{"id":355828,"date":"2016-04-04T10:46:17","date_gmt":"2016-04-04T15:46:17","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/healthcare\/patient-rights\/obamacare-basics-understanding-the-affordable-care-act.html"},"modified":"2023-06-16T07:47:06","modified_gmt":"2023-06-16T12:47:06","slug":"obamacare-basics-understanding-the-affordable-care-act","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/healthcare\/patient-rights\/obamacare-basics-understanding-the-affordable-care-act.html","title":{"rendered":"Obamacare Basics: What is the Affordable Care Act?"},"content":{"rendered":"\n
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Obamacare Basics: What is the Affordable Care Act?<\/h1>\n
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\n By Melissa McCall, J.D.<\/a> | Legally reviewed by Aviana Cooper, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

The Patient Protection and Affordable Care Act (ACA)<\/a> is federal public health legislation signed into law in 2010 by former President Barack Obama. The ACA<\/a> is often called "Obamacare." The ACA made sweeping changes to public health through health insurance and what is required to be covered. One significant difference is all insurers must now offer different levels of coverage and coverage for preexisting conditions.<\/p>\r\n

Before the Affordable Care Act, millions of Americans did not have health insurance. Most of the uninsured were from low-income households. Lack of health insurance was widespread, and the uninsured couldn’t afford basic primary care, preventive services, or prescription drugs.<\/p>\r\n

This resulted in significant disparities in health across the nation. Without basic healthcare, minor medical conditions become chronic diseases such as diabetes and heart disease.<\/p>\r\n

Pre-ACA, health insurance companies could refuse to cover anyone with a preexisting condition. A preexisting<\/a> condition is a health condition that existed before getting new insurance. Under the ACA, health insurers cannot refuse coverage based on a preexisting condition.<\/p>\r\n

Through the ACA, more Americans have access to health insurance and healthcare. They also have increased access to mental health resources.<\/p>\r\n

This article explores the Affordable Care Act and how it affects individuals.<\/p>\r\n

What Is the Affordable Care Act in Simple Terms?<\/h2>\r\n

The Affordable Care Act is a federal law that reduces health insurance costs and expands coverage. It does this through the shared responsibility of the government, employers, and policyholders. It also aims to prohibit the restrictive practices of the health insurance industry.<\/p>\r\n

How Does the Affordable Care Act Work?<\/h2>\r\n

The Affordable Care Act reduces healthcare costs under a few principles. These principles include a formerly imposed individual mandate (which is no longer applicable) to buy insurance and subsidized premiums. It also includes new regulations for the health insurance industry and permits states to expand the Medicaid program.<\/p>\r\n

Subsidized Costs<\/h3>\r\n

The ACA subsidizes<\/a> the costs of premiums for low-income families in a few ways. First, there are direct subsidies. Direct subsidies include the Medicaid program. Before the ACA, Medicaid did not cover low-income working adults.<\/p>\r\n

The second way is through Medicaid expansion<\/a>. Medicaid expansion covers adults who work but cannot afford health insurance. This includes adults with a household income below 138% of the federal poverty level. Today, over 40 states and the District of Columbia<\/a> have expanded Medicaid coverage. Some states use a different income level.<\/p>\r\n

ACA also reduced Medicare reimbursements to healthcare providers under Medicare Advantage. Medicare Advantage<\/a> is a Medicare-approved alternative to original Medicare. The savings from these cuts to Medicare reimbursements help subsidize older Americans’ care.<\/p>\r\n

The final way that the ACA subsidizes health care is through premium tax credits<\/a>. These tax credits depend on a person’s household income and lower their monthly health insurance premiums. Consumers can use these credits each month. Taxpayers can request a refund with their tax returns if they don’t.<\/p>\r\n

Insurance Regulations<\/h3>\r\n

The ACA added insurance requirements, including prohibiting insurance providers from the following:<\/p>\r\n