Affordable Care Act
Types of Health Insurance: What to Buy under Obamacare
Updated on March 15, 2024
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Whether you are concerned about optimal health or maintaining your current level of health, you will want to ensure access to affordable care.
While it is a fantastic idea to visit your doctor when you have health needs and to take advantage of routine health care, the cost of care can be an issue. Moreover, it is even more problematic if you are shouldering the cost of healthcare by yourself.
There are many types of health insurance plans you can buy during the Affordable Care Act (ACA or “Obamacare”) Open Enrollment Period (OEP). Get information about the types of health insurance now available and select the health plan that’s best suited to your needs.
What is Obamacare?
Obamacare is a term used to refer to the Affordable Care Act (ACA), which is holistic health care reform legislation that passed in early 2010. The enactment of this law would make different changes in the healthcare sector. Primarily, this law, also referred to as PPACA or Obama healthcare, sought to increase health insurance coverage across the US and reduce health insurance costs related to necessary health care.
Legislators had an urgent need to address the regular increase in healthcare costs. These healthcare costs and the lack of coverage would create distress for more American citizens. In addition, the financial pain would potentially severely impact the economy’s growth as more money went to healthcare costs instead of other areas.
They would respond to it by deliberating and presenting the Affordable Care Act.
Here are a few elements that this bill and Obamacare plans seek to address:
- Increase the feasibility of health insurance, making it within reach for a higher portion of the American people.
- Implement government subsidies or premium tax credits to increase health coverage accessibility for eligible individuals.
- Provide coverage to those households that have incomes at a certain range above the federal poverty level.
- Enhance the Medicaid program to account for more adults, although all states have not done so as of yet.
- Encourage innovative initiatives to mitigate the costs of health services
What is Covered Under Obamacare?
What is covered under Obamacare may vary depending on your plan. In general, Obamacare seeks to address essential care. Under any Affordable Care Act marketplace plan, there are essential benefits that must be covered. These include:
- Emergency services
- Hospitalization
- Laboratory services
- Mental health care
- Outpatient care
- Pediatric services
- Pregnancy and maternity care
- Prescription Drugs
- Preventative Care
- Rehabilitative services
Types of Health Insurance Available Under Obamacare
Off-Exchange major medical health insurance
Off-Exchange major medical health insurance plans are generally not eligible for subsidies. Under Obamacare, people who do not qualify for or want a subsidy, but who want to avoid the tax penalty, can buy major medical health plans that meet ACA coverage standards on or off of government-run state exchanges. For 2021, eHealth reports that unsubsidized eHealth shoppers were quoted the following prices on average:
- Premiums: $450 per month for individual coverage or $1,157 for family coverage
- Deductibles: $4,490 per year for individual coverage or $8,620 for family coverage
On-Exchange Qualified Health Plans
People who qualify for and want to use a subsidy to pay for a Qualified Health Plan (QHP) can research QHP plan data on some private exchanges and enroll in a plan if the private exchange meets the federal requirements for qualified health plans. In some states, consumers can do this online, while in others a person may have to help you enroll offline. You can also purchase a qualified health plan through your state’s government-run health insurance exchange or marketplace
Catastrophic level health insurance plans
Catastrophic plans are ACA-compliant health insurance plans primarily intended for people under age 30, and they cannot be purchased with a subsidy. Those who buy a catastrophic plan will not have to pay tax penalties for being uninsured, if they meet certain hardship exemptions, but their plans only provide the bare minimum benefits allowed under the law.
Cost of Catastrophic plans purchased through eHealth for the 2017 open enrollment period:
- Average premium: $173 per month
- Average deductible: $7,148 per year
Supplemental plans
Many consumers want benefits beyond what’s provided in a major medical health insurance plan. Benefits like life, dental, vision, critical illness, and accident insurance are a popular part of benefits packages offered by employers and are available for individuals on private exchanges. Some government exchanges may offer some of these products as well.
Gap (short-term) health insurance
The Affordable Care Act allows people to be uninsured for no more than two consecutive months without being subject to a tax penalty. The ACA also creates new enrollment periods when a person can enroll in major medical insurance. Outside of an enrollment period, people may have to wait to get coverage. Gap insurance products like short-term medical insurance may be helpful if you need limited coverage outside of the enrollment window.
Cost of short-term health insurance plans purchased through eHealth in 2018:
- Average premiums in markets for both 12 and 6-month options: $88 for 6-month or $107 for lowest-cost 12-month plan