Obamacare

What is Obamacare?

  • Obamacare – also known as the Affordable Care Act (ACA) or officially as the Patient Protection and Affordable Care Act – is a federal statute signed into law on March 23, 2010 by President Barack Obama. Most provisions of the law took effect in 2014.
  • The law was created to improve access to affordable, quality health insurance for all Americans. It dramatically changed the U.S. individual health insurance market by implementing provisions designed to make individual plans more affordable, while also improving the quality of coverage available to people who buy their own health plans.
  • Premium subsidies and cost-sharing reductions are provisions of the Affordable Care Act that keep coverage and out-of-pocket costs at an affordable level based on each applicant’s income. Congressional Democrats have long called for more robust subsidies, however, as the plans and out-of-pocket cost can still be unaffordable even with the subsidies. There have also been numerous proposals to do away with the income cap for premium subsidy eligibility (currently 400 percent of the poverty level), as this creates a “subsidy cliff,” particularly for older applicants and people in areas where health insurance is particularly high-cost.
  • The ACA’s major provisions began taking effect in 2014, although some had taken effect as early as 2010. By 2016, the Affordable Care Act had lowered the percentage of uninsured Americans from 16% to 8.9%, although the uninsured rate has been creeping upward since 2017.
  • The health reform battle that delivered Obamacare was driven by a dysfunctional U.S. healthcare system. Eighty-two percent of Americans said the system needed an overhaul.
  • Under the ACA, Americans who didn’t have minimum essential coverage between 2014 and 2018 had to pay the individual mandate penalty. That penalty was eliminated as of 2019, but there is still a penalty for being without minimum essential coverage in DC, New Jersey, California, Massachusetts, and Rhode Island (the individual mandates and non-compliance penalties in these states are roughly modeled on the ACA, but were established independently by each state).
  • The term Obamacare was originally coined by Republicans who opposed the legislation, but President Obama had embraced it by 2011, and the term is now used by both supporters and opponents of the law. There continues to be some confusion, however, among people who aren’t aware that Obamacare and the Affordable Care Act are the same thing.
  • Obamacare implemented a limited enrollment schedule for the individual health insurance market, much like the system that already existed for employer-sponsored health insurance. Coverage in the individual market is guaranteed-issue under the ACA (which wasn’t the case in most states prior to 2014), but enrollment is limited to an annual window (November 1 – December 15 in most states) or to special enrollment periods triggered by qualifying events.

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