Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Obamacare requires qualified health coverage
  • The Individual mandate imposes a penalty for no insurance
  • Eligible residents can get coverage through Obamacare marketplace
  • Open enrollment is the best time to buy insurance
  • Medicaid and CHIP can help low-income residents get coverage


Health insurance options include compliance with the Affordable Care Act or paying a fine. Failure or refusal will cause a tax penalty; the law imposes the individual shared responsibility payment on those without insurance.

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The options for compliance include exemptions, extensions, Medicaid, Medicare, and the Chip. Comparison shopping will help find the best value and the right features for an individual or family.

Overview of Insurance Options

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After the Affordable Care Act, most Americans must get and keep health insurance coverage. Thanks to the ground-breaking law, they have effective, affordable coverage options at all ranges of age, health, physical condition, and incomes.

Consumers can comply with the Affordable Care Act by purchasing any policy from the federal or state exchanges.

Plans purchased outside of the exchanges can also meet the mandate but will not have costs and financial assistance. Upper-income buyers can get a wider selection of plans by shopping outside of the Obamacare system. Low-income consumers can get no-cost coverage with Medicaid and the CHIP.

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Understanding the Individual Mandate

The Affordable Care Act requires nearly everyone to get and keep qualified health insurance. The insurance must have a minimum value and contain the essential health benefits. The insurance must be affordable and take no more than eight percent of the annual family income. The rules that carry out the Affordable Care Act provide exemptions from coverage if insurance is not affordable.

Applying the Mandate Penalty

The IRS will levy a penalty of one-twelfth of the total for every month without insurance. To determine the total, the IRS performs the below-described computation. The IRS takes one-twelfth of the greater of 2.5 percent of annual family income or (1) plus (2) up to(3). Where –

  • (1)is $695 per adult individual, plus
  • (2) at $347.50 per child, up to a maximum of
  • (3) a family total of $2,085.

Open Enrollment

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The open enrollment period is a critical aspect of health insurance options. Open enrollment is the time to renew, replace, and buy health insurance. It is the time when eligible persons have a right to buy insurance. After open enrollment period, one must find an exemption, exception, or extension.

Customers cannot buy Obamacare policies sold on federal and state exchanges after open enrollment. The exchanges have authority to provide financial assistance and premium tax credits.

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Missed Open Enrollment

After open enrollment period closes, the options are fewer. One can find an extension of the deadline and make a purchase on the marketplace or exchange. If one has a qualifying life event, then one can get a sixty-day window for buying new insurance.

Those with low incomes can qualify for Medicaid and the Children’s Health Insurance Program. Elderly and limited people may be eligible for Medicare. The below-listed items are options that meet the mandate after the open enrollment period.

  • Exceptions like life events give a new sixty-day period to buy insurance.
  • Exemptions mean that there will be no penalty for failing to meet the mandate.
  • Extensions add more days to the enrollment period; they come from federal and state government.
  • Medicaid and the CHIP do not have closed enrollments; qualified applicants can use these options at any time.
  • Medicare is always open to those eligible by disability or 65th birthdate. There are closed periods after the initial enrollment and before changes and additions such as prescription drugs benefits in Part D.

Qualifying by the Life Events Exception

Some changes in status require an opportunity t replace or buy health insurance. Some are simple such as moving out of the area served by the existing insurance policy. Others are more complex like losing coverage as a dependent on an employer-sponsored plan. A dependent can lose coverage because someone loses a job. The Life Events includes the below-listed items.

  • Divorce
  • Marriage
  • Birth or adoption of a child
  • Loss of coverage at age 26 on parent’s policy

Prevention and Wellness

The principles of the Affordable Care Act promote prevention and wellness as long-term solutions to rising medical costs in America. The reduction of costs will reflect a more important reduction in human suffering, disease, illness, and premature death.

Maintaining good health is far more effective than curing disease or treating illness.

Many prevention and wellness services have no additional costs to consumers. This feature encourages regular basic medical care including screenings, physical exams, and vaccines.

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Obamacare Policies

The federal marketplace and state exchanges provide access to affordable coverage. They also provide premium subsidies, Health Savings Accounts, costs reduction assistance, and relief from out-of-pocket expenses. Only policies purchased through the Obamacare exchange structures can get these valuable forms of financial assistance.

Obamacare policies require a minimum income level that is above the federal poverty line. The Medicaid expansion raised the income limit to 138 percent of the federal poverty line. Persons with incomes as high as 400 percent of the poverty line can get financial benefits from the Obamacare exchanges.

Qualified Health Insurance

The individual mandate requires coverage for 12 consecutive months by a qualified health plan. A qualified plan is one with at least the minimum value and ten essential health benefits. These standards limit the overall out-of-pocket costs and require a reasonable ratio of costs sharing.

Medicare

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Medicare options depend on physical and mental health and age. Medicare benefits can go to those with Social Security disability status before age 65. Medicare options begin at age 65. One can sign up during the initial enrollment period. One can sign for hospital care, medical insurance, Medicare Advantage plans, and Prescription drug coverage in Medicare Part A through D.

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Medicaid

Medicaid is the national program to provide medical care to low-income citizens and legal residents. In some states, the upper limit is below the federal poverty line. Restrictions on Medicaid help balance state budgets, particularly when they cut taxes on upper incomes and businesses.

The Affordable Care Act promoted Prevention and wellness by strengthening Medicaid.

However, loss of regular medical care can create far greater needs when treatable diseases grow into full blown severe conditions. For example, doctors can treat adult onset diabetes with medications or simple lifestyle changes. For some patients, it is preventable with diet, weight management, and exercise. When left untreated, diabetes can cause blindness, high blood pressure, organ failure, heart failure, and premature death.

Medicaid Expansion

Congress voted to increase the limit for Medicaid eligibility to erase the Medicaid Gap. Obamacare has a lower income limit; Medicaid has an upper limit. The income ranges in between comprise the Medicaid Gap. It consists of individuals and families with incomes too large for Medicaid and too small for Obamacare Marketplace policies. States run the Medicaid program using state and federal resources.

Some Republican leaders have refused to work with Medicaid expansion and have left millions of the most vulnerable Americans without life-saving medical care. They have also burdened existing medical care institutions with unpaid debts from those who need but cannot get Medicaid coverage.

CHIP

The Children’s Health Insurance Program protects children and young people up to teenage by providing medical and dental coverage. The CHIP meets the requirements of the Affordable Care Act for qualified health insurance coverage. It satisfies the individual mandate. The standards focus on need, and it is a vital safeguard for children’s health in America.

The program has no closed enrollment periods and admits qualified applicants year-round. This health insurance option is free or low-cost, and it is available after open enrollment period for Obamacare closes.

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Looking at the Insurance Options

The options for health insurance include plans purchased on or off the Obamacare marketplace that meet the requirements for qualified health insurance coverage. The top priority for most Americans will be to meet the requirements of the individual mandate and avoid the tax penalty for no insurance.

While all policies must meet legal standards to avoid the penalty, only those sold through the federal or state exchanges can provide premium assistance and other forms of costs reduction or financial aid.

Medicare, Medicaid, and the CHIP are important options for the elderly, low-income, and youth respectively. Whenever consumers select policies on Obamacare, it is vital to look beyond the price and premiums.

Enter your zip code in our FREE tool below to start comparing health insurance rates now!

Comparison shopping is an excellent tool for finding the best value in health insurance. Comparison shopping helps focus on the medical and cost concerns of the individual or family group.