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Can Americans overseas apply for insurance coverage through the Affordable Care Act?

The Affordable Care Act, also informally known as "Obamacare," is an attempt to reform the American healthcare system in order to expand coverage to millions of currently uninsured Americans and rein in the soaring cost of healthcare in the US.

The Affordable Care Act is not a federal entitlement program like Medicare, Medicaid or unemployment insurance. You cannot “enroll” in Obamacare. It is not a single payer system that many of you have enjoyed while living abroad. You can only buy private insurance more efficiently. To be eligible for coverage you must be resident in the United States and must be a US citizen or national (lawfully present).  See more on eligiblity here:

The Affordable Care Act hopes to rein in the cost of health insurance by providing a more structured efficient marketplace than existed before. Every State now has its own “exchange” or Internet marketplace for its own State registered insurance companies. If you live in Illinois, you can’t buy insurance from an Indiana insurance company. 


Tax Penalty for lack of insurance coverage. Does it apply to Americans overseas?

Another feature of the Affordable Care Act is a mandate to acquire insurance or pay a tax penalty. US residents pay a tax penalty if they can’t show proof of insurance. This is the only way the risk pool adds up to affordable care. However, Americans who are bona-fide residents overseas are presumed to have minimum essential coverage and as such do not have to pay a tax penalty.

So, for those moving abroad, the health insurance policy you own will determine if it has any value to you abroad. This information would be found in your policy details. For those moving back to the US, you will have to purchase insurance in the State where you establish residency and you’re good to go (so to speak). The Affordable Care Act has helped solve some of the lingering insurance issues such as pre-existing conditions. With the Affordable Care Act individuals can no longer be denied coverage based on pre-existing conditions. Also, dependents (children) can remain on their parent's policy up to the age of 26.

For more detailed information on the Affordable Care Act see the government’s website at:


The Affordable Care Act and increased taxes for Americans overseas: Net Investment Income Tax (NIIT)

The Affordable Care Act includes an additional Medicare tax in the form of a 3.8% Net Investment Income Tax (NIIT) on some net investment income of individuals, estates, and trusts that have income above the statutory threshold amounts. Individuals are subject to the NIIT if they have 1) Net Investment Income and, 2) Modified Adjusted Gross Income (“MAGI”) over certain applicable thresholds. Even if you are exempt from Medicare taxes, you may still be subject to the NIIT.


Filing Status


Married filing jointly


Married filing separately




Head of household (with qualifying person)


Qualifying widow(er) with dependent child



Be sure not to overlook this new tax as Americans abroad who fall into the categories referred to will owe the tax to the US since foreign tax credits are not applicable against this tax. This is due to the way the tax code is structured. (/us-tax-code-niit-3-point-8.pdf)

This new tax leads to double taxation of those Americans resident abroad since foreign tax credits cannot be applied against this tax due to a simple drafting technicality. ACA, Inc. has urged Congress to apply tax fairness on Obamacare and to allow foreign tax credits against the additional Medicare tax: December 2013 ACA, Inc. Press Release

Complete information on the NIIT tax can be found here:


This ACA webpage about the Affordable Care Act was update in July 2019.