What is the Affordable Care Act (ACA)?
The Patient Protection and Affordable Care Act is a 2010 health-reform law better known as the Affordable Care Act (ACA) or, often, Obamacare. This was the largest comprehensive federal healthcare legislation passed in the 45 years since Medicare and Medicaid were established in 1965.
Creating a new way to approach health insurance and healthcare also meant meeting three main goals:
Making affordable health insurance available to more people through marketplaces, premium tax credits, and extended coverage for young adults
Expanding the Medicaid program
Supporting innovative medical-care delivery that reduces costs
The law has survived several legal challenges before the U.S. Supreme Court.
The ACA reached more than 21 million people for the 2024 coverage year. Generous subsidies resulting from the Inflation Reduction Act of 2022 sustained monthly plan premiums as low as $10 or less for 4 out of 5 consumers and these will continue for the 2025 coverage year.
Eligibility
The ACA gives most uninsured people in the U.S. access to health insurance. Generally, you qualify to apply for coverage if you:
Live in the U.S.
Are a U.S. citizen, U.S. national, or are lawfully present in the U.S.
Are not incarcerated
Are not covered by Medicare
You also qualify if you have pre-existing conditions, which are previous medical circumstances including cancer, diabetes, and pregnancy.
While any eligible person can buy insurance on an ACA marketplace, if you have lower or moderate income, you may qualify for financial assistance that reduces premiums as well as out-of-pocket costs when you or your covered family member receive care.
If you have household income that is 100% to 400% of the federal poverty level (FPL) — and sometimes higher — you may qualify for a premium tax credit for the monthly cost of your insurance. (FPL amounts are higher in Alaska and Hawaii.) You also may be eligible for extra savings known as cost-sharing reductions that will lower your out-of-pocket costs when you receive care.
Open enrollment
ACA open enrollment is typically November 1 to January 15 for the next plan year.
Enrollment requires you to complete an application with information about the people in your household and your income. Then, you will choose a plan and pay any premium.
There are a number of ways to sign up for Obamacare on your own, with a navigator, or with an agent or broker. You can:
Enroll online through HealthCare.gov.
Use the Find Local Help tool to locate in-person assistance in your area with a navigator, agent, or broker. All are trained to walk you through the marketplace process, and services are free.
Apply through the website of a certified enrollment partner, such as a private health insurance company.
Enroll by phone by contacting the Marketplace Call Center at 800-318-2596. This line is available 24 hours a day, 7 days a week — excluding holidays — with service in English and other languages.
Complete and mail in an application.
ACA health insurance plans
ACA plans are presented in “metal” tiers, or health plan categories that are based on how you and your plan will split the cost of care. The metal tiers are:
Bronze: Plans in this tier have the lowest monthly premiums but the highest costs when you need care.
Silver: Known as the “benchmark” plan, options in this tier have moderate monthly premiums and moderate costs when you access care. You must choose a silver plan to qualify for cost-sharing reductions that lower out-of-pocket expenses when you receive care, such as deductibles, copayments, and coinsurance. Your plan also has a lower out-of-pocket maximum.
Gold: This tier features plans with high monthly premiums but low costs when you need care.
Platinum: Plans in this tier have the highest monthly premiums and the lowest costs when you access care.
There are also catastrophic health plans for people under age 30 and anyone 30 and older with a hardship or affordability exemption. Catastrophic plan premiums are very low, but the plans have extremely high deductibles. These plans cover preventive health services without you having to meet a deductible.
Coverage
Essential health benefits are medical services that must be covered under any Affordable Care Act marketplace plan. There are 10 essential health benefits that all ACA plans must cover. They are:
Emergency services
Hospitalization
Laboratory services
Mental health and substance use disorder services
Outpatient care
Pediatric services
Pregnancy, maternity, and newborn services
Prescription drugs
Preventive care, wellness services, and chronic disease management
Rehabilitative and habilitative services and devices
ACA plans also must offer dental coverage for children and may provide other benefits.
One very important category of essential health benefits that applies to almost everyone is preventive care.
Preventive health services, such as vaccinations and screenings, are provided without out-of-pocket costs when you receive routine care from a provider in your plan’s network.
There are specific preventive health benefits for children, adults, and women.
Costs
The total costs of each plan will depend on what type you choose and how much you access care. ACA health plans require you to pay a monthly premium, which may be reduced by a premium subsidy — also called a premium tax credit.
When you access care, you often will have these other out-of-pocket costs:
Deductible: The deductible is how much you will spend before the insurance begins to pay, except for when you access preventive health services.
Copayments and coinsurance: These are payments you make each time you get a care, excluding preventive health services. A copayment, or copay, is a fixed amount that you pay for a health service after meeting your deductible. Coinsurance is a percentage of the cost of a covered health service after you have met your deductible.
Out-of-pocket maximum: Also known as the out-of-pocket limit, this is the most you would have to pay for covered services in a plan year. After your deductible, copayments, and coinsurance reach this amount, all covered services in a plan year are paid 100% by the insurance company. For 2025 marketplace plans, the out-of-pocket maximum is $9,200 for an individual and $18,400 for a family.
Marketplaces
The HealthCare.gov website is the national platform for Affordable Care Act health insurance information and serves as the enrollment portal for people in 31 states. Washington, D.C. and 19 states have their own marketplaces and deadlines for ACA enrollment.
If you live in one of these 19 states or D.C., you will enroll through a state marketplace:
California
Colorado
Connecticut
Georgia
Idaho
Kentucky
Maine
Maryland
Massachusetts
Minnesota
Nevada
New Jersey
New Mexico
New York
Pennsylvania
Rhode Island
Vermont
Virginia
Washington state
Washington, D.C.
If you live in any other state, you will enroll through the national marketplace.
Premium subsidies
Under the ACA, you may qualify for premium subsidies, which are discounts that reduce the monthly costs of your health insurance plan. Subsidies are premium tax credits based on ACA income limits, or your estimated income in a coverage year.
Most often, ACA subsidies are provided in the form of an advance premium tax credit. This amount is paid to your insurer throughout the year and reduces your monthly bill. Because this credit is based on estimated income, your final income will determine whether you have to pay the government at tax time. If you were eligible for more than you received, the difference will be refunded to you.
To avoid surprises, make sure you report income changes throughout the year. You also have the option to pay the premium in full each month and receive a credit on your taxes for the coverage year.
Common concerns
It depends. At one time, the ACA had a nationwide individual mandate that required people to have insurance or claim a health coverage exemption. Otherwise, they faced a financial penalty at tax time. The federal requirement for health insurance coverage, known as the individual shared responsibility provision, ended in 2018.
As of the 2025 coverage year, only four states and the nation’s capital still have an insurance mandate with financial penalties for being uninsured:
Additionally, Vermont residents must report whether they have insurance when they file their state taxes, but there is no financial penalty for being uninsured. Maryland asks residents about health insurance on their state tax filings as an avenue to enrollment.
If you cannot afford Obamacare, see if you can qualify for the state-based Medicaid insurance program. Your ACA application can help you determine if you qualify for Medicaid.
Every state, Washington, D.C., and all five U.S. territories with permanent populations (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands) have Medicaid programs. You may qualify for Medicaid depending on your household income, family size, and other factors.
Under Obamacare, some states have expanded Medicaid to include people with slightly higher incomes.
If you do not qualify for Medicaid and cannot afford any ACA health plan, you have other free and low-cost options to access healthcare, including safety-net clinics and community health centers.
If you miss the open enrollment deadline in your state, you may qualify for a special enrollment period if you have a qualifying life event. Qualifying events include:
Losing health coverage
Moving to a new state
Getting married
Having a baby
Adopting a child
There's also more opportunity to change your ACA plan during the year — multiple special enrollment periods — for people who expect to have low incomes in 2025. For this purpose, low income is defined as no more than 150% of the federal poverty level, which is $22,590 for 1 person, and $38,730 for a family of three in 2025. (Federal poverty level amounts are higher in Alaska and Hawaii.)
Yes, you do! You usually can remain on your parent’s health insurance plan until the end of the year you turn 26 — even if you're married, you're a parent, you're not your parent's dependent for tax purposes, or you don't live at home. This applies if your parent has job-based insurance or an insurance plan through the Affordable Care Act marketplace. This may work best if you go to school or live in the same state as your parent. If not, you should check the provider network in the plan to see if you can access care where you live or go to school.
The cost to add a dependent under the age of 26 to a parent’s plan is usually less than what you'd pay for separate health insurance coverage. People under 30 also have access to catastrophic health plans.
References
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