Obamacare and the ACA: Facts To Help You Maximize Your Benefits

Here's How These Apply to You

Doctor and patient in conversation, looking at digital tablet.
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The Patient Protection and Affordable Care Act (ACA) was passed in 2010 as a way to make health insurance more affordable and more widely available. Also commonly known as Obamacare, the ACA made several significant changes to the way many people obtain, use, and pay for health insurance.

Key Takeaways

  • The Affordable Care Act streamlined health care for millions of people.
  • Some of the major changes of the ACA include eliminating annual and lifetime limits, allowing coverage for pre-existing conditions, and preventing companies from dropping coverage for sick people.
  • The ACA extends health care subsidies millions of Americans to help them afford coverage.
  • The law also funds scholarships for new providers, requires background checks for nursing home staff, and reduces fraudulent doctor/vendor relationships.

Medicare and Medicaid Are More Affordable

If you have Medicare, the "doughnut hole" gap in coverage is being subsidized thanks to the ACA. There are many other ways that Obamacare affects people differently depending on their situation.

The federal government spends $1.27 trillion on health care alone, more than any other budget item. The fiscal year 2023 budget includes Medicare benefits of $847 billion and Medicaid benefits of $536 billion. The U.S. Department of Health and Human Services (HHS) manages the programs at a current budget of $127.3 billion. As a result, health care costs the U.S. government more than Social Security, at $1.3 trillion, or the defense budget, at $766 billion. 

The problem is getting worse. By 2030, spending on Medicare and Medicaid benefits is projected to rise to $2.5 trillion. If there's one thing politicians don't like, it's having their hands tied when it comes to spending. That's the real reason they agreed to reform health care in 2010.

Health Care Is Delivered Differently

The ACA mandates that hospitals, doctors, and pharmacists work together in ways they never did before. First, all medical records must be recorded electronically instead of on paper. Computerized records allow doctors to easily share their diagnoses and treatments.

Second, Medicare pays hospitals based on how well you get, instead of how many tests and procedures doctors prescribe. As a result, health care costs should drop.

Third, health care providers are forming Accountable Care Organizations, which coordinate your care between your doctor and your specialists. Thanks to the ACA, the health care industry recognizes that integrated care is the way of the future, and it's making the shift in that direction.

Improved Health Care and Insurance Plans

The ACA made several improvements to health care and insurance plans. These improvements include: 

  • All plans must provide 10 essential health benefits.
  • Plans can no longer exclude those with pre-existing conditions.
  • Companies can no longer drop those who get sick.
  • Parents can add their children up to age 26 to their plans.
  • Lifetime limits are eliminated.
  • Annual limits are eliminated. 

You May Be Eligible for a Subsidy

Obamacare provides premium tax credits to families that earn between 100% and 400% of the federal poverty level, which is $27,750 to $111,000 for a family of four in 2022.

You do not need to be a U.S. citizen to receive a subsidy, but you must be a legal resident. You may even qualify for a subsidy if your income is above 400% of the federal poverty level—you can use the "Am I Eligible" tool to see if you qualify. Subsidies for those who sign up on the health insurance exchanges are projected to cost the federal government more than $10 trillion between 2021 and 2030.

Immigrants in the United States illegally cannot receive Obamacare. But the ACA does expand community health clinics to serve them. Why? So they will get preventive care for chronic illnesses. As a result, they will use expensive emergency rooms less, lowering health care costs for everyone.

There Is No Penalty

You don't have to pay a penalty. When Obamacare was first enacted, there was a penalty for not having health insurance, but The Tax Cuts and Jobs Act repealed the tax starting in 2019.

The ACA Does More Than Just Provide Insurance

Did you know the ACA legislation has also implemented the following programs?

  • It created the National Prevention Council, which coordinates all federal health efforts to promote active, drug-free lifestyles. 
  • It funds scholarships and loans to double the number of health care providers in five years. 
  • It cuts down on fraudulent doctor/supplier relationships.
  • It requires background checks of all nursing home staff to prevent abuse of seniors.

Frequently Asked Questions (FAQs)

When is open enrollment for Obamacare?

Open enrollment typically starts in the fall. Obamacare participants choose their health insurance plans at some point between Nov. 1 to Jan. 15 every year.

What is the income limit for Obamacare?

Anyone can sign up for an Obamacare health insurance plan, but income limits do apply to premium tax credits. The income limit depends on where you live and whom you live with. You can use the premium estimation calculator to get a sense of what you might qualify for, and you'll get exact numbers after you complete an application.

Article Sources

  1. WhiteHouse.gov. "Budget of the United States Government, Fiscal Year 2023," Page 121.

  2. WhiteHouse.gov. "Budget of the United States Government, Fiscal Year 2023," Page 65.

  3. Senate. "The Patient Protection and Affordable Care Act: Detailed Summary," Pages 4-7.

  4. Centers for Medicare and Medicaid Services. "What Marketplace Health Insurance Plans Cover."

  5. Senate. "The Patient Protection and Affordable Care Act: Detailed Summary," Pages 1-2.

  6. Internal Revenue Service. "The Premium Tax Credit - The Basics."

  7. Office of the Assistant Secretary for Planning and Evaluation. "Poverty Guidelines."

  8. Congressional Budget Office. "Federal Subsidies for Health Insurance Coverage for People Under 65: 2020 to 2030," Page 2.

  9. National Immigration Law Center. "Immigrants and the Affordable Care Act (ACA)."

  10. Centers for Medicare and Medicaid Services. "No Health Insurance? See If You'll Owe a Fee."

  11. Centers for Medicare & Medicaid Services. "Marketplace 2022 Open Enrollment Fact Sheet."