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 allowing children to remain on their parent’s insurance through age 26; 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 Congress repealed the penalty associated with the individual mandate effective in 2019;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the ACA reduced certain provider payments and imposed a set of new taxes, some of which Congress has since suspended or repealed (the medical device tax, “Cadillac tax” and health insurance tax).
Under the ACA, the number of non-elderly uninsured Americans plummeted from 44 million in 2013 to 28 million in 2016. For the next few years, as Congress rolled back some ACA provisions and the Trump Administration severely curtailed outreach and enrollment efforts, the number of uninsured rose back to 32.8 million in 2019. Despite the economic downturn that accompanied the first wave of the Coronavirus, the number of uninsured dropped by close to 3 million in 2020.