What Is The Affordable Care Act (Obamacare)?

Lena Muhtadi Borrelli is a seasoned insurance writer with several years of experience writing as an authority for respected financial sites such as Forbes, Time, Newsweek, Bankrate, CNET, Investopedia and Insurance.com. She is a financial expert who.

Lena Muhtadi Borrelli is a seasoned insurance writer with several years of experience writing as an authority for respected financial sites such as Forbes, Time, Newsweek, Bankrate, CNET, Investopedia and Insurance.com. She is a financial expert who.

Lena Muhtadi Borrelli is a seasoned insurance writer with several years of experience writing as an authority for respected financial sites such as Forbes, Time, Newsweek, Bankrate, CNET, Investopedia and Insurance.com. She is a financial expert who.

Lena Muhtadi Borrelli is a seasoned insurance writer with several years of experience writing as an authority for respected financial sites such as Forbes, Time, Newsweek, Bankrate, CNET, Investopedia and Insurance.com. She is a financial expert who.

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

| Lead Editor, Insurance

Updated: Feb 15, 2024, 5:05am

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The Affordable Care Act (ACA) made a splash when it landed in 2010, making more health insurance a reality for millions of uninsured Americans.

Known colloquially as Obamacare, the ACA helps to provide low-income households with affordable health insurance, so they’re not forced to go without if sky-high premiums exceed their budgets.

What Is the Affordable Care Act?

The Affordable Care Act is known by a few names:

• ACA
• The more formal Patient Protection and Affordable Care Act
• Obamacare
• The amended Health Care and Education Reconciliation Act

Enacted in 2010 and created under the Obama administration, the health insurance legislation goes well beyond a health insurance marketplace (at HealthCare.gov) and providing a health insurance option to people who can’t get coverage through an employer.

The Affordable Care doesn’t allow health insurance companies to deny coverage because of pre-existing conditions or base costs on your health.

The ACA exchanges offer subsidies based on income that help cut health insurance costs for Americans who qualify. The ACA also allows states to expand Medicaid to more people by lowering income requirements to get coverage.

The ACA also features multiple other provisions, including:

• Prohibits lifetime monetary caps on health insurance plans.
• Forbids insurers from canceling health insurance unless there’s fraud.
• Doesn’t allow health insurers to deny coverage because of preexisting conditions.
• Requires that insurers use at least a minimum percentage of premiums to pay for members’ medical services.
• Allows parents to keep children on their health insurance until the age of 26.

How Does Obamacare Work?

The ACA helps people get health insurance who may not otherwise get coverage because of lack of workplace health insurance, their finances or preexisting conditions.

People who have household incomes between 100% and 400% of the federal poverty level can receive premium tax credits to lower health care costs and make critical procedures and medications available.

Here’s 400% of the federal poverty level by family size in 2023.

400% of the federal poverty level

California additionally expanded tax credit eligibility to those up to 600% of the federal poverty level. Most states also expanded Medicaid, allowing more people to qualify for low-cost health insurance.

Who Qualifies for Obamacare?

To qualify for Obamacare you must meet these requirements:

• Live in the U.S.
• Be a U.S. citizen or national
• Not incarcerated

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What Does Obamacare Cover?

ACA plans must cover these 10 essential health benefits, at a minimum:

• Ambulatory patient/outpatient services
• Emergency services
• Hospitalization
• Laboratory services
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Pediatric services, including oral and vision care for children
• Prescription drugs
• Preventive and wellness services and chronic disease management
• Rehabilitative and habilitative services and devices

The ACA requires health insurance companies to accept all applications for coverage. They can’t deny you based on pre-existing conditions and can’t charge more based on your health. Before Obamacare became law, health insurance companies could reject you for individual health insurance coverage or charge exorbitant rates if you had pre-existing conditions, which made it difficult for someone with health issues to find affordable individual health insurance.

The ACA does allow health insurance plans to base Obamacare costs partially on age. For instance, a 30-year-old pays $412 monthly on average for an unsubsidized ACA plan. That’s compared to $469 for a 40-year-old, $655 for a 50-year-old and $994 for a 60-year-old.

The health law also lets parents keep their children on their health plans until the children turn 26. They don’t have to live with you and they can be married but still be on your health plan.

Pros and Cons of Obamacare

The ACA expanded health insurance to millions of Americans and implemented vital coverage protections, but Obamacare does have drawbacks, namely it’s costs if you don’t qualify for tax credits and subsidies.

Pros

• Comprehensive coverage that includes physicals, doctor appointments, vaccinations, surgeries, outpatient services and emergency care.
• Plans can’t deny you or charge higher rates based on your health.
• You can review health plans in your area and compare costs and coverages in one place rather than track down the information.
• ACA are the only health plans that provide premium tax credits and cost-saving subsidies based on your household income and size, which can decrease your costs.
• No coverage limits and out-of-pocket maximums mean you don’t have to worry that a health plan will stop covering you if you rack up medical bills.
• Parents can keep their children on a health plan until a child turns 26.
• Young children are eligible for vision and dental care coverage.

Cons

• ACA plans are generally more expensive than other types of coverage, including group health insurance through an employer.
• You may have a limited number of health plan options depending on where you live.
• Some ACA health plans require that you get care only from in-network providers, which could be a problem if you sign up for a plan with a small provider network in your area.
• You can only sign up or make changes to an ACA plan during open enrollment unless you qualify for a special enrollment period.

How Can I Get Obamacare?

There are several ways to get Obamacare.

• Apply online. Create an account on HealthCare.gov and use the tools to find the best affordable health insurance plan for your family.
• Apply by phone. Call the Marketplace Call Center at 1-800-318-2596 for guidance and to enroll by phone.
• Apply by mail. When you mail a paper application, you can receive results within two weeks.
• Find an agent or broker. You can enter your ZIP code and find local help through the HealthCare.gov website.
• Use a partner. You can both apply and enroll in a new ACA healthcare plan when you use a certified enrollment partner, such as a health insurance company.

How Does the Affordable Care Act Make Health Insurance Cheaper?

The use of premium tax credits (PTCs) helps families pay for health insurance purchased via the health insurance marketplace. Only certain individuals qualify for the premium tax credit and must complete Form 8962 with their tax returns.

Requirements to qualify for premium tax credits can include:

• Low household income or receive unemployment
• Tax filing status other than Married Filing Separately
• Be a victim of certain domestic abuse and spousal abandonment
• Not claimed as a dependent by another person
• Unable to get health insurance coverage via an employee-sponsored plan
• Not eligible for coverage through a federal program, such as Medicaid, Medicare or TRICARE

What Are the Types of ACA Health Insurance Plans?

There are four different “metal levels” of health insurance plans under the Affordable Care Act:

Each metal tier has different costs. Your exact costs vary by insurance company, where you live and other personal factors, such as your age.

Bronze and Silver plans have the cheapest premiums but higher out-of-pocket costs. Gold and Platinum have higher health insurance premiums, but you pay less when you need health care services.

Bronze and Silver make up the vast majority of ACA plans, with few Platinum plans offered.

These are the average copays for Obamacare health insurance plans.

You can determine which type of health insurance plan is best for you based on considerations like the coverage you choose, your ZIP code and your budget.

When Is Open Enrollment for ACA Plans?

Open enrollment begins every year on November 1 and ends on January 15 in most states for ACA marketplace plans. Some states with their own state exchanges, such as California and New York, may have longer open enrollment periods.

During open enrollment, you can choose or change an ACA plan. Health plan offerings and costs often change each year, so it’s wise to compare your options annually to see if you can get better coverage for a cheaper price.

The federal government and states announce their open enrollment periods in the fall.

When Else Can You Sign Up for an ACA Plan?

One of the biggest questions that people have is how to get health insurance, especially when it comes to Obamacare.

There are certain instances when you may be able to sign up for Obamacare outside the yearly open enrollment period. Qualifying life events for life insurance allow you to get a special enrollment period when you can sign up for ACA health insurance outside open enrollment.

This can include having a baby, getting married or losing your current health insurance coverage. You also may be able to enroll early based on your estimated household income.

Some types of public health insurance don’t have open enrollment periods, so you can sign up for that coverage any time of year, as long as you qualify. This includes Medicaid, which bases eligibility on income and situation. For instance, states have income requirements, but may be more flexible with eligibility for children or pregnant women.

The Children’s Health Insurance Program (CHIP) is another health program for low-income Americans. CHIP doesn’t have open enrollment periods, so you can sign up any time of the year, if you’re eligible.

When Else Can You Sign Up for an ACA Plan?

One of the biggest questions that people have is how to get health insurance, especially when it comes to Obamacare.

There are certain instances when you may be able to sign up for Obamacare outside the yearly open enrollment period. Qualifying life events for life insurance allow you to get a special enrollment period when you can sign up for ACA health insurance outside open enrollment.

This can include having a baby, getting married or losing your current health insurance coverage. You also may be able to enroll early based on your estimated household income.

Some types of public health insurance don’t have open enrollment periods, so you can sign up for that coverage any time of year, as long as you qualify. This includes Medicaid, which bases eligibility on income and situation. For instance, states have income requirements, but may be more flexible with eligibility for children or pregnant women.

The Children’s Health Insurance Program (CHIP) is another health program for low-income Americans. CHIP doesn’t have open enrollment periods, so you can sign up any time of the year, if you’re eligible.

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