Affordable Care Act (ACA): What You Should Know (2024)

Did you know that the Affordable Care Act (ACA) and Obamacare were the same thing? It’s worth noting since a third of those responding to a recent New York Times survey thought they were two separate things.

So, what’s the ACA? Here’s Obamacare explained in a nutshell: The law created in 2010 has revolutionized healthcare in the United States by introducing crucial reforms and making coverage more accessible.

This article, delves into the key topics surrounding the ACA, including coverage for preexisting conditions, the elimination of dollar limits on essential healthcare, extended coverage for young adults, and the goal of making healthcare affordable for all.

To ensure you have the right coverage, take the next step and enter your ZIP code now. Compare rates from top insurance providers and seize the benefits of the Affordable Care Act for a healthier future.

What are three benefits of the Affordable Care Act? The ACA in the U.S., providing greater access to care as a result of being insured, has been shown to reduce mortality, improve mental health, and improve self-reported health status.

Your Rights Under the ACA

Approximately 1 out of every 12 Americans, including children, have a preexisting condition which has been excluded by major health insurance plans. One of the most popular aspects of the healthcare overhaul is that even the best comprehensive healthcare companies are not allowed to exclude people from coverage based on preexisting conditions.

This portion of the law became mandatory on January 1, 2014, but some insurance companies are already taking it to heart, so you may be able to get coverage even sooner.

Another aspect of the law that became mandatory in 2014 is the abolishment of dollar limits on essential health care. Currently, approximately 105 million Americans, or more than 1 in 4 people, have either reached the treatment limits of the policies or have policies with such limits in place.

Under traditional health insurance, your coverage could be terminated due to a minor mistake on your application, such as entering an incorrect age or birth date. The ACA prevents insurance companies from canceling your policy due to such errors. Deliberately entering false information is still considered fraud and could be prosecuted. See our related articles Do I need to tell my health insurance company if I only smoke a few times per year? and How Social Media Could Impact Your Insurance.

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Making Health Care Affordable

The Affordable Care Act includes what is referred to as the 80/20 rule, which is intended to reduce health insurance costs, and may even result in refunds for some currently insured people. Insurance companies will be required to invest at least 80% of the premiums they collect into healthcare, leaving 20% of premiums to be used for overhead. Refunds began in mid-2012.

Until the ACA was passed, there has never been any regulations which required insurance companies to provide justification before raising your rates. Under the law, rates can’t be increased by 10% or more without providing policyholders with justification for the increase.

Traditionally, a small business might pay as much as 18% more for a health insurance plan than a large corporation. By offering tax credits to small businesses who provide health insurance plans to employees, the ACA should be able to make health insurance available to millions of workers. This aspect of the law has already gone into effect. See our related articles What is small-group health insurance? and What is employer shared-responsibility payment?

ACA Plans

There are four health plan categories available in the marketplace.

Read more: What is health insurance marketplace?

The categories are named Bronze, Gold, Silver, and Platinum, and they designate how you and your health plan split the costs of your health care.

Here’s a look at the cost percentages:

Marketplace Plan Percentages

ACA Costs

How much is Obamacare a month for a single person?

Obamacare costs an average of $584 per month for a 40-year-old with a Silver plan. Your age affects your monthly rates. A 20-year-old pays an average of $443 per month for a Silver plan, while a 60-year-old pays an average of $1,240 per month, before subsidies.

What is the highest income to qualify for Obamacare in 2024?

The income range is $30,000-$120,000 in 2024 for a family of four. Note that income limits may be higher in Alaska and Hawaii since the federal poverty level is higher there.

See this video for details regarding enrollment:

Increased Access to Health Care

Along with requiring insurers to provide coverage for preexisting conditions, the new laws also require insurers to allow young adults to remain on the policy of their parents for a longer period of time. The new law extends the age to 26. This change has already gone into effect, and has increased coverage for more than 3 million young adults.

Under the ACA, preventive services for many things are now covered, including screening for cancer and diabetes. This portion of the law also eliminates copays and coinsurance on covered preventive procedures, and has already affected about 1 in 6 Americans.

To make health insurance easier to get, the ACA includes the formation of health insurance exchanges in each state, either sponsored by the state or by the federal government. These exchanges are described as a one stop place to find insurance, information or customer assistance. The law was not mandatory until 2014, but more than half of the states had already begun setting up health insurance exchanges before that.

Improving Government Programs

Government programs such as Medicare and Medicaid have also seen some improvements under the ACA. This portion of the law first went into effect in 2010, with the full extent of it effective as of 2020. Reducing the cost of prescription drugs for seniors was the first priority, first by issuing refunds and implementing discounts for seniors who were in the group affected by what is known as the “donut hole.”

Read more: Government Mandated Car Insurance Discount for Seniors

Additionally, preventive services for those receiving Medicare and Medicaid are be free, as described above. An annual wellness visit is included in the plan to allow seniors to be examined for continuing health status each year.

And to increase the quality of care available, a new office was established, called the Center for Medicare and Medicaid Innovation. This office uses advances in technology and processing to reduce fraud, increase patient reach, and improve the level of care available to seniors and others.

Read more:

• What is Medicaid expansion?
• What is Medicaid work requirement?

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The ACA Upheld Meaning

The Supreme Court has upheld the ACA three times, in 2012, 2015, and 2021.

What does upheld mean? That a decision that has already been made is correct. So the Supreme Court has allowed legislation to stand for the law that, while signed in 2010, called for comprehensive health insurance reforms rolling out over four years and beyond.

Here is some information about what the ACA means to you since the bill has been upheld:

One of the first parts of the law, which requires health insurance companies to allow dependents up to the age of 26 to remain on the coverage of their parents, has already gone into effect. This change makes it possible for millions of adults to immediately have access to healthcare that they would otherwise have lost solely because of their age.

In 2014, the next stage of the bill went into effect, and that provision will prevent insurance companies from denying coverage to millions more Americans who suffer from preexisting conditions.

Under the previous laws, private insurance could deny coverage if you had, for example, asthma or diabetes. By 2014, insurance companies could no longer be able to do that, and many insurance companies had already begun adopting the new regulations before that date.

A common misconception about the ACA was that it was going to wreak havoc on those who already have health insurance. The healthcare bill was designed to make health insurance coverage available to an estimated 32 million people who can’t currently get insurance or can’t afford to pay for it.

Read more: Individual Health Insurance: A Complete Guide

If you already had a health insurance policy in force, you would’ve seen little or no changes at all, and your policy will continue to function in almost the same way that it always has.

Up until 2019, for those who didn’t have health insurance, the law required all citizens to enroll in a health insurance plan, or pay a penalty tax for remaining uninsured. Those who can’t afford to pay for health insurance, even under the new system, are eligible for vouchers or other subsidies that entitle them to a minimum level of medical care.

The bill is intended to make it possible for all Americans to receive minimal preventative and medical care at a fair price so that everyone can get health insurance.

Despite the fact that opponents of the healthcare reform say the law will increase the costs of medical care for Americans, the law is actually designed to not only restrict the growth of health care costs, it is meant to reduce the federal deficit over the next 10 years by more than $140 billion dollars.

The law does not eliminate Medicare or Medicaid, but it does enhance them and other facets of the health insurance industry.

The taxation which has caused such an uproar over this legislation is intended to transfer much of the burden of health insurance to employers and insurance companies, and won’t affect those who make less than $250,000 a year, which is a very small percentage of the population.

The idea is that these people can afford to pay a minimal tax and as Americans are obligated to participate in helping restore our nation’s position as a world leader by providing assistance to those who are less fortunate. Only a small percentage of the American population will be affected by this tax, and of those, the tax will be so small that it won’t create any type of financial problem.

Advantages of the Affordable Care Act Upheld

The U.S. Department of Health and Human Services has overviewed five of ACA’s benefits:

Here’s a bit more detail:

Dependent Coverage for Adults up to Age 26

One of the key provisions of the Health Care Bill that has already gone into effect is the requirement for health insurance companies to allow dependents up to the age of 26 to remain on the coverage of their parents. This change has provided millions of adults immediate access to healthcare that they would have otherwise lost solely due to their age.

Read more: How much is health insurance for a 27-year-old female?

Protection for Individuals with Preexisting Conditions

By 2014, the Health Care Bill prevented insurance companies from denying coverage to millions of Americans with preexisting conditions. Under the previous laws, private insurance could deny coverage based on conditions such as asthma or diabetes. With the new regulations, insurance companies will no longer be able to do that, and many have already started adopting the changes.

Expansion of Health Insurance Coverage

Contrary to misconceptions, the ACA aims to make health insurance coverage available to an estimated 32 million people who currently can’t obtain insurance or afford it. If you already have a health insurance policy in force, you will experience little to no changes, and your policy will continue to function similarly.

Individual Mandate and Financial Assistance

Up until 2019 through the Tax Cuts and Jobs Act, the law had required all citizens to enroll in a health insurance plan or pay a penalty tax for remaining uninsured. However, those who can’t afford health insurance, even under the new system, are eligible for vouchers or subsidies that provide them with a minimum level of medical care. The goal is to ensure that all Americans can receive essential preventative and medical care at a fair price.

Cost Control and Deficit Reduction

Despite concerns about increased healthcare costs, the Health Care Bill is designed to restrict the growth of healthcare expenses and reduce the federal deficit by over $140 billion dollars over the next 10 years. The law also enhances programs like Medicare and Medicaid, as well as other facets of the health insurance industry.

Taxation and Affordability

The taxation associated with the healthcare legislation aims to shift a significant portion of the health insurance burden to employers and insurance companies. It does not affect individuals earning less than $250,000 a year, which represents a small percentage of the population. The intention is to provide assistance to those who are less fortunate and restore the nation’s position as a world leader.

If you’re interested in a year-by-year rundown of the ACA’s key features, the National Library of Medicine provides the chronology here.

And if you’re interested in finding the most affordable health insurance with the coverage best suited to your needs, simply enter your ZIP code to begin comparing quotes.

Case Studies: Affordable Care Act Explained

Case Study 1: Sarah’s Story: Access to Affordable Coverage

Sarah, a self-employed artist, faced difficulties in finding affordable health insurance due to a pre-existing condition. The implementation of the ACA prevented insurance companies from denying coverage based on pre-existing conditions. Sarah was able to find an affordable plan through the health insurance marketplace, granting her peace of mind and access to necessary healthcare services.

Case Study 2: John’s Journey: Expansion of Medicaid

John, a low-income worker, faced challenges in accessing healthcare before the implementation of the Affordable Care Act (ACA). Due to financial constraints, he couldn’t afford private insurance, and his state’s strict Medicaid eligibility criteria further limited his options. However, the ACA brought about significant changes by expanding Medicaid to include individuals with incomes up to 138% of the federal poverty level.

This expansion made John eligible for Medicaid, granting him access to essential preventive care and treatment for chronic conditions that were previously out of his reach due to financial barriers.

Case Study 3: Maria’s Relief: Closing the Medicare Part D “Donut Hole”

Maria, a senior citizen, experienced financial strain caused by the Medicare Part D coverage gap, also known as the “donut hole.” However, the Affordable Care Act (ACA) aimed to alleviate this burden by implementing a gradual closure of the coverage gap. This closure effectively reduced the out-of-pocket expenses for prescription drugs for seniors like Maria.

Consequently, she no longer had to make difficult choices between purchasing vital medications and meeting other essential needs, leading to a notable improvement in her overall quality of life.

Case Study 4: Roberto’s Options: Young Adults’ Coverage

Before the ACA, many young adults struggled to maintain health insurance coverage after aging out of their parents’ plans. Roberto, a recent college graduate, faced this dilemma. However, the ACA allowed young adults to remain on their parents’ insurance plans until the age of 26. This provision gave Roberto the freedom to explore career opportunities and pursue further education without worrying about losing access to healthcare.

Case Study 5: Community Impact: Reducing Uninsured Rates

The ACA aimed to reduce the number of uninsured individuals across the country. Communities with higher uninsured rates experienced significant benefits through the law’s provisions. For example, a study conducted in a low-income community found that the ACA’s Medicaid expansion led to a substantial decrease in the number of uninsured residents. This resulted in improved healthcare access and better health outcomes for the community as a whole.

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