A 2010 law that enacted the most significant regulatory overhaul of the American healthcare system since passage of Medicare and Medicaid in 1965. It is also referred to as the Affordable Care Act (ACA) or as “Obamacare.”

Following are the highlights of the PPACA.

Health insurance market reforms: Among the reforms include: (a) health insurance policies are barred from having annual or lifetime coverage limits; (b) insurers must cover all applicants, with new minimum policy standards, and offer the same rates regardless of preexisting conditions or gender; (c) those with preexisting conditions cannot be denied coverage; (d) health insurers may not drop insureds who develop a medical condition; (e) parents with children up to the age of 26 can cover them under their own policies.

Individual mandate: Everyone in the United States must purchase health insurance or pay a penalty to the Internal Revenue Service (IRS) on their income tax return. Exemptions will be granted for financial hardship, religious objections, American Indians, prison inmates, those without coverage for less than 3 months, undocumented immigrants, people with incomes below certain tax filing thresholds (currently $9,500 for individuals and $19,000 for married couples), and those for whom the lowest cost plan option exceeds 8 percent of household income.

Medicaid expansion: As of 2013, every state has different Medicaid eligibility requirements based on income, age, gender, dependents, and other specific requirements. Starting in 2014, states have the option, but not the obligation, to expand Medicaid eligibility levels to 138 percent of the federal poverty level (FPL). The expansion covers the gap for those who earn too much to qualify for Medicaid but not enough to qualify for subsidies available under the individual mandate.


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