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Understanding the Basics of the Affordable Care Act

Understanding the Basics of the Affordable Care Act

In 2014, the Patient Protection and Affordable Care Act, commonly known as ObamaCare, came into effect.  Since then, the law has been updated. Most notably, the individual mandate that required everyone in the U.S. to be covered or pay a tax penalty no longer applies. Let’s run through some of the basics of the Affordable Care Act as it stands in 2022. 

What is the Affordable Care Act?

The complete name of the ACA is the Patient Protection and Affordable Care Act, and it is a United States federal statute signed into law by President Barack Obama on March 23, 2010. It represents one document of a complete regulatory overhaul of the U.S. healthcare system.

The following facts will help you understand what you need to know about Obamacare:

  • While there is no longer a federal mandate for healthcare, certain states have instituted their own mandate including California, Connecticut, Hawaii, Maryland, Minnesota, Rhode Island, and Washington. Citizens and Residents in those states may be required to pay a penalty if they do not have healthcare. 
  • Each state has at least one health insurance exchange that acts as an insurance marketplace where insurance providers offer health care plans for consumers to buy.
  • If the cheapest qualifying healthcare plan you can buy costs more than 8% of your income after tax credits and subsidies, you are exempt from purchasing a health plan and should apply for Medicare or Medicaid.
  • While the Affordable Care Act does not apply to people who are not legal residents, visitors to the U.S. will not receive free healthcare and any medical care they need during their visit will not be affected by the ACA.
  • Young adults can stay on their parents’ health insurance plan until age 26 even if they are married, working, and/or living on their own.
  • You can no longer be excluded from buying health insurance or be charged more than a healthy person of the same age if you have a pre-existing medical condition.
  • Co-payments for routine preventative care such as physicals, cancer screening, and immunizations are no longer valid.

So those are the basics; now, let’s take a look at how the ACA affects you.

How the Affordable Care Act Affects you?

  • If you’re insured through your employer – if you currently have health insurance through your employer, you won’t need to do anything and your employer has probably already made changes to your coverage, including:
    • Expanded no-cost preventive care for vaccinations, diabetes and cancer screenings, alcohol abuse, and more
    • No annual or lifetime limits on essential health benefits
  • If you’re insured on your own – if you’re covered under a private health insurance policy, the health care coverage you have should have been updated to include the protections defined in the ACA. You can keep your current plan or shop around for a new one in the health insurance exchanges.
  • If you’re a Medicare beneficiary – if you’re already covered under Medicare you don’t need to take any action because there are no changes.
  • If you’re not insured for healthcare – if you do not have insurance and you are a U.S. citizen or legal resident, you now have more options than ever for getting health insurance.  Insurance companies can no longer deny you coverage if you have a medical condition, and there are no qualifying tests to pass to obtain coverage. To find healthcare you can afford, visit the website during the open enrollment period, select your state and fill in some income-based questions and you’ll get a list of healthcare options that should work for your budget.

If you are not a legal resident or citizen of the U.S., or if you are a U.S. citizen who spends over 330 days outside of the U.S. in a given calendar year, the ACA does not affect you, but you will be required to pay for any medical treatment you receive in the U.S. through a visitors insurance plan or out of pocket. It is for this reason that many visitors to the U.S. are making sure they have adequate coverage. There is no free healthcare in the U.S. and U.S. healthcare is fairly expensive, so it’s a good idea to purchase a Visitors Health Insurance for your visit to the U.S.

How to Get and Pay for Healthcare

The ACA offers a healthcare marketplace and there is a specific open enrollment period that may change each year.  For 2022, the Open Enrollment Period was Monday, November 1, 2021 through Saturday, January 15, 2022. If you didn’t act by January 15, 2022, you can’t get 2022 coverage unless you qualify for a Special Enrollment Period. You can preview 2022 plans and prices now and complete your enrollment starting November 1.

Just like its name implies, the Affordable Care Act was designed to lower the high cost of U.S. healthcare for all American residents and citizens. Through the marketplace you should be able to find plans that fit your budget. Financial help through the U.S. federal government is only available to U.S. citizens and legal residents and only when the insurance is purchased through the health insurance marketplace. Income guidelines apply.

What the Affordable Care Act is Not

To fully explain the ACA, it’s important to make clear what the ACA isn’t. Here is a list of things that the ACA is NOT.

  • The ACA is NOT a free healthcare system
  • The ACA is NOT a replacement for health insurance.
  • The ACA is NOT a way to skip paying for your healthcare and medical services.
  • The ACA is NOT a set of government-run hospitals or health services.

See for the latest updates to the Affordable Care Act.