CSU Health Insurance Education Project

About the New Law

The Affordable Care Act (ACA), often referred to as ObamaCare, was approved by Congress and signed by President Obama in 2010. Its main provisions include:

  • A requirement that most Americans have insurance
  • A significant expansion of Medicaid (Medi-Cal in California) that opens Medi-Cal to low-income, single adults
  • Subsidies for the purchase of insurance for low- and many middle-income families; the lower the income the greater the subsidy
  • Insurance reforms that protect you the consumer by preventing insurance companies from refusing to cover pre-existing conditions (like asthma or diabetes) and from charging people more based on their medical experience or health status
  • Creation of new health exchanges (Covered California) through which financial assistance will be available to those who qualify
  • Young adults can stay on their parents' health insurance plan until age 26

Many of these reforms should prove particularly beneficial to low-income and middle-income students and their families. As the government will pay for a substantial amount of their insurance costs, low and middle income individuals and families will find insurance more affordable.

Requirement to Have Insurance

The new law requires most Americans to have insurance. Those who have incomes too low to afford the full costs of insurance will get financial assistance. There will be two main options for getting coverage with government assistance in this new system: through expanded Medi-Cal and through Covered California.

The requirement to have insurance is necessary to make the new system work. Without this requirement, those who could afford insurance but did not purchase it might be unable to pay their medical bills. The rest of us, who did buy insurance, would be left to pay the costs of those who didn't.

Under the new requirement, those who need it get assistance and everyone pays their fair share. There are no free riders.

Individuals who have very low incomes but make too much to be eligible for Medi-Cal, are exempt from the requirement.