The Patient Protection and Affordable Care Act (PPACA, also called the ACA or ObamaCare), enacted in March 2010, brought big changes to American health care.
While the specifics may vary slightly depending on your state, beginning in 2014, all health insurance plans are required to cover certain basic things, commonly referred to as the 10 essential health benefits. Also included in the sweeping changes: Insurers can no longer legally deny you coverage because of a pre-existing condition or because your plan has a limit on lifetime or annual coverage. Insurers can no longer legally increase your premiums if you get sick, nor can they determine your rate according to your sex.
Those are just a few high-level points about what's covered, though, and while important to know, many Americans have a lot of questions about the details of how health insurance plans actually work for our families and for each of us individually. You're not alone if you find yourself wondering, do I have to purchase health insurance? Do I have to buy private health insurance through an exchange? If I choose not to purchase a plan, will I be covered if, say, I need emergency services? (Answer key: 1. No, 2. No, and 3. No).
And if you're among those wondering how you'll afford a policy (or you assume you can't afford it), the answer to that concern is: maybe you can.
Under the PPACA, every American — no matter what your income level — is expected to have health insurance that meets those required minimum essential health benefits. To help make that a reality, some people may be eligible for federal subsidies to ease the financial burden of paying insurance premiums and out-of-pocket expenses.
There are a few ways you can meet the insurance requirement. In 2014, the first year mandated insurance took effect, more than 8 million Americans enrolled in a private health insurance plan through the Marketplace (also known as the Health Insurance Marketplace, or just the Marketplace). About 5 million people purchased private health insurance through insurance brokers outside the Marketplace. Additionally, nearly 5 million people were enrolled in Medicaid (and CHIP). Others enrolled in employer-sponsored plans or Medicare, or they were insured through another public health insurance plan such as through the military. As many as 42 million Americans remain uninsured [sources: HHS, ASPE Office of Health Policy].
If you purchase health insurance through the Marketplace, whether you've been living uninsured or you've found your premiums too pricey, you might be eligible for financial assistance.
Tax subsidies are provided to low- and moderate-income individuals and families, and they offer two ways to lower insurance costs: a tax credit that lower your monthly insurance premiums and reductions to out-of-pocket expenses. Together, the average financial assistance of those premium and cost-sharing subsidies comes out to be about $5,000 [source: ObamaCare Facts].
More than half of those who remain uninsured report they're unaware subsidies are available for people in low-to-moderate income brackets, though, so let's break down what those subsidies include, who is eligible, how you qualify and how you use those credits [source: Kaiser Family Foundation].