Learn the differences between Obamacare and Medicare as they pertain to your health insurance coverage. Discover how each program affects you personally.
The Affordable Care Act (ACA) created health insurance exchanges so people could compare plans and find the one best suited for them. Furthermore, subsidies were provided by the ACA to help lower income individuals cover the cost of their plans.
What is Obamacare?
In 2010, President Barack Obama signed the Affordable Care Act, commonly referred to as Obamacare, into law. This landmark piece of legislation was intended to ensure health insurance for all Americans and safeguard consumers against unfair or abusive insurance company practices.
The Affordable Care Act (ACA) made significant modifications to how insurance companies operate in America, mandating that they cover a broad range of services and prohibiting them from dropping or denying coverage to people with preexisting conditions. It also created state and multi-state marketplaces where individuals could purchase their own private health plans.
Additionally, it expanded Medicaid coverage – a government program that pays for medical care for low-income individuals – by offering tax credits to reduce premium costs for those unable to cover their own medical bills.
Another component of the Affordable Care Act (ACA) was the individual mandate, which requires all Americans to have “qualifying” health insurance or pay a fee. The penalty starts at $95 or 1.0% of your income and increases annually according to inflation.
Medicare is a program available to those 65 years or older who cannot afford private healthcare coverage. It also covers individuals with disabilities and families living on low incomes.
What is Medicare?
Medicare is a government program that assists those 65 and older with healthcare costs. It’s administered by the Centers for Medicare & Medicaid Services, an agency of the U.S. Department of Health & Human Services.
Most individuals become eligible for Medicare when they reach age 65, or if they have a qualifying illness or disability that makes them eligible before then. Furthermore, individuals must have paid into Medicare taxes continuously for at least 10 years.
The program consists of four parts: Part A (hospital insurance), Part B (medical insurance) and Part D (prescription drug coverage). Beneficiaries typically select between a private insurer-run plan called “Original Medicare” or a public program known as “Medicare Advantage.”
Original Medicare is a fee-for-service health insurance program that covers doctors and hospitals, medical supplies, and most preventive services. Beneficiaries who purchase Medigap private Medicare supplement insurance policies to cover out-of-pocket expenses like deductibles or copayments. Many retirees also get additional medical coverage through their current or former employer/union. Those without additional coverage usually have to pay monthly premiums for Medicare Parts A and B; they may even face a late enrollment penalty if they didn’t sign up when first eligible.
What is the Health Insurance Marketplace?
The Health Insurance Marketplace is a platform where individuals and small businesses can shop and enroll for health insurance under the Affordable Care Act, commonly referred to as Obamacare. It’s managed jointly by state and federal governments.
The Marketplace allows you to compare plans from numerous insurers in one convenient place and see if you qualify for financial assistance to reduce premiums or save on healthcare costs. It’s free and can be an invaluable asset in finding the best plan that meets both your needs and budget.
All qualified health plans sold in the marketplace are ACA-compliant – meaning they meet all federal government standards. This guarantees that people with preexisting conditions won’t face higher premiums or be denied coverage due to medical underwriting.
On the Marketplace, there are four distinct plan categories with varying premiums and out-of-pocket expenses. All plans provide essential health benefits as well as access to doctors.
The Affordable Care Act (ACA) has made it simpler for individuals and families to secure affordable health coverage. It also offers tax credits and cost-sharing subsidies that help people pay their insurance premiums and out-of-pocket healthcare expenses.