The Patient Protection and Affordable Care Act dates from 2010 and provides a vast range of consumer protections related to health insurance. As one of the main achievements of the administration of President Barack H. Obama, it is often popularly known as Obamacare. The law has become a focal point of partisan controversy since its enactment, and it may not permanently survive in its current form. Opponents question whether the federal government has the right to control individual decisions on health care, as well as whether the health care system can shoulder its massive new burdens. However, it is worth understanding the key rules under the Act and how they expand on current law. (More basic, long-standing protections are available under HIPAA, which you can explore here in more detail.)
By making health insurance mandatory for everyone, the Affordable Care Act is projected to provide health insurance to 95 percent of the U.S. population, including 30 million people who were previously uninsured. It passed in the U.S. House of Representatives by just seven votes. The Affordable Care Act will require nearly a trillion dollars to implement between 2010 and 2020, although the Congressional Budget Office estimates that it will reduce the federal deficit by well over $100 billion. These figures are contested by opponents of the Act. To pay for the costs of implementation, the federal government is levying fees from insurers and companies that make drugs and medical devices. It also is increasing Medicare taxes for certain people and households in high-income brackets.
Nearly any citizen or legal resident of the U.S. must have basic health insurance coverage under the Affordable Care Act. A few groups are excluded from mandatory coverage, such as undocumented immigrants, prison inmates, Native Americans, and certain people who have religious objections to receiving health care. Prior to 2019, individuals were subject to tax penalties for going without coverage, but this part of the law has been repealed.
To provide health insurance more easily, state governments and non-profit organizations have created programs known as American Health Benefit Exchanges. People who have an income that is no more than four times the federal poverty level can get credits and subsidies to cover any costs that they cannot afford. Thus, your total income will dictate how much you pay for insurance.
Implications for Employers
An employer with 50 or more employees must provide health insurance to its employees or face a substantial fine. If the federal government needs to subsidize coverage for any employee, that employer will be fined $2,000 for each full-time employee. If an employer has between 50 and 100 employees, it can set up health insurance for its employees through the Small Business Health Options Program Exchanges. If an employer has 25 or fewer employees, it may be eligible for a tax credit by making contributions to the health insurance costs of its employees.
Protections for Pre-Existing Conditions
The Affordable Care Act goes beyond HIPAA to prevent insurers from denying coverage to anyone based on a pre-existing medical condition. HIPAA previously allowed insurers to create exclusions based on pre-existing conditions within a certain lookback period.
If your income is 133 percent of the federal poverty level or less, you will be covered by Medicaid under the Affordable Care Act. This marks the first time that adults with no children can receive coverage through Medicaid. Read more here about how Medicaid eligibility works.
Coverage for Adult Children
A child who is under the age of 26 can get coverage through the health insurance plan of a parent, even if they are not a full-time student or a dependent of the parent for tax purposes. The Act does not impose restrictions on the amount that the parent must pay to cover an adult child, so they may need to bear these costs instead of their employer.