The Affordable Care Act, commonly referred to as “Obamacare,” seeks to make health insurance more accessible for those without it. It also creates state-based American Health Benefit Exchanges to assist individuals and small businesses purchase health coverage.
The Affordable Care Act (ACA) safeguards patients with preexisting conditions by prohibiting insurance companies from setting annual or lifetime limits on coverage. Furthermore, it requires plans to include essential health benefits like prescription drugs and maternity care.
1. Individuals and families with incomes up to 400 percent of the poverty level
People whose incomes reach 400% of the poverty level or above may qualify for premium tax credits to help them afford health insurance. These subsidies have been an integral part of the Affordable Care Act’s success in providing more Americans with access to affordable coverage.
Private insurers must also cover preventive services like cancer screenings, cholesterol tests and annual check-ups at no cost to consumers. This helps shield patients from forgoing important routine medical appointments that could pose serious risks in the future.
In addition to premium tax credits, some people may qualify for supplemental cost-sharing assistance which lowers the actuarial value of benchmark coverage (the minimum level required by the Affordable Care Act). This financial help is especially advantageous to those below the federal poverty line who have higher healthcare expenses; it reduces their share in costs as well as deductibles.
2. Individuals and families with incomes between 138 and 200 percent of the poverty level
The Affordable Care Act (ACA) has provided individuals and families with unprecedented access to affordable, high-quality health care for the first time in their lives. It offers tax credits that help people pay for coverage while encouraging innovative medical care delivery methods designed to reduce costs.
The law also raises standards to guarantee children and their parents can access comprehensive health coverage. It declares pediatric dental and vision benefits essential, while expanding Medicaid coverage up to 138 percent of the federal poverty level–an amount that helps keep kids healthy while keeping families financially stable.
However, in states that have chosen not to adopt the ACA’s expansion, those with incomes below 138 percent of poverty level fall into a coverage gap between subsidized Marketplace coverage and Medicaid, known as an eligibility gap. KFF estimates that 2.2 million Americans living in these non-expansion states are affected by this coverage gap.
3. Individuals and families with incomes between 200 and 300 percent of the poverty level
The federal poverty level (FPL) is the income amount used to determine eligibility for Medicaid, ACA premium tax credits and cost-sharing reductions. Each year, this threshold is adjusted by HHS using data from the Census Bureau and adjusted for inflation using Consumer Price Index values.
The FPL is an important indicator of poverty, but not the only one. There is also a more comprehensive measure called the federal poverty threshold that is used by HHS when setting federal poverty guidelines.
The poverty guidelines are a version of the federal poverty measure used for administrative purposes such as determining eligibility for certain federal programs. Programs that use this measure include Head Start, SNAP (food stamps) and the National School Lunch Program.
4. Individuals and families with incomes between 300 and 400 percent of the poverty level
Individuals and families between 300-400 percent of the poverty level may qualify for ACA premium tax credits (subsidies). These subsidies help shield people from rising premium costs, keeping plans affordable.
From 2021-2025, certain states are offering supplemental financial assistance to lower-income individuals and families who don’t have access to employer-sponsored coverage or Medicare. This additional help has resulted in lower uninsured rates.
Massachusetts offers a generous additional subsidy that drastically lowers marketplace enrollees’ net premiums for benchmark plans. This assistance can be particularly advantageous to low-income consumers who purchase their own coverage but would otherwise struggle to afford health coverage.
In addition to the Affordable Care Act’s subsidies, many states offer Medicaid and CHIP – the Children’s Health Insurance Program – programs that typically provide even greater financial assistance than ACA premium subsidies to low-income households. For further details, please see the links provided below.