Understand the Basics

How Does Health Reform Work?

The Affordable Care Act, the law commonly known as health reform, passed in 2010 and aims to make health care available to all Americans. It's a complex law, but here's a summary of how it works:

Everyone, with a few exceptions, is required to have health insurance. Health insurance is based on the idea of sharing costs across a large group of insured people.

People who choose not to buy health insurance must pay a penalty, or fee, each year. They must also pay for the costs of all their health care.

Most health insurance plans include certain essential benefits, like preventive care with no cost-sharing and coverage for pre-existing conditions.

Ways to Get a Health Insurance Plan

Large Companies


Large companies (50 or more employees) typically offer health insurance plans to employees. Many also help pay for these plans. For people who work in large companies, getting insurance through their employer is often the easiest way to get a plan and likely the best option.

Small Businesses


Small businesses (fewer than 50 employees) may also provide health insurance to their employees – and some do this already.

Health Insurance Marketplaces


Health insurance marketplaces, or "exchanges," are a way for people to shop for and buy health insurance, which may be referred to as a health plan.

Each marketplace is divided between individual (for families and individuals) and SHOP (health plans for small employers) marketplaces.

Insurance Companies


Insurance companies can sell plans through employers or directly to people – just as they have done in the past. They can also sell approved plans through the Marketplaces.

Small employers and individuals can purchase insurance from a health insurer, such as UnitedHealthcare, or through a broker. They also can purchase insurance through a Marketplace with the help of a broker or specially trained people, called Navigators, who provide helpful information to individuals and small businesses looking for health insurance in the Marketplaces.

Getting Health Care

Health Care Providers


Health care providers such as doctors, hospitals and clinics are encouraged to provide cost-efficient, quality care. These health care providers may get paid more when they provide care that improves patient health, and less when they don't. As a result, providers are finding ways to become more efficient by adding technology, streamlining processes, and coordinating care more effectively.

Role of Government

Marketplaces


The marketplaces are set up and run either by the state, the federal government, or both together.


Taxes and fees

Taxes and fees paid by employers to help offset the costs of health reform. Insurance companies, drug makers, medical device makers, and others also pay taxes and fees to help offset the cost.