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Consumer Health

Consumer health information and education from NCC Library and online resources

Understanding the Patient Protection and Affordable Care Act (ACA) or "Obamacare"

The Patient Protection and Affordable Care Act (ACA) or "Obamacare," was signed into law  in  2010. The ACA requires individuals who don't receive health insurance benefits through their employers to buy it or pay a penalty. The law also puts certain limits on what insurers may or may not do with respect to eligibility and coverage. 

Here are the main parts of the ACA and how it effects patients/consumers:

  • Dependents may be covered by their parents' insurance plans until they turn 26.
  • Insurers may not cancel policies when policy holders become sick.
  • State health insurance exchanges (the "Health Insurance Marketplace") allow businesses and individuals to compare plans and enroll for coverage.
  • Insurers may not place a lifetime monetary limit on hospital stays or other benefits deemed "essential" in new policies.
  • Insurers may not deny coverage to individuals for pre-existing conditions, and must offer the same premiums within the same age and geographical group regardless of gender and pre-existing conditions, except tobacco use.
  • Individual mandate takes effect, requiring all individuals (with some limited exceptions) to carry health insurance or pay a tax penalty. Subsidies will help low-income people comply with this mandate.
  • Medicaid eligibility expands to include those earning 133 percent of the official poverty level, including adults without dependents, in participating states.
  • Subsidies (in the form of refundable tax credits) available on the state health insurance exchanges for individuals with a household income up to 400 percent of the official poverty level. (For common calculations of the federal poverty level, see:
  • Employers may not require employees to wait more than 90 days for health insurance eligibility.
  • Tax credits are offered to small businesses (25 or fewer full-time employees, defined as 30 hours per week) for compliance with ACA.
  • Larger employers (more than 50 full-time employees) will be charged a $2,000 penalty per full-time employee that lacks health coverage. 

If you already have insurance coverage, whether it's Medicare, Medicaid, a private insurance plan, or through your employer—you may keep your current plan. If you want to change insurance, you can shop in the "marketplace", however you will not be eligible for subsidies and your employer will not be penalized if you voluntarily leave your work-based health insurance plan.

The following ACA provisions will impact existing plans that are purchased after March 23, 2010:

  • Insurers are required to provide individuals with a plain-language summary of benefits.
  • Rate increases of more than 10% must be publicly justified.
  • 80% of premiums must be spent on actual health care services.
  • Insurers may not cancel your plan in response to an illness.
  • Patients are free to choose any physician within the plan's network and may use an out-of-network emergency room without penalty.
  • Annual and lifetime dollar limits on care are prohibited.
  • Patients are granted the right to appeal a denial of payment whenever an insurer does not pay for healthcare services.  


What is the Health Insurance Marketplace?

The Health Insurance Marketplace is a resource where individuals, families, and small businesses can learn about their health coverage options; compare health insurance plans based on costs, benefits, and other important features; choose a plan; and enroll in coverage.

The Marketplace also provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children’s Health Insurance Program (CHIP). New York's marketplace is called "New York State of Health" and can be found here: