The ACA, short for the Affordable Care Act, is a federal health care reform law signed in March 2010. Its official name is the Patient Protection and Affordable Care Act, though most people know it as “Obamacare.” The law reshaped how Americans buy and use health insurance by expanding coverage to millions of people, banning discrimination based on health status, and creating government-run marketplaces where individuals can shop for plans and receive financial help paying for them. As of the 2025 enrollment period, 24.3 million people selected or were automatically re-enrolled in a marketplace plan.
The Three Core Goals of the Law
The ACA was designed around three primary objectives. First, it aims to make health insurance affordable for more people by offering premium tax credits (essentially subsidies) that reduce monthly costs for households earning between 100% and 400% of the federal poverty level. Second, it expanded Medicaid, the government health program for low-income Americans, to cover all adults earning below 138% of the federal poverty level. Third, it supports new approaches to delivering medical care that are intended to bring down health care costs overall.
Not every state has embraced all parts of the law equally. As of 2025, 41 states (including Washington, D.C.) have adopted Medicaid expansion, while 10 states have not. In states that haven’t expanded Medicaid, some lower-income residents fall into a coverage gap where they earn too much for traditional Medicaid but too little to qualify for marketplace subsidies.
Pre-Existing Condition Protections
Before the ACA, insurers could deny coverage or charge higher premiums to people with health conditions like diabetes, asthma, or a history of cancer. The law eliminated that practice entirely. No marketplace plan can reject you, charge you more, or refuse to pay for treatment based on any condition you had before your coverage started. This applies whether you’re managing a chronic illness, recovering from a past surgery, or pregnant at the time you apply. Medicaid and the Children’s Health Insurance Program (CHIP) follow the same rules.
Once you’re enrolled, your plan cannot raise your rates based on your health. The only factors insurers can use to set your premium are your age, where you live, tobacco use, and the plan category you choose. The one exception involves grandfathered plans, older plans that existed before the ACA took effect, which don’t have to follow some of these rules.
What Every Plan Must Cover
The ACA requires all marketplace plans to cover 10 categories of essential health benefits. These include doctor visits, inpatient and outpatient hospital care, prescription drugs, pregnancy and childbirth, mental health and substance use disorder services, rehabilitative services, lab tests, preventive care and chronic disease management, and pediatric services including dental and vision for children. Dental coverage for adults is optional, but for kids it’s built into every plan.
Preventive care is a particularly notable piece. Services like annual checkups, vaccinations, blood pressure screenings, and certain cancer screenings are covered at no additional cost to you, meaning no copay or deductible, as long as you use an in-network provider.
How the Plan Tiers Work
Marketplace plans are organized into four “metal” categories that reflect how costs are split between you and the insurer. The categories don’t indicate quality of care. A Bronze plan and a Platinum plan in the same area may use the same hospitals and doctors. The difference is purely financial.
- Bronze: The plan covers about 60% of costs, you pay 40%. Monthly premiums are the lowest, but deductibles are high. Best for people who rarely need care and want protection against worst-case scenarios.
- Silver: The plan covers about 70%, you pay 30%. A middle-ground option with moderate deductibles. Silver plans are also the only tier eligible for extra cost-sharing reductions (more on that below).
- Gold: The plan covers about 80%, you pay 20%. Deductibles are low, but monthly premiums are higher.
- Platinum: The plan covers about 90%, you pay 10%. The highest premiums but the lowest out-of-pocket costs when you actually use care.
Financial Help: Subsidies and Cost-Sharing Reductions
Two forms of financial assistance are available through the marketplace. The first is the premium tax credit, which directly lowers your monthly insurance bill. Your eligibility and the size of the credit depend on your household income relative to the federal poverty level. For most years, households earning between 100% and 400% of the poverty level qualify, though temporary expansions in recent years removed the upper cap for 2021 and 2022.
The second type of help is cost-sharing reductions, which lower what you pay out of pocket when you actually visit a doctor, fill a prescription, or go to the hospital. To get these savings, you must enroll in a Silver plan specifically. If you pick a Bronze or Gold plan, you can still use the premium tax credit, but you won’t receive cost-sharing reductions. For eligible enrollees, a Silver plan with extra savings can cover anywhere from 73% to 94% of costs (compared to the standard 70%), with deductibles dropping significantly. The lower your income within the qualifying range, the more generous the savings.
Staying on a Parent’s Plan Until 26
One of the ACA’s most widely used provisions allows young adults to stay on a parent’s health insurance plan until they turn 26. This applies to both marketplace plans and employer-sponsored insurance, and it holds true even if you’re married, have children of your own, are no longer in school, live in a different state from your parents, or have access to insurance through your own job. On a marketplace plan, coverage lasts through December 31 of the year you turn 26.
The Individual Mandate Today
When the ACA first took effect, it included a requirement that most Americans carry health insurance or pay a tax penalty, sometimes called the individual mandate or shared responsibility payment. That federal penalty was reduced to $0 starting in 2019, which means there is currently no federal tax consequence for going without coverage. A handful of states, including California, Massachusetts, New Jersey, and the District of Columbia, have enacted their own state-level mandates with penalties still in effect.
How to Enroll
Open enrollment for marketplace plans typically runs from November 1 through mid-January each year. You can apply and compare plans at HealthCare.gov if you live in one of the states that use the federal platform, or through your state’s own marketplace website if your state runs its own exchange. Of the 24.3 million people who enrolled for 2025 coverage, about 17.1 million came through HealthCare.gov and 7.2 million through state-based exchanges.
Outside of open enrollment, you can sign up only if you qualify for a special enrollment period, triggered by life events like losing other coverage, getting married, having a baby, or moving to a new state. Medicaid and CHIP enrollment, by contrast, is open year-round.