How does Obama Health Care Work?

The Patient Protection and Affordable Care Act (ACA), also called Obamacare, is a major healthcare reform signed into law by President Barack Obama in March 2010. The act substantially overhauled the US healthcare system, making health insurance more accessible to millions of uninsured Americans.

Despite being around for over a decade, many Americans are unclear about how the ACA works. Today’s post will give you a quick overview of how Obamacare works to help you understand.

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What Exactly is the Affordable Care Act?

Commonly called Obamacare, the ACA is a health insurance legislation that goes beyond the health insurance marketplace, offering health insurance options for people who cannot get coverage through employers. The act also allows people with lower incomes to qualify for adequate coverage. It includes several other provisions that protect Americans from exploitation by the health insurance industry, including:

• Eliminating lifetime monetary caps on health insurance plans.
• Forbidding insurance companies from canceling health insurance unless there’s fraud.
• Prohibiting insurance companies from denying coverage due to preexisting conditions.
• It allows parents to keep children on their insurance until they turn 26.
• It mandates that insurance companies use a predetermined percentage of premiums to pay for their members’ medical services.

How Does Obamacare Work?

The ACA was designed to make healthcare more affordable for people who were uninsured due to a lack of available workplace insurance, inadequate income to afford health insurance, or those unable to get insurance due to preexisting health conditions. With the advent of Obamacare, consumers with incomes between 100% to 400% of the federal poverty level can receive tax credits on premiums to significantly reduce healthcare costs.

Who is Eligible for Subsidies Under Obamacare?

Qualifying for the Affordable Care Act comes with a few prerequisites, including:

• You must live in the US.
• You must be a US citizen or a US national or be in the country lawfully.
• You must not be an incarcerated individual.

How Does Obamacare Make Health Insurance More Affordable?

Obamacare uses premium tax credits to help families pay for health insurance they have purchased through the health insurance marketplace in the US. However, not everybody is eligible to receive these premium tax credits. Individuals must meet a set of conditions to qualify for the tax credit and complete Form 8962 with their tax returns.

The requirements to become eligible for the tax credits include:

• The individual belongs to a low-income household or is receiving unemployment benefits.

• The person is a victim of spousal abandonment or certain domestic abuse.

• The person is not claimed as a dependent by another individual.

• The individual cannot get employee-sponsored health insurance.

• The person is ineligible for health insurance coverage through federal programs like Medicaid and Medicare.

Types of Obamacare Health Insurance Plans

Several levels of health insurance plans are available under the ACA, namely, Bronze, Silver, Gold, and Platinum. The different ACA health insurance tiers vary in costs for monthly premiums and out-of-pocket costs.

For instance, Bronze and Silver health insurance plans under Obamacare come with low monthly premiums, but you have to pay more out-of-pocket when using your insurance. Similarly, Gold health insurance plans and Platinum health insurance plans might cost more in their premiums but offer significantly reduced out-of-pocket expenses when you need coverage.
We highly recommend speaking with expert insurance agents when considering your options for ACA health insurance plans to get the best possible plan suited to your needs and budget. We hope you found this post helpful. Keep following our blog to read more posts that give you insight into the Affordable Care Act.