The Affordable Care Act, also known as ACA or Obamacare, is a health care coverage act from the Obama Administration. President Barack Obama signed the act in March of 2010. Since then, the ACA is a hotly debated topic in homes and on news stations. However few people understand the purpose and the full extent of the bill. This week and next week we are breaking down Affordable Care Act basics. Read on to learn what the federal poverty level is, the purpose of the Affordable Care Act, and other basics.
Federal Poverty Level
When it comes to the Affordable Care Act, there are many references to the “federal poverty level” (FPL). But what is that really? The FPL is an exact dollar amount that the Department of Health and Human Services calculates every year. FPL represents the minimum amount of income that an individual or family needs to cover the necessities of life, including shelter, food, clothing, and transportation.
The government uses FPL to determine your eligibility for government benefits. For example, take Tom. Tom is a single man who lives alone, and his annual income is only $17,000. For a single person, 138% FPL is $17,609. Tom makes below 138% FPL so he qualifies for Medicaid if his state has wider Medicaid coverage.
Income Under 100% FPL
You likely do not qualify for Medicaid from income, nor do you qualify for a Marketplace insurance plan.
Income Under 138% FPL
If your state expands Medicare coverage, you qualify for Medicaid from your income.
Income 100% to 400% FPL
You qualify for government subsidies that lower your monthly premium so you can access a Marketplace insurance plan.
The Big Picture
The Affordable Care Act has three primary purposes that the entire act revolves around. All of the provisions and the design of the act exist to meet those purposes. If you want to understand the ACA, it is essential to understand these big picture goals.
Firstly, the ACA addresses an issue that gives much cause for concern in America – how many people have no health insurance coverage. At the time of the signing, over 46 million Americans are without health insurance.
The focus is especially heavy on families who are at or just above the poverty level. The government provides subsidies that keep costs as low as possible.
Medicaid provides health insurance coverage for low income people, including families. Both the state and federal government fund Medicaid, which causes some issues when the federal government tries to expand it.
Nevertheless, expanding Medicaid is one of the big goals of the ACA. Ultimately, they want Medicaid to cover all adults with income under 138% of the federal poverty level. Find out more about those exact numbers here.
Finally, the ACA strive to support innovative ways to deliver medical care. Especially those innovations that lower the cost of health care.
Come back next week to learn more about the ACA, including key federal provisions as well as how the law protects you.