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. Health Insurance

    Health insurance is a type of insurance coverage that pays for ...
  2. Pre-Existing Condition

    A pre-existing condition is any personal illness or health condition ...
  3. Health Insurance Marketplace

    The health insurance marketplace is a government-sponsored exchange ...
  4. Group Health Insurance Plan

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

    Trumponomics is a term for the economic policies of President ...
  6. Waiting Period

    For insurance, a waiting period is the amount of time an insured ...
Related Articles
  1. Insights

    5 Things You Need To Know About Obamacare

    This article will clear up some of the popular misconceptions about the Affordable Care Act.
  2. 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.
  3. 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.
  4. Insurance

    Where to Find Affordable Health Insurance

    The cost of medical services can hit the wallet hard: there are 1.7 million personal bankruptcies every year due to inability to pay medical bills.
  5. Insurance

    The Tax Implications of Fully Repealing the ACA

    Repealing the Affordable Care Act would have a financial effect on individuals and employers.
  6. Retirement

    Top 3 Health Insurance Options If You Retire Early

    Early retirees will need to maintain coverage until they become Medicare-eligible at age 65.
  7. Insurance

    Trump, Healthcare and Insurers: What Comes Next

    Here's how Donald Trump's plans to radically overhaul health insurance could impact insurance firms.
  8. Insights

    Trumpcare Is Dead: 'Obamacare Is the Law of the Land'

    Lacking support from the right wing and centrists, the Republicans have failed in their 63rd attempt to end Obamacare.
  9. Insurance

    Is My Health Insurance Good In Another State?

    Under ACA, is health care insurance something you can take with you state to state?
  10. Insurance

    The Crippling Cost of Self-Insuring Long-Term Care

    Covering the cost of long-term care without insurance can deplete retirement savings quickly.
RELATED FAQS
  1. Can I get dental insurance with Obamacare?

    Discover how you can obtain dental insurance as part of a health plan or on a standalone basis through the Health Insurance ... Read Answer >>
  2. Why is my insurance premium so high/low?

    Insurance premiums can be affected by many factors including: type and amount of risk size of deductible amount of coverage ... Read Answer >>
  3. How does the Affordable Care Act affect moral hazard in the health insurance industry?

    Find out why the Affordable Care Act increases moral hazard in health insurance by pushing consumers farther and farther ... Read Answer >>
Trading Center