What is the 'Affordable Care Act'

The Affordable Care Act is a federal statute signed into law in March, 2010, as a part of the healthcare reform agenda of the Obama administration. Signed under the title of The Patient Protection and Affordable Care Act, the law included multiple provisions that would take effect over a matter of years, including the expansion of Medicaid eligibility, the establishment of health insurance exchanges and prohibiting health insurers from denying coverage due to pre-existing conditions.

BREAKING DOWN 'Affordable Care Act'

The Affordable Care Act – at the time of its enactment – was anticipated to reduce the federal deficit by nearly $145 billion in the first 10 years and between 0.25% and 0.5% of GDP thereafter, according to the Congressional Budget Office. The costs associated with the new amendments are offset by numerous taxes, such as increased taxes on items and services such as eye glasses, hearing aids and indoor tanning. Government data suggests that over 20 million Americans benefited from insurance coverage under this law as of March 2016.

Affordable Care Act changes Under President Trump

On January 20, 2017, in his first executive order after taking office, President Donald Trump signaled his intention to de-fund the Affordable Care Act saying executive agency heads should "delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State." The intention of this order is to signal the first phase of Republican efforts to repeal and replace the ACA. Rolling back the law was one of Trump's central campaign promises aimed at reducing the fiscal burden on the government.

Attempts by the government in 2017 to repeal the law altogether were not successful. However, the government scaled back its outreach program substantially and cut the enrollment period in half. Changes have been made to the law that have addressed some of the objections that have been raised by opponents, while still keeping the markets active for users. In December, Congress removed the penalty for not having health insurance, essentially removing the mandate that many Republicans had opposed. Nonetheless, enrollment numbers in late 2017 for coverage in 2018 were only moderately lower than in the previous enrollment period: 8.8 million Americans selected a plan by the December deadline, down from 9.2 million in the previous year.

In more recent developments, in spring 2018, President Trump issued new rules that make it easier for Americans to buy cheaper insurance that covers less health care sectors. Additionally, the Department of Health and Human Services cut the funding for the so-called navigators – insurance marketplace experts who provide one-on-one help for people looking to sign up for a health plan. 

RELATED TERMS
  1. Group Health Insurance Plan

    A group health insurance plan offers coverage at a lower premium ...
  2. Trumponomics

    Trumponomics is a term for the economic policies of President ...
  3. Long-Term Care (LTC) Insurance

    Long-term care insurance coverage provides for the care of people ...
  4. Centers for Medicare and Medicaid ...

    The Centers for Medicare and Medicaid Services (CMS) administers ...
  5. Pre-Existing Condition Exclusion ...

    Pre-Existing Condition Exclusion Period is a health insurance ...
  6. United States V. The South-Eastern ...

    The United States v. The South-Eastern Underwriter Association ...
Related Articles
  1. Insights

    A Real Solution for the Health Insurance Market

    It's time for our representatives to come together and find a healthcare solution for everyone.
  2. Retirement

    Is Your Health Insurance Enough For Retirement?

    Learn what to expect to pay for health insurance in retirement, what is covered through Medicare and what the Affordable Care Act means for retirees.
  3. Insurance

    How Obamacare Can Be Repealed

    There are several ways that the Republican-led Congress and the next president can repeal Obamacare. Here's a look at possible scenarios.
  4. Insurance

    Opinion: Obamacare Repeal – Cruel, Costly, Corporate

    Let’s call this legislation what it is: The Create More Orphans and Widows Act of 2017.
  5. Insurance

    What Trump’s New Short-Term Health Insurance Order Means

    Cheaper health insurance that lasts 364 days instead of three months could be available soon. Here's a look at who might benefit and who might lose out.
  6. Insurance

    The Tax Implications of Fully Repealing the ACA

    Repealing the Affordable Care Act would have a financial effect on individuals and employers.
  7. Insurance

    Is the Affordable Care Act Failing?

    Another big insurer has pulled out of Obamacare-mandated insurance exchanges. As competition dwindles, will healthcare reform enter the "death spiral?"
  8. Investing

    Can Trump's Presidency Heal Pharma Stocks? (XLV, VHT)

    The market appears to be taking a wait-and-see attitude toward health care companies.
  9. Insurance

    Obamacare Penalty: What Actually Happens (& When)

    If you didn't have health insurance last year – or miss this year's deadline – how is the Affordable Care Act penalty enforced?
  10. Retirement

    Healthcare Costs in 2018: The Great Unknown

    Trump has promised to repeal the Affordable Care Act and has nominated to his cabinet the perfect man to help. But what about the people covered by it?
RELATED FAQS
  1. Operation management in healthcare

    Discover how operations management theory is applied across a broad spectrum of operational and management issues in the ... Read Answer >>
Trading Center