What is the Affordable Care Act

The Act expanded Medicaid eligibility, created health insurance exchanges, and prevents insurance companies from denying coverage (or charging more) due to pre-existing conditions. It also allows children to remain on their parents’ insurance plan until age 26.

Key Takeaways

The Affordable Care Act—also known as Obamacare—was signed into law in March 2010. It was designed to extend health insurance coverage to millions of uninsured Americans.

The Act expanded Medicaid eligibility and created a Health Insurance Marketplace. It prevents insurance companies from denying coverage due to pre-existing conditions and requires plans to cover a list of essential health benefits.

Lower-income families can qualify for extra savings on health insurance plans through premium tax credits and cost-sharing reductions.

Understanding the Affordable Care Act (ACA)

The Affordable Care Act was designed to reduce the cost of health insurance coverage for people who qualify. The law includes premium tax credits and cost-sharing reductions to help lower costs for lower-income individuals and families.

All ACA-compliant health insurance plans—including every plan that’s sold on the Health Insurance Marketplace—must cover specific “essential health benefits” including:

  • Ambulatory patient services

  • Breastfeeding

  • Emergency services

  • Family planning

  • Hospitalization

  • Laboratory services

  • Mental health and substance use disorder services

  • Pregnancy, maternity, and newborn care

  • Prescription medications

  • Preventive and wellness services and chronic disease management

  • Pediatric services

  • Rehabilitative and habilitative services

Special Enrollment Periods

You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child. Depending on your Special Enrollment Period type, you may have 60 days before or 60 days following the event to enroll in a plan.

Qualifying Life Event (QLE)

A change in your situation — like getting married, having a baby, or losing health coverage — that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period.

Types of qualifying life events. (The following are examples, not a full list.)

  • Loss of health coverage

  • Losing existing health coverage, including job-based, individual, and student plans

  • Losing eligibility for Medicare, Medicaid, or CHIP

  • Turning 26 and losing coverage through a parent’s plan

  • Changes in household

  • Getting married or divorced

  • Having a baby or adopting a child

  • Death in the family

  • Changes in residence

  • Moving to a different ZIP code or county

  • A student moving to or from the place they attend school

  • A seasonal worker moving to or from the place they both live and work

  • Moving to or from a shelter or other transitional housing

Other qualifying events

  • Changes in your income that affect the coverage you qualify for

  • Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder

  • Becoming a U.S. citizen

  • Leaving incarceration (jail or prison)

  • AmeriCorps members starting or ending their service