You probably hear everyone talking about Obamacare — whether it’s on the news or in conversations with friends. Like most people, you probably have trouble following the politics. And like many other Americans, you also have trouble figuring out what Obamacare means for you and your family.
When it comes down to it, the Affordable Care Act, also known as Obamacare, has actually made joining health insurance more straightforward. Essentially, you can buy health insurance like you would buy an airline ticket — with the ability to search, compare and filter multiple options on an online portal.
But, while this process was built to make buying health insurance more clear, it can be confusing to figure out all the new rules that come along with it.
Here in this Affordable Care Act summary, we’re going to lay out everything you need to know about Obamacare. By answering your burning questions, we hope to give you a better understanding of not only how Obamacare works, but also how it affects you.
What is Obamacare?
Before we explain everything about Obamacare, it’s important to define what this law is. “Obamacare” is actually an unofficial nickname that’s used to refer to the Patient Protection and Affordable Care Act. This law is usually abbreviated as the “Affordable Care Act” or “ACA”.
The Affordable Care Act took effect starting in 2013. Since then, it has had a broad impact on health insurance plans across the United States. The ACA has affected everything from the type of coverage provided, to how and when plans are purchased, and even how much healthcare will cost.
Today, when people refer to their individual or family health insurance coverage (without getting it from an employer), they’re generally talking about an ACA plan. They could also be referring to an alternative plan, but we’ll get to those options later.
When the ACA was created, it essentially had three main parts that were meant to reduce the costs of healthcare in America.
1. The first ACA part was to standardize health insurance for patients. The ACA introduced easily understood features nationwide, like yearly enrollment periods. The ACA also set up a universal way to structure different plan levels — now, plans have titles like gold, silver and bronze.
This push to standardize healthcare also made it illegal for insurance companies to exclude someone with a pre-existing medical condition. This popular rule opened a path for everyone in the country to get health insurance.
2. The second part was that the ACA required everyone in the U.S. to have health insurance. This rule has since expired in most states. The reason this was originally put into law was to make sure that health insurance plans could afford to support more patients with pre-existing conditions.
So how does that requirement work? The idea was that if healthy people who didn’t need much care had to have health insurance, then their payments to the insurance companies could lower the costs for people with more health issues.
3. Finally, the Affordable Care Act provided discounts, called subsidies, to help all Americans afford the insurance they were now required to have.
Obamacare Changes After 2017
But, everything changed in 2017 when Congress repealed the rule that everyone in the country had to have health insurance. This made it harder for Obamacare to lower healthcare costs for Americans as a whole. It also lead some people to drop out of ACA healthcare plans altogether.
How To Buy Obamacare Coverage
You can buy your Obamacare health insurance directly through the healthcare marketplace each year during Open Enrollment Periods. There are also additional chances to join, called Special Enrollment Periods, that we will discuss below.
No matter when you are eligible to buy Obamacare, you can get it directly via the ACA marketplace, web-enabled brokers, or through licensed agents like HealthCare.com.
(What sets HealthCare.com apart is that we can show you options both on and off the ACA marketplace. This includes low-cost plans for people who aren’t eligible for subsidies. Ultimately, this gives you more choice.)
But no matter where you decide to buy your health insurance, there are some key things you need to keep in mind. We’ve come up with two checklists to help you get started.
Checklist: What You’ll Need To Buy Obamacare for the First Time
If you are changing health plans or applying for health insurance for the first time, use this checklist to gather everything you’ll need to buy Obamacare.
- Social Security numbers and birthdates for each applicant
- Income for all applicants. If you’re unsure about your income, you can look at things like your Federal W-2 form, recent pay stubs, or your previous year’s tax return.
- Policy numbers for each applicant’s current health insurance coverage
- Information about employer-sponsored health plans for you or your eligible family members, whether or not you are enrolled in this coverage
- Banking information to pay the first month’s premium
Checklist: What You Need to Re-Enroll In Your Obamacare Health Insurance
If you are already enrolled with a health insurance plan, it’s likely that it will automatically renew. You should know if your current health insurance plan is set for auto-renewal when you get a notice from your health insurance company. This notice will have updated monthly rates and basic details about the coming year.
Before your auto-renewal goes into effect, you should use this checklist to make sure you are properly set up for the next 12 months.
- Ask yourself if the plan you have still works for your and your family:
2. Be sure to report any income and household size changes to your health insurance provider if you receive subsidies. If you don’t do this, you may wind up owing the IRS money when you file your taxes. You could also lose out on a larger subsidy.
3. Remember that subsidies will automatically renew each year, unless new income documents you sent in don’t match your reported income when you originally applied.
Health Insurance Benefits Under Obamacare Coverage
Under the Affordable Care Act, there are ten essential health insurance benefits that have to be covered by all ACA health insurance plans. But, specific services under each of these categories can vary based on your states’ requirements. You can always find these listed clearly in the Summary of Benefits you get before joining a plan.
[bctt tweet=”Each and every #Obamacare plan includes the 10 Essential Health Benefits.” username=”HealthCareInc”]
There are also states that require additional coverage of more than what is on this list of mandatory essentials. If they are available, you will be able to find these listed in the plan summary too. These benefits are not usually paid in full, but your plan will help pay for them under its rules.
When it comes down to the essential 10 benefits provided by Obamacare, this is what you can always expect to find covered.
- Outpatient care without being admitted to a hospital
- Emergency services
- Hospitalizations like surgery and overnight stays
- Prescription drugs
- Laboratory services
- Pregnancy, maternity and newborn care
- Mental health and substance use disorder services
- Preventative and wellness services, as well as chronic disease management
- Rehabilitation services and devices, like those to help people with injuries, disabilities, and chronic conditions
- Pediatric services including oral and vision care
What Doesn’t Obamacare Cover?
For all of the benefits that Obamacare offers, it is not all-inclusive. Obamacare does not require coverage of vision or dental care for adults.
Another thing Obamacare does not cover are out-of-pocket costs up to your deductible amount. To give you an idea of the costs, this deductible can be up to $7,900 for individuals.
But, you can purchase additional, targeted health insurance to fill in the gaps in your insurance. Depending on which supplemental health insurance coverage you buy, it can help cover the cost of deductibles, unexpected healthcare needs and even dental and vision.
When Can Obamacare Health Insurance Be Purchased?
For a few months out of the year, you can automatically purchase an Obamacare health insurance plan without a special reason. This is called the Open Enrollment Period (OEP).
You can join a health insurance plan online, including through trusted and licensed third-party comparison sites like ours.
[bctt tweet=”Mark your calendar for ACA open enrollment, or #OEP, in November each year.” username=”HealthCareInc”]
The dates of OEP and how long it lasts can vary from state to state. But the Open Enrollment Period is always at the end of the year.
For example, the national Open Enrollment Period to buy health insurance for 2019 lasted from November 1, 2018 until December 15, 2018. In California, though, you could buy an ACA healthcare plan until January 15, 2019. This is because California passed an extension.
How To Buy Obamacare Health Insurance Any Time via Special Enrollment
There is always an exception to the rule, and that also applies to the ACA marketplace. To apply for Obamacare outside of the OEP, you have to have a Qualifying Life Event (QLE). Basic life changes, such as moving or changing jobs, count as a QLE that let you apply or reapply for health insurance coverage.
When you have a QLE at any point in the year, it automatically grants you a 60-day Special Enrollment Period to buy this new healthcare plan. In most cases, the Special Enrollment Period of 60 days starts the same day you experience a QLE. But, there are exceptions to this. For example, if you experience domestic violence, you can request a SEP during any time of the year.
Health Insurance Qualifying Life Events
- You get married
- You get divorced
- You have a baby or adopt a child
- The death of an individual living in your home reduces your reported household size
- You experience a change in household size that impacts what you report to the government for your household tax subsidy
- You have a change in income (either an increase or decrease) and need to report it to adjust your tax subsidy
- You have an increase in income and no longer qualify for Medicaid
- You lose your employer health insurance coverage
- Your health insurance plan cancels your coverage, even though you’ve paid your premiums
- Your COBRA coverage expires
- You turn 26 years old and can no longer stay on your parent’s healthcare plan
- You move to a different ZIP code
- You are released from jail
- You experience domestic abuse
- You are discharged from the Armed Forces
- When applying for health insurance, an error is made – either human or technical error – which results in you not obtaining coverage.
How Much Does Obamacare Cost?
Every Obamacare plan available on the marketplace varies in price. But, when you are in the ACA marketplace, you can browse and compare the price of different health insurance plans clearly and easily. This kind of overview allows you to choose the plan that is right for you and your budget.
What Does Obamacare Cost Month to Month?
- Bronze: covers 60 percent of your healthcare costs. Generally the cheapest premiums.
- Silver: covers 70 percent of your healthcare costs. The most commonly picked plan.
- Gold: covers 80 percent of your healthcare costs.
- Platinum: this plan has the highest premiums per month, but it will cover 90 percent of your healthcare costs. It may be hard to find a platinum plan.
To give you a real idea of what Americans are paying for Obamacare each month, a study from 2018 found that the average unsubsidized monthly premium was $477 per person. This is average is not the case for all states, plans or people.
For example, in Wyoming, an average silver plan cost $865 each month in 2018. But that same year in Minnesota, the average silver plan was $326 per month.
What Else Do I Have To Pay For With Obamacare?
You also need to factor in “deductibles” to the price of Obamacare. A deductible is the amount of money you pay for your healthcare before your health insurance plan will help cover medical costs.
For example: say you have a silver plan with a $1,000 deductible. That means you have to pay $1,000 out of pocket for healthcare services for that year before your plan pays 70 percent of in-network bills
So, how high can deductibles be? In 2019, deductibles cannot be set higher than $7,900 for an individual or $15,800 for a family.
Do You Have To Pay An Obamacare Penalty?
The short answer is probably not — as of January 1, 2019, the Obamacare penalty is no longer in effect in most states. But, you may have had to pay an Obamacare penalty in the past.
You see, before the law was repealed, it was required that all Americans be enrolled in a health insurance plan, with some exceptions. And generally, if you didn’t have health insurance through your workplace, you had to buy health insurance through the ACA Marketplace. If you were not enrolled in a health insurance plan, you were fined by the Internal Revenue Service.
To give you an idea of what the fine was like, for the 2017 and 2018 tax years, the penalty for not having health insurance was $695 per person and $347.50 per child, or, 2.5 percent of your total household income — whichever was greater. But like we mentioned above, this is not something you need to worry about anymore.
How ACA Subsidies Work — And Who Qualifies for Them
ACA subsidies are essentially discounts on your monthly health insurance payment — sometimes you will also hear them referred to as “premium tax credits”. But to qualify for an ACA subsidy, you have to fall between two groups of people.
- The first is people who made at least 100 percent of the federal poverty level the previous year. For the 2019 enrollment year, the minimum total household income for an ACA subsidy was $12,140 for 1 person, rising by about $4,320 for each additional person.
- The second group is people who didn’t make more than 400 percent of the federal poverty level the previous year. For the 2019 enrollment year, the maximum total household income for an ACA subsidy was $48,560 per person, rising by about $17,280 for each additional person.
How Much Can Subsidies Cover In Your Monthly Healthcare Plan?
It depends, but here’s an example. When looking at healthcare subsidies for people making 150 percent of the poverty level in 2018, healthcare analysts found that about 98 percent of counties across the United States had Bronze plans available with $0 monthly premiums, after subsidies.
Even if you qualify for a subsidy, you will still be asked to cover some portion of your medical care once you start using your health plan. However, subsidies could make your plan of choice free to join if you qualify.
If Your Income Is Too High or Too Low — Then What?
Anyone can get Obamacare, no matter how much money you make a year. But, if you make too much or too little compared to the federal poverty level, then you simply are not eligible for these monthly discounts. These are the two main categories people fall into here.
- Less Than 100 Percent of FPL: Some households actually make less than the 100 percent of the federal poverty level. If this is the case in your household, you are probably eligible for Medicaid. But this depends on your state’s rules. To learn more, it’s important to apply directly to your state’s Medicaid program.
- More Than 400 Percent of FPL: On the other end of the spectrum, there are households that make more than the 400 percent of the federal poverty level. If this is the case in your household, you can still buy health insurance but you won’t be eligible for subsidies. On the other hand, though, you can find off-marketplace insurance on sites like HealthCare.com which are generally identical to subsidy-eligible plans, except cheaper. Since these plans don’t have to subsidize other members, those who can afford the plans pay less. These kinds of plans are only available on non-federal websites.
Obamacare vs. Alternatives
There are a few main factors that determine if you should choose Obamacare or another health insurance plan alternative.
At the end of the day, your health insurance plan should provide you the coverage you need for a budget you feel comfortable with.
Obamacare Is Right For You If:
- You’re eligible for a tax subsidy that can substantially reduce your monthly health insurance bill
- You or a person needing coverage in your household has a pre-existing medical condition
- You will need to enroll during an Open Enrollment Period
- You have a Qualifying Life Event
With that being said, there are alternatives to Obamacare that are available outside the ACA marketplace. Here, we’re going to outline the alternatives so you can weigh whether they may be right for you and your household.
Some Alternative Options to Obamacare:
COBRA is a law that allows people who lose their jobs to stay on their former employer’s health insurance for up to 18 months. COBRA also allows spouses of former employees (even if the couple divorces) to retain coverage for up to 36 months. COBRA is often expensive, as you’ll pay your former employer’s portion of your healthcare plan costs.
- Temporary Health Insurance: Short-Term Health Insurance
Short-term health insurance plans are designed to provide a temporary safety net for people who are having an unexpected gap in health insurance. These plans last for 364 days or fewer (without extensions). Short-term health insurance plans are also designed to help people who may need health insurance because they recently lost their job or have aged out of their parent’s plan. Short-term health plans are typically cheaper than an ACA marketplace healthcare plan, but they don’t provide as much coverage.
- Health-Sharing or Faith-Based Health Insurance
A faith-based health plan technically isn’t a type of health insurance policy. Instead, it is an alternative to health insurance that allows members to share the costs of their medical bills with others in the group. These plans are a lot less less expensive than individual health insurance plans, but have religiously-oriented coverage restrictions. Health sharing plans also have a wide variety of doctor choice.
- Primary Care Membership or “Concierge Medicine”
Concierge medicine is primary care offered directly to patients and employers by a medical practice. Instead of paying a health insurance company, patients purchase Primary Care Memberships from their doctor for a contracted bundle of healthcare services. This membership typically costs between $60 and $100 per month. What’s included in the memberships varies. It’s typically a predetermined package of services that involve preventative care.
We hope this Affordable Care Act summary has helped you learn more about how Obamacare works, and how it can affect you and your household. It’s our goal to make wondering, ‘how does Obamacare affect me’ a thing of the past.