Haris Ashley
Millions of uninsured people in the U.S. can access health insurance through Obamacare, also known as the Affordable Care Act (ACA). To qualify for Obamacare, you must be a U.S. resident for tax purposes, lawfully living in the U.S., and not incarcerated or covered by Medicare. Depending on your income, you may qualify for Medicaid or premium tax credits or subsidies to help reduce your health insurance costs. Obamacare has expanded the populations eligible for Medicaid in some states, and young adults can stay on a parent's health insurance plan until they are 26.
| Characteristics | Values |
|---|---|
| Residency | A U.S. resident for tax purposes |
| Citizenship | U.S. citizen or non-citizen national |
| Incarceration status | Not incarcerated |
| Medicare status | Not covered by Medicare |
| Income | Depending on income, may not qualify for a premium tax credit or extra savings |
| Enrollment period | Annual Open Enrollment Period |
| Insurance coverage | Does not have a job that offers healthcare coverage |
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What You'll Learn
US residents for tax purposes
If you are a US resident for tax purposes, you are eligible to get Marketplace coverage. This means that you can enrol in an ACA insurance plan as long as you are living in the US lawfully and are not incarcerated or covered by Medicare.
The Affordable Care Act (Obamacare) was signed into law in March 2010 to improve health coverage and make it more affordable through income-based subsidies. This means that, depending on your income, you may qualify for a premium tax credit or extra savings. If you are unable to afford Obamacare, you may qualify for the state-based insurance program called Medicaid. Your Obamacare application can help you determine this.
Each state's Marketplace has its own enrollment instructions. During the Marketplace open enrollment period each year, you can change your coverage during a special enrollment period if you experience a life event like moving or having a baby, or if your household income is below a certain amount.
If you have a new job that does not offer health insurance and your earnings exceed the income estimate on your Obamacare application, you may no longer qualify for the same amount in subsidies. In this case, you should update your application.
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Those with pre-existing conditions
If you have a pre-existing condition, Obamacare, also known as the Affordable Care Act (ACA), offers you protection. Before the ACA, Americans could be charged higher premiums, denied coverage, or dropped from their health insurance due to a pre-existing condition. Now, health insurance companies cannot refuse coverage or charge you more because of a pre-existing condition, nor can they limit benefits for that condition. This means that insurers cannot deny or increase premiums for those with pre-existing conditions such as asthma, diabetes, cancer, or an inherited mutation such as BRCA or Lynch syndrome. Pregnancy is also considered a pre-existing condition and cannot be used to deny or charge more for coverage.
All Marketplace plans must cover treatment for pre-existing medical conditions. No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started. Once enrolled, the plan cannot deny coverage or raise rates based on your health. This also applies to Medicaid and the Children's Health Insurance Program (CHIP).
If you have a "grandfathered" health plan, it may not cover pre-existing conditions. However, you have the option to switch to a Marketplace plan that will cover pre-existing conditions during Open Enrollment. Alternatively, you can purchase a Marketplace plan outside of Open Enrollment when your current plan year ends, and you will qualify for a Special Enrollment Period.
To be eligible for Obamacare, you must be a U.S. resident for tax purposes and be living in the U.S. lawfully. You should also not be incarcerated or covered by Medicare. If you meet these requirements, you can enroll in an ACA insurance plan.
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Adults under 26 on a parent's plan
The Affordable Care Act (ACA) or Obamacare allows adult children to remain on a parent's health insurance plan until they turn 26. This provision applies to all plans in the individual market and all employer plans. Before the ACA, many health plans could remove adult children from their parents' coverage because of their age, whether or not they were a student or lived independently.
The ACA requires plans and issuers that offer dependent child coverage to make the coverage available until the child reaches the age of 26. This rule applies to both married and unmarried children. It also does not matter if the young adult lives with the parent, is financially independent, has other coverage options, or is a student.
If a parent's health insurance plan covers dependents, their child can usually be added to their plan and stay on it until they turn 26. When a parent applies for a new plan, they can include their child on their application if they plan to claim them as their tax dependent. However, if the parent pays the full cost of their Marketplace plan without a tax credit, the child can be included in the application and plan even if the parent doesn't claim them as a dependent.
If a child is covered under their parent's employer plan, the value of the health care coverage is excluded from the parent's income for tax purposes until the end of the taxable year in which the child turns 26. If the child stops coverage before the end of the taxable year, the premiums paid by the parent up to that point will be excluded from their income. Once a child reaches the age of 26 and "ages out" of their parent's coverage, they may have several options. If they are employed and their employer offers a health plan, they can ask if they are eligible for coverage under that plan. Losing coverage under a parent's plan may qualify them for special enrollment in any other employer plan for which they are eligible. This special enrollment must be requested within 30 days of losing coverage.
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People with limited incomes
The amount an individual pays for Obamacare is based on their income, household size, and the plan they choose. The Affordability Provisions in the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022 extend financial assistance for ACA plans through the 2025 coverage year. This means that 4 out of 5 people will be able to find a plan for $10 or less per month with premium tax subsidies.
In some states, Obamacare has expanded the populations eligible for Medicaid, which is a state-based insurance program. Individuals may qualify for Medicaid depending on their household income, family size, and other factors. The Medicaid expansion would have required all states to expand their programs for all legal residents and citizens up to 138% FPL, creating a uniform income eligibility standard across all states. However, this was ruled as unconstitutional, and as a result, the expansion became optional.
Low-income individuals who are eligible for benefits may still be uninsured due to affordability concerns, particularly in states that have not expanded their Medicaid programs or for undocumented individuals prohibited from ACA benefits. Despite these challenges, the ACA has substantially reduced the number of uninsured individuals and improved access to coverage.
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Lawfully living in the US
To qualify for Obamacare, also known as the Affordable Care Act (ACA), you must be lawfully living in the US. This means that you must be a US citizen, a US national, or a lawfully present non-citizen.
US nationals are those who owe permanent allegiance to the US. In nearly all cases, non-citizen US nationals are people born in American Samoa or born abroad with one or more American Samoan parents. If you live in a US territory, you cannot get health coverage through the Marketplace unless you also qualify as a resident in any of the 50 states or Washington, DC.
If you are lawfully living in the US, you can enroll in an ACA insurance plan as long as you are not incarcerated or covered by Medicare. Depending on your income and other factors, your plan may not qualify for a premium tax credit or extra savings. Your application can be denied if you try to sign up outside of the annual Open Enrollment Period, which usually ends on January 15, unless you qualify for a Special Enrollment Period.
A Special Enrollment Period may be triggered by a variety of qualifying life events, such as moving or having a baby. Additionally, you may qualify for a Special Enrollment Period if your household income falls below a certain amount. During the Open Enrollment Period, you can enroll in an Obamacare plan online, by phone, with a paper application, or in person.
Obamacare is designed to make healthcare more affordable and accessible for people regardless of their income. It offers financial assistance to those with limited incomes, reducing their health insurance costs. This includes income-based subsidies, where 4 out of 5 people can find an ACA plan for $10 or less per month with premium tax subsidies.
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Frequently asked questions
As long as you are living in the U.S. lawfully and are not incarcerated or covered by Medicare, you can enroll in an ACA insurance plan.
The cost of Obamacare depends on your income and other factors. In some states, Obamacare has expanded the populations that are eligible for Medicaid.
You can enroll in an Obamacare plan online, by phone, with a paper application, or in person. The majority of states use HealthCare.gov as their Marketplace, but some do not. If you're not sure about your state's Marketplace, you can enter your zip code in this tool.
