What is the Affordable Care Act?

Your guide to understanding the Affordable Care Act.

What you need to know

The Affordable Care Act, also called the ACA or Obamacare, is a health care reform law that went into effect in 2010. The primary goals of the Affordable Care Act were to make health insurance more affordable, to institute consumer protections, and to increase the amount of people covered by health insurance.

The Affordable Care Act makes health insurance more affordable by creating a new premium tax credit, which helps low and moderate income families pay for health insurance. The ACA also requires that all health insurance plans cover at least 60% of all medical expenses and the entire cost of recommended preventative health services.

The ACA also instituted important consumer protections, like extending young adult coverage on family plans to age 26 and guaranteeing coverage of pre-existing conditions. Your right to appeal a denial of payment is also guaranteed by the ACA. The ACA created a review process for premium increases, forcing health insurers to publicly justify rate increases. The law also ended lifetime limits on coverage.

In order to increase the number of people covered by health insurance, the ACA created a new fee for people who do not have a qualifying health insurance plan, to be paid on the federal tax return. It also created new health insurance marketplaces, which make it easier for people to access and purchase health insurance. The ACA also expanded Medicaid and CHIP to more low income families. Efforts to make health insurance more affordable also help decrease the number of uninsured Americans.