Obamacare – How Does it Work?

Obamacare – How Does it Work?

obamacare how does it work

The Affordable Care Act (ACA) makes health insurance accessible to more people through state-based exchanges that offer subsidized private health plans, as well as increasing benefits and protections provided by existing policies.

The Affordable Care Act (ACA) offers many consumer protections, such as allowing young adults to remain on their parents’ plans until age 26 and prohibiting insurers from denying coverage due to preexisting conditions. Furthermore, larger employers must provide health insurance, and premiums will be covered through a tax on individuals whose income exceeds 400% of poverty level.

Health insurance exchanges

Obamacare, also known as the Affordable Care Act (ACA), has revolutionized how Americans obtain health insurance. The law prevents insurers from denying coverage for preexisting conditions and allows parents to keep their children on their plan until age 26. Employers must offer health coverage to employees under Obamacare; marketplaces for private coverage were created; cost assistance is also offered through this act.

The Affordable Care Act puts pressure on insurance companies to spend more of their premium dollars on medical care and quality improvements rather than advertising and overhead; otherwise they must rebate part of it back to consumers.

To receive cost assistance through the Affordable Care Act exchanges, individuals must obtain an eligible plan during open enrollment by signing up online or visiting an enrollment center. In addition, special enrollment periods for qualifying events allow consumers to enroll outside of open enrollment periods.


Subsidies are an integral component of Obamacare, helping lower-income individuals access health insurance at an affordable cost. Subsidies are only available through the government-run marketplace (commonly referred to as an exchange). To find out whether you qualify, answer a few easy questions on the exchange, then cost assistance will automatically apply when selecting your plan in exchange. It will not appear when filing taxes as it goes directly to insurer on your behalf and won’t need to be declared separately.

Premium subsidies and cost-sharing reductions provide assistance for individuals living below 400% of poverty level, with advance premium tax credits helping lower monthly premium costs and subsidies reducing out-of-pocket costs (deductibles/copayments/etc). Should your household income change during the year, submit updated income data during open enrollment so you receive the correct amount of subsidy.

Tax credits

The Affordable Care Act, more commonly referred to as Obamacare, was signed into law by President Barack Obama in 2010. Its aim was to make healthcare more accessible while decreasing costs. Key features include subsidies that help low-income Americans cover healthcare costs; additionally, employers must offer affordable health coverage or face penalties.

It also prevents insurers from denying coverage or charging more to those with preexisting conditions, and requires them to use 80 percent of premiums toward medical services and improvements rather than marketing and administrative costs.

The Affordable Care Act has also made purchasing health insurance simpler through the Marketplace, an online insurance exchange which connects individual health plans with potential customers and allows private insurers to compete for customers. All legal citizens are welcome; however, costs vary based on state and plan, making comparison shopping important in obtaining optimal value.

Medicaid expansion

Obamacare, otherwise known as The Patient Protection and Affordable Care Act, has transformed health insurance landscape in many ways. Subsidies to assist Americans afford coverage are now available; health insurers cannot refuse or drop policies due to preexisting conditions; 80 percent of premium dollars should go directly toward medical care services and quality improvements rather than advertising or overhead costs; etc.

The Affordable Care Act, more commonly referred to as Obamacare, expanded Medicaid eligibility to cover more low-income families and individuals. This was made possible due to an enhanced 90 percent federal match for any expansion population enrolled under Medicaid expansion plans – providing states an added incentive for expanding.

Additionally, the Affordable Care Act prohibits health insurance companies from denying coverage to people with preexisting conditions and limits the amounts that can be charged for policies. Parents can keep their children on their policy until age 26 while small businesses find it easier to provide employees with health coverage.

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About the Author: Raymond Donovan