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What You Need to Know About Affordable Care Act Health Insurance

Now that open enrollment has begun, which is the time period when individuals and families can enroll in Affordable Care Act (ACA) health insurance for next year, it’s the perfect time to learn more about these coverage options and if they’re right for you.

Before the ACA, Americans who didn’t qualify for Medicaid, Medicare or employer-provided health insurance often faced sky-high costs for coverage or couldn’t access it at all. Now, many individuals and families can find affordable health insurance that meets their needs, including:

  • Freelance, consultant and gig workers
  • Unemployed individuals
  • Part-time employees without access to coverage through their employer
  • Business owners without employees
  • Retired people who don’t yet qualify for Medicare

Benefits available through all ACA plans

The ACA also mandated that certain benefits must be included in all ACA health insurance. So, while there are different ACA plan levels, all plans have to cover 10 essential health benefits. These include things like prescription drugs, pregnancy and newborn care, pediatric services (including dental and vision), mental health, preventive care/wellness, lab tests, ER and hospital services, among others. It also required that preventive and wellness services are fully covered, meaning if you enroll in an ACA plan, you won’t have any out-of-pocket costs for these important services.

Choosing the plan level that’s right for you

If you qualify for coverage, you’ll want to start by understanding the different options that are available to you. The different ACA plan levels are distinguished by “metals”—including Gold, Silver and Bronze. Even though all plans have to cover the essential services mentioned above, these levels indicate how the insurer splits costs with you through fees like deductibles, coinsurance and copays. The Gold plan requires the lowest cost share from you for many services, while the Bronze will have the highest.

Of course, premium costs are also a factor when comparing plan options. Premiums are the monthly bills you pay for this health insurance. Plans that include a lower cost share for you will have higher premiums. For example, the Gold plan has the highest monthly premium, while the Bronze has the lowest.

However, help may be available to you that can lower the cost of these plans. The government offers premium tax credits (premium discounts) to people who qualify for them based on income and household size.

Qualifying for a premium tax credit

Many people don’t realize that they qualify for premium tax credits—which can dramatically reduce the cost of their health coverage. You can find out if you qualify for tax credits from the government through healthcare.gov. As you apply, you can simply enter your income and household information, and find out if you qualify for these credits. According to the Centers for Medicare & Medicaid Services, 87% of consumers in states that use the HealthCare.gov platform received a premium tax credit in the 2020 open enrollment period.

If you want to see if you qualify before completing an application, use this helpful tax credit calculator.

Income limits for the premium tax credit

The premium tax credit income qualification range is between $13,590 and $54,360 for individuals. For a family of four, income can be between $27,750 and $111,000. For those who earn more than the income limits based on household size, some may still qualify for the premium tax credit, thanks to a 2021 law that stated that the total cost of the premium for qualified consumers on the exchange may not exceed 8.5% of their total household income.

Additional assistance paying for out-of-pocket costs

In addition to a premium tax credit, some individuals and families may also qualify for extra savings known as “cost-sharing reductions,” which allow them to pay less out-of-pocket each time they get medical services. However, this is only available to consumers who select the Silver plan.

Other factors to consider

The metal plan level isn’t the only choice you have when selecting your ACA plan. In some locations, you can also select from a wide variety of health insurance companies for your coverage. Choosing the right health insurance company can be important because insurers may offer different value-added programs and services and you may have a preference around customer service and the plan’s network. The network includes all of the doctors, hospitals and other care providers contracted with the health insurer to provide care within each plan.

How to enroll

Many people compare and enroll in ACA plans through the Health Insurance Marketplace® (“the marketplace” or “the exchange). The healthcare.gov website is run by the federal government, but the coverage is through private health insurers.

Some insurers also allow you to enroll directly from their own website. You can choose your plan and enroll directly from the plan information page. You can also enlist the help of a qualified health insurance broker, who can help you choose an ACA plan and enroll.

Get covered for 2024

There are a variety of factors to consider when you’re deciding if ACA plans are right for you or which plan best meets your needs. Learn more about the ACA and how to enroll and remember that open enrollment ends January 15, 2024 for 2024 coverage. With so many new and affordable plan options, now is the time to make sure you have health insurance for 2024.

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Content in this article was updated on October 6, 2023.

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