What is Obamacare?


” ACA ” is another term for the Patient Protection and Affordable Care Act of 2010. This plan aimed to lower costs for those that couldn’t afford health care, making it more affordable for all.

The Key Takeaways

  • The Patient Protection and Affordable Care Act of 2010 is also known as “Obamacare”.
  • By lowering costs, and increasing coverage, the plan was designed to make health insurance more affordable.
  • Among other provisions, ACA required insurance companies to include 10 essential benefits and gave states the option of expanding Medicaid coverage.


Obamacare: Definition and Examples

Obamacare is also known as the Patient Protection Affordable Care Act (ACA). The majority of people believe it is only about health insurance. However, it has affected the U.S. health care system in general. Critics of former President Obama’s health reform efforts coined the term “Obamacare”, but it stuck.

Before the ACA, insurance companies could exclude people with pre-existing conditions. Before the ACA, for example, insurance companies were able to exclude people who had pre-existing health conditions. 1 This meant that people with high medical costs sometimes ended up without insurance, or with a policy which did not cover them. They couldn’t afford to go to the doctor regularly, so they ended up in emergency rooms.


Obamacare makes it possible for people with pre-existing health conditions to receive preventive healthcare. This reduces hospital visits and lowers the cost of care.


What Obamacare is and How it Works

The ACA was designed to reduce the cost of health insurance by making it more accessible and affordable for those who needed it most. In addition, the act required that everyone carry health insurance. This provision expired in 2019.

The ACA also aims at making health insurance more affordable to those with lower incomes through subsidizing costs. Medicaid has been extended to those earning up to 138% federally defined poverty level. However, as of 2022 12 states will not be expanding Medicaid. This will limit access for their residents. The states, located mainly in the South are:

  • Alabama
  • Florida
  • Georgia
  • Kansas
  • Mississippi
  • North Carolina
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Wisconsin
  • Wyoming3

The poverty level is usually adjusted each year in order to keep pace with inflation. Tax credits are given to those who earn more than the Medicaid threshold if they make less than 400%.


Do I Have to Pay a Fine?

In order to ensure that insurers could add patients with preexisting conditions to their plans, the ACA required at first that everyone have health insurance coverage for nine out of 12 months or face a tax.

The Tax Cuts and Jobs Act was passed by Congress in December 2017. The penalty does not apply to tax years beyond 2018. Before that, many groups petitioned Congress to be exempted from Obamacare . 5 8

By removing the mandatory mandate, Congress forced insurance companies to accept patients with pre-existing medical conditions, while potentially removing healthy patients. This increased costs for insurance companies. The subsidies are still in place and Congress ensured that the government would cover a portion of the costs.


How much are Obamacare taxes?

Obamacare taxes still apply even though the mandate is no longer in effect:

  • If your income exceeds $200,000 per annum: In 2013, taxes increased for individuals earning more than $250,000 per annum or $200,000 for married couples.
  • You’re a small business owner. Provide insurance to 95% or more of your full-time workers or you will be fined.


Get Obamacare

You can still take advantage of parts of the ACA that are working, even though Congress has cut one leg.

Health Insurance Exchanges

Enrollment in the health insurance exchanges is open from November 1 to January 15 of each year. You can still use the exchanges if you miss the enrollment window to apply for Medicaid or buy temporary private insurance. They can also be used to compare future plans. 10


Some exchanges run by the state, while others are managed by the federal government. Compare all costs including monthly premiums and annual deductibles. Also compare the percentage of coverage, copayments, and any other fees.


What is covered by Obamacare?

The ACA requires that insurance plans include children up to the age of 26 on their policies and offer 10 essential services.

  1. Visits for preventive care and wellness, including chronic disease management
  2. Maternity care and newborn care
  3. Treatment for mental and behavioral disorders
  4. People with disabilities or injuries can benefit from services and devices that help them.
  5. Lab tests
  6. Pediatric care
  7. Prescription drugs
  8. Outpatient care
  9. Emergency room services
  10. Hospitalization1112


FAQs (Frequently Asked Questions)

Who qualifies for Obamacare?

Obamacare is a comprehensive health care law that affects almost everyone. Under Obamacare, for example, children up to the age of 26 can use their parents’ insurance.


When does Obamacare open enrollment begin?

Open Enrollment for Marketplace Coverage occurs towards the end of the calendar. The open enrollment period begins on November 1 and ends January 15. Enrollment during this time will provide coverage for the calendar year following.

the authorAaron Krause

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