Affordable Care Act

The Affordable Care Act (ACA) – formally known as the Patient Protection and Affordable Care Act and often referred to as Obamacare – is the landmark health care legislation passed by Congress during  the Obama Administration in 2010.

Some of the major components of the ACA included:

  • Reforms to insurance plans sold on the individual market, including prohibiting pre-existing condition exclusions, ending annual and lifetime benefit caps, preventing insurers from dropping coverage for those who become ill, and requiring coverage of a set of essential benefits in most cases;
  • Reforms to expand coverage and make coverage more affordable and accessible, including the creation of new health insurance marketplaces for consumers to compare and purchase coverage; premium subsidies and cost-sharing reductions to help cover the cost of insurance for those with incomes from 100 to 400 percent of the federal poverty level, and the expansion of Medicaid for adults with income below 133 percent of the poverty level;
  • Requirements that most individuals must have health coverage or be assessed an annual fee (the individual mandate) and that most employers with over 50 full-time employees must provide coverage or be assessed a per-employee fee (the employer mandate). Congress repealed the penalty associated with the individual mandate effective in 2019;
  • A series of initiatives aimed at reducing health care costs and improving health care quality, including bundled payments and Accountable Care Organizations.

The ACA also included extensive provisions aimed at improving health quality and system performance, promoting wellness and prevention, and curbing rising health costs.   

To pay for the provisions that expanded coverage, the ACA reduced certain provider payments and imposed a set of new taxes, some of which Congress has since suspended or repealed (the medical device tax, “Cadillac tax” and health insurance tax, effective in 2021).

Under the ACA, the number of uninsured Americans plummeted from 44 million in 2013 to 27 million in 2016. Since 2016, the uninsured rate has risen as Congress has rolled back some ACA provisions and the Trump Administration has severely curtailed outreach and enrollment efforts.