion

The ACA set out to provide health insurance to more uninsured adults across the country, regardless of their income, state, or health status. However, premium costs, expanded Medicaid services, and plan availability may differ from state to state.

When considering health insurance, it’s important to know how your state ranks against the rest of the country regarding cost and access to coverage. Through careful research, you’ll have a greater understanding of where each state stands and how regulations in your state impact the health outcomes of its residents.

This article was originally published on September 23, 2013. It was last updated on September 7, 2022.

1https://aspe.hhs.gov/sites/default/files/private/pdf/265041/trends-in-the-us-uninsured.pdf

2https://www.healthcare.gov/

3https://www.medicaid.gov/medicaid/eligibility/index.html

4https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/

Originally published on September 7, 2022. Last updated September 7, 2022.
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