The Patient Protection and Affordable Care Act (PPACA), more commonly known as the Affordable Care Act (ACA), was signed into law on March 23, 2010. The ACA requires individual and small group plans to include categories of coverage called Essential Health Benefits. Insurance companies may not reject applicants based on medical status, and premium costs may only vary based on age, location, smoking status, and number of people on a plan.
An “Obama Health Plan” or an “Obama Plan” are both euphemisms for an ACA health insurance plan. No plan is officially named an Obama Health Plan or an Obama Plan, but the name may have become prevalent since people including President Obama originally referred to ACA as Obamacare. A Gallup poll conducted in November 2013 found that there were differences in approval ratings of the new healthcare law when different words were used to describe the law.1 The important thing to keep in mind is that the terms Obamacare and Affordable Care Act are interchangeable.
The ACA created four categories of health plans called metal tiers that are defined by percentage of out-of-pocket costs covered for a typical enrollee population:
Catastrophic plans provide the same essential benefits as the metal plans, but have higher out-of-pocket costs for enrollees. They are only available for people under the age of 30 and those who qualify for hardship exemptions.
Health plans can be purchased both on-exchange and off-exchange, but subsidies for premiums and out-of-pocket costs are only available on-exchange. Individuals that do not obtain health insurance coverage and employers that do not provide affordable coverage for their employees may face tax penalties as a result of the ACA.
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