What is The Affordable Care Act?
The Affordable Care Act (ACA), officially called The Patient Protection and Affordable Care Act (PPACA) and sometimes called ObamaCare, is a US law that reforms both the healthcare and health insurance industries in America.
The PPACA was signed into law by President Barack Obama on March 23, 2010, and upheld by the Supreme Court on June 28, 2012. Despite many repeal attempts and a few other major court cases, the ACA is still the “law of the land” today. That means lower costs on coverage, new benefits, and a few new taxes. We explain below.
What Does the Affordable Care Act Do?
The law aims to increase the quality, availability, and affordability of private and public health insurance to over 44 million uninsured Americans through its many provisions, which include new regulations, taxes, mandates, and subsidies. The law also works toward curbing the growth in healthcare spending in the US, which has been rising at an unsustainable rate.
UPDATE MARCH 2017: House Republican’s have unveiled an official ObamaCare repeal and replace plan and Trump has said he generally supports it. Learn more about “The American Health Care Act”, the ObamaCare Repeal and Replace plan. It doesn’t include everything Trump promised, but it does touch on most of his “TrumpCare” as found on DonaldJTrump.com.
Who is ObamaCare Facts?
Obamacare facts is an independent website dedicated to helping America understand ObamaCare (the Affordable Care Act) and the Health Insurance Marketplace. Our goal is to present fact-based information and take an honest look at how the healthcare law is affecting America. Our goal is to help our readers understand the law, not to promote policies and politics. The quality of information on this site is important to us – if you feel any information is inaccurate, misleading, or missing, just let us know.
We have no relation to HealthCare.Gov, the official Marketplace, and we have no relation to insurers. Our focus isn’t on dollars or sign ups or an agenda; our focus is on America and healthcare. This gives us a unique ability to provide tips and tricks and honest advice that you wouldn’t be able to find elsewhere. Also importantly, it helps give every American a way to ask questions and express their opinions.
Below you will find an overview of what the new healthcare law does to reform healthcare and health insurance in the US. Please explore our site for detailed information on the Affordable Care Act’s many provisions, and for lots of helpful ObamaCare facts.
NOTE: We don’t have direct relationships with insurers, but we do have ads on our site (like the rest of the internet). We have specifically weeded out any companies “selling leads,” and focus on what we consider to be the brokers who use “best practices.” Our goal is to protect consumers and ensure everyone has a good ACA experience regardless of how they shop. Read more about getting health insurance quotes here.
Please help us educate everyone about health care reform by spreading the facts about the Affordable Care Act and the Health Insurance Marketplace. What is the Health Insurance Marketplace?
Is ObamaCare Working?
Each of the law’s many provisions have had varying degrees of success with some exceeding expectations, others drawing criticism, and others getting legislative changes. Despite the mixed sentiment, the uninsured rate is at a long-time low and under the ACA, health care spending grew at the slowest rate on record (since 1960). Meanwhile, health care price inflation is at its lowest rate in 50 years.ObamaCare is the unofficial name for the Patient Protection and Affordable Care Act (PPACA), although it’s sometimes called the Affordable Care Act (ACA) for short. Get more ObamaCare facts.
What Else Does ObamaCare Do?
Let’s take a look at some of the specific things ObamaCare does to reform the American healthcare system and how these reforms can benefit you, your family, and your business.
First, ObamaCare includes new benefits, rights, and protections that:
• Prohibit insurance companies from dropping your coverage if you get sick or make an honest mistake on your application.
• Eliminate pre-existing conditions and gender discrimination as reasons to decline coverage or raise rates so that you can’t be charged more based on your health status or gender.
• Let young adults stay on their parents’ plans until age 26.
• Close the Medicare Part D ‘donut hole’ and keep Medicare strong for years to come.
• And a great deal more.
Secondly, ObamaCare includes provisions to expand coverage and make it more affordable by:
• Creating Health Insurance Marketplaces where low-to-middle income Americans can compare plans and get lower costs on health insurance. There are three ways to get lower costs on the marketplaces: Tax Credits for lower premiums, Cost Sharing Reduction subsidies for lower out-of-pocket costs, and Medicaid. Cost assistance is only offered through your state’s marketplace or on the official Health Insurance Marketplace, HealthCare.gov.
• Expanding Medicaid to 15.9 million Americans to help “cover the gap” between those who qualify for cost assistance through the marketplace and those who qualified for Medicaid under previous Medicaid guidelines.
• Mandating large employers to provide coverage via the employer mandate and providing tax credits for small businesses who offer their workers coverage via the Small Business Health Options Program (SHOP).
In return for the new benefits and expanded coverage:
• ObamaCare mandates that everyone who can afford it must obtain and maintain health insurance (known as minimum essential coverage) throughout the year starting in 2014, get an exemption, or pay a per-month fee on their year-end Federal income taxes.
• Coverage can only be obtained during an annual open enrollment period. Annual open enrollment periods vary by insurance type.
We’ve only just scratched the surface:
• In the years since it’s become a law, the Affordable Care Act has already made a big difference in our country by providing new rights and protections to more than 100 million Americans and has helped to reduce the uninsured rate.
• The above is only a portion of what the law does. See other new benefits, rights, and protections, get a summary of each provision in the Patient Protection and Affordable Care Act, read the full text of the Affordable Care Act for yourself, or browse our site to find out more about the countless other things ObamaCare does.
Why Is It Called ObamaCare?
The Patient Protection and Affordable Care Act was nicknamed “ObamaCare” due to it being promoted by President Barack Obama. The term started becoming common back in 2009 (before the final legislation was even in place) and was widespread by the time the law was signed on March 23rd, 2010.
Although it was originally used as a pejorative term meant to pit opponents of the President against the law, the President and supporters of health care reform have since embraced it, but the term remains politically charged. It is interesting that, when polled, more people support the Affordable Care Act than ObamaCare, despite them being the same thing.
Like “HillaryCare” in the 90’s or “RomneyCare” in Massachusetts, “ObamaCare” is a simple name for a complex issue. Get more Obamacare Facts on health care reform under the Affordable Care Act.
The History of ObamaCare
The concept behind ObamaCare is an individual mandate to obtain insurance, coupled with subsidies for private insurance. The Heritage Foundation, a politically conservative think tank, first presented the concept. Their idea was that this was an acceptable alternative to the single-payer initiative, “Medicare for All,” being proposed by the Clinton Administration. Since then, health care reform was proposed and expanded by both parties until it was implemented in Massachusetts by then-Governor Romney. During the 2008 elections, health care reform became a major issue on the Democratic Party platform.
The Patient Protection and Affordable Care Act
When Barack Obama became president, he began trying to pass the 2009 Affordable Health Care for America Act. This was followed by The Patient Protection Act, which developed into the Patient Protection and Affordable Care Act 2010 (PPACA), or for short, “the Affordable Care Act” (ACA). After several changes, President Barack Obama signed the Affordable Care Act into law on March 23, 2010.
The Health Care and Education Reconciliation Act
Other, less-discussed aspects of ObamaCare are the health care related sections of the Health Care and Education Reconciliation Act of 2010 and the Student Aid and Fiscal Responsibility Act, which were signed into law along with the Patient Protection and Affordable Care Act. The PPACA itself also includes amendments to many existing U.S. laws and includes new rules and regulations called for by the law but written afterward.
Does ObamaCare Require Me to Purchase Health Insurance?
You must obtain and maintain minimum essential coverage throughout the year, get an exemption, or face a tax penalty for each month you go without coverage. In the individual and family market, major medical coverage that counts as minimum essential coverage can only be purchased during open enrollment. Open enrollment for 2016 was November 1, 2015, to January 31, 2016. Open enrollment for 2017 is November 1, 2016, to January 31, 2017.
In most cases, if you already have health insurance you like, you can keep it (although some plans will be phased out by 2017, see grandfathered health plans). For many low to middle-income Americans, insurance is more affordable due to cost assistance and Medicaid Expansion. However, those making above 400% of the federal poverty line may find themselves paying more for coverage and may want to see private health plan options outside the marketplace. Regardless of what you pay, we all enjoy the new benefits, rights, and protections offered by Obamacare.
Open Enrollment Under the Affordable Care Act
Under the Affordable Care Act, most private insurance must be obtained during the marketplace’s annual open enrollment period. Open enrollment periods protect insurers from people who wait until they get sick to buy coverage, and help enforce the mandate and keep premium costs down. You won’t be able to get most types of private coverage outside of open enrollment without qualifying for a special enrollment period. Other insurance plans like Medicaid and CHIP (which remain open all year) have their own open enrollment periods.
To comply with the law for 2014, you needed to get coverage that started by May 1st, 2014, to avoid the fee. Open enrollment for 2017 begins November 1, 2016, and ends January 31, 2017. You need to get covered during open enrollment and maintain to coverage throughout the year to avoid the per-month fee for that year.
If you miss the annual open enrollment period or suddenly become insured before enrollment, you may still have options. Individuals may qualify for special enrollment periods outside of open enrollment if they experience certain qualifying life events. Learn what to do if you missed the ObamaCare deadline.
ObamaCare Doesn’t Create Insurance
ObamaCare (The Affordable Care Act) doesn’t create private or public health insurance; it expands and improves public health insurance options like Medicaid and Medicare. The ACA also creates a subsidized and regulated marketplace where Americans can buy private health insurance using group buying power.
Although the expansion of Medicaid and cost assistance (both of which are subsidized by taxpayers) has been criticized for being “handouts to those who don’t want to work,” that criticism is mostly unfounded. The truth is, most of the newly insured are working, low-income families who couldn’t previously afford health insurance and people with pre-existing conditions who were previously “uninsurable” or priced out of insurance. Those who cannot or don’t want to work already had access to Medicaid in most cases. It’s myths and half-truths like these that inspired us to create this facts site.
ObamaCare Health Insurance Exchanges (Marketplaces)
Under the Affordable Care Act, every legal resident of the United States of America will be able to shop for health insurance in his or her state’s online Health Insurance Marketplace (sometimes known as an exchange). The “ObamaCare Exchanges” are online marketplaces where Americans can shop for regulated health insurance, and low-to-middle income Americans can get cost assistance.
Using the marketplace, any American can research every available policy and choose the right one for them and their family. The cost of health insurance through the marketplace depends on income, so only those making less than 400% of the Federal poverty level will be able to use cost assistance to obtain free or low-cost health insurance. If you have access to affordable employer-based coverage, you won’t be able to get cost assistance. If you are eligible for Medicare, you can’t buy a private insurance policy, except as a Medicare supplement, and won’t use the marketplace to get coverage.
HealthCare.Gov is the official Health Insurance Marketplace. Make sure to shop during open enrollment for cost assisted coverage that will protect you from the per-month fee for not having minimum essential coverage.
Marketplace Health Plans
There are four types of “metal plans” (bronze, silver, gold, and platinum) available on the marketplace, as well as a catastrophe only plan for those under 30 and those who had their plan canceled due to the ACA. You can also use the marketplace to sign up for Medicaid and CHIP. Medicare and other health insurance programs are signed up for separately. You can still buy private insurance through a broker or directly from a provider. See how to buy health insurance for more details on your options for obtaining coverage or look at our guide on signing up for health insurance to find out what your sign-up options are.
What Will ObamaCare Cost Me?
ObamaCare (the Affordable Care Act) contains new taxes, including a fee for not obtaining insurance, as well as tiered cost assistance based on income. For those who get cost assistance, coverage will cost between 0%-9.5% of income for the cheapest plan. People without access to cost assistance may end up paying more. This is due in part to ObamaCare’s new rights and protections, and in part, to the ever-rising costs of premiums.
The bottom line is that, while the ACA aims to give more people access to affordable, quality health insurance and does succeed in many ways, some people will end up paying more. In general, the less you make, the less you pay. Regardless of if you will pay more or less, the health insurance you will receive has new benefits, rights, and protections, which make it much higher quality health insurance than most people would have received without the ACA. Under the new laws, your plan can no longer drop you when you get sick, drop you when you use it too often or deny you coverage for being sick in the first place.
As for our costs as a country and the costs beyond health insurance, the Affordable Care Act does address the growing cost of health care, but its main focus is on reforming and expanding health insurance coverage. Unless we as a nation address the root causes of health care costs in a meaningful way, the costs and taxes associated with healthcare will continue to put a burden on Americans regardless of the law. Check out our health care facts to understand more about why we need to reform not only health insurance but also health care spending.
ObamaCare Medicare Reforms
ObamaCare cuts $716 billion (gross) in Medicare and Medicare Advantage spending and reinvests it back into both Medicare and other aspects of the Affordable Care Act.
The Affordable care Act provides a many improvements to coverage for seniors, although it does include some budget cuts. Some major reforms include closing the Medicare Part D “donut hole,” and providing better quality preventive services to seniors. Read More On Obamacare and Medicare and How it affects seniors.
ObamaCare Medicaid Reforms
ObamaCare Medicaid Expansion expands Medicaid to 15.9 million of our nation’s poorest, including 9 million children, by expanding CHIP (Children’s Health Insurance Program). However, this aspect of healthcare reform is in jeopardy in some states due to the right of individual states to opt out of Medicaid expansion. Twenty-six States have opted out of Medicaid expansion leaving more than 5.7 million Americans without proper healthcare. Find out more about ObamaCare Expanding Medicaid.
ObamaCare Repeal Attempts Change the Law
The Republican Party has tried to repeal ObamaCare more than 50 times. Since ObamaCare was upheld by the Supreme Court and Barack Obama was sworn into office for a second term, the Affordable care Act has become “the law of the land,” albeit with some major changes made by the Supreme Court ruling. Some of the changes include states being able to opt out of expanding Medicaid to cover the poorest residents, and the ruling of the individual mandate’s “shared responsibility fee” as a tax.
Since the NFIB lawsuit, additional lawsuits have changed other aspects of how the law works and what the fate of the law could be moving forward.
States Opting Out of Medicaid Expansion
Under Medicaid expansion, states had the opportunity to expand Medicaid eligibility to everyone making less than 138% of the federal poverty level. In states that did not expand coverage, 5.7 million people will remain uncovered due to narrow eligibility guidelines used by those states.
States Opting Out of Creating Marketplaces
When the law was written, it was assumed that all states would create their own Health Insurance Marketplaces. However, many states chose to give up this right and give the Federal Government the right to run their marketplace. The Federal Government’s marketplace then became the official marketplace healthcare.gov.
While the law allowed states to ask the Federal Government run their sites, the specific wording of the law states that the Affordable Care Act authorizes federal subsidies for health coverage obtained on an “Exchange established by the State under section 1311.” This has led to several court cases that charge that subsidies should be illegal in states that transferred the process of setting up their marketplaces to the Federal Government.
Is ObamaCare Socialized Healthcare / Health Insurance?
The idea that ObamaCare is socialized healthcare or socialized health insurance is a myth. In socialized healthcare, all health care workers work for the federal government, and all the hospitals and clinics are owned by the government (public healthcare delivery). Socialized health insurance means the government uses public healthcare funding to run the health insurance industry. The American healthcare and health insurance systems, both before and after the Affordable Care Act, are best described as uniquely American, mixed-market approaches to healthcare and health insurance, which use combinations of public and private funding and delivery methods. Health insurance (aside from government programs like Medicare and Medicaid) and health care providers are not socialized and are for-profit companies.
You can read more about other myths and talking points on our ObamaCare myths page.
What Else Does ObamaCare’s Health Care Reform Cover?
ObamaCare works to provide quality healthcare for more Americans at more affordable rates. Health care reform under the Affordable Care Act is the most significant overhaul of the health care industry in decades, covering every aspect of healthcare including mental heath, care for seniors, children’s health, women’s health, and care for our nation’s most needy people. ObamaCare also provides drug coverage, free preventive care, check-ups for children, and has instituted countless other unprecedented reforms to the American healthcare system. ObamaCare is not perfect, and it isn’t free. It doesn’t necessarily even make health insurance affordable to every American, but it does a lot to expand the average American’s health care rights. As in any law, compromises have had to be made in order for the law to be passed by the legislature, signed by the President, and ruled on by the Judiciary. To find out more ObamaCare Facts, check out the Benefits of ObamaCare (the Affordable Care Act) and our guide to the health insurance marketplace.
ObamaCare Facts: Dispelling the HealthCare Myths