Patient Protection and Affordable Care Act

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The Patient Protection and Affordable Care Act (PPACA),[1] commonly called the Affordable Care Act (ACA) or "Obamacare"[2] is a United States federal statute signed into law by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act,[3] it represents the most significant regulatory overhaul of the country's healthcare system since the passage of Medicare and Medicaid in 1965.[4]

Overview of provisions

The ACA includes numerous provisions that take effect between 2010 and 2020. Policies issued before 2010 are exempted by a grandfather clause from many of the changes to insurance standards, but they are affected by other provisions.[5][6] Significant reforms, most of which take effect by January 1, 2014, include:

  • Forbidden discrimination of clients, called guaranteed issue, which prohibits insurers from denying coverage to individuals due to pre-existing conditions, and a partial community rating requires insurers to offer the same premium price to all applicants of the same age and geographical location without regard to gender or most pre-existing conditions (excluding tobacco use).[7][8][9]
  • Minimum standards for health insurance policies are established.[10][11][12][13][14]
  • An individual mandate[15][16] requires all individuals not covered by an employer sponsored health plan, Medicaid, Medicare or other public insurance programs (such as Tricare) to secure an approved private-insurance policy or pay a penalty, unless the applicable individual has a financial hardship or is a member of a recognized religious sect exempted by the Internal Revenue Service.[17] The law includes subsidies to help people with low incomes comply with the mandate.[18]
  • Health insurance exchanges will commence operation in every state. Each exchange will serve as an online marketplace where individuals and small businesses can compare policies and buy insurance (with a government subsidy if eligible).[19] In the first year of operation, open enrollment on the exchanges runs from October 1, 2013 to March 31, 2014, and insurance plans purchased by December 15, 2013 will begin coverage on January 1, 2014.[20][21][22][23] In subsequent years, open enrollment will start on October 15 and end on December 7.[24][25][26]
  • Low-income individuals and families whose incomes are between 100% and 400% of the federal poverty level will receive federal subsidies on a sliding scale if they purchase insurance via an exchange.[27] Those from 133% to 150% of the poverty level will be subsidized such that their premium costs will be 3% to 4% of income.[28] In 2013, the subsidy would apply for incomes up to $45,960 for an individual or $94,200 for a family of four; consumers can choose to receive their tax credits in advance, and the exchange will send the money directly to the insurer every month.[29] Small businesses will also be eligible for subsidies.[30]
  • Medicaid eligibility is expanded to include individuals and families with incomes up to 133% of the federal poverty level, including adults without disabilities and without dependent children.[31] The law also provides for a 5% "income disregard", making the effective income eligibility limit for Medicaid 138% of the poverty level.[32] Furthermore, the State Children's Health Insurance Program (CHIP) enrollment process is simplified.[31] However, in National Federation of Independent Business v. Sebelius, the Supreme Court ruled that states may opt out of the Medicaid expansion, and several have done so.
  • Reforms to the Medicare payment system are meant to promote greater efficiency in the healthcare delivery system by restructuring Medicare reimbursements from fee-for-service to bundled payments.[33][34] Under the new payment system, a single payment is paid to a hospital and a physician group for a defined episode of care (such as a hip replacement) rather than individual payments to individual service providers. In addition, the Medicare Part D coverage gap (commonly called the "donut hole") will shrink and be completely closed by January 1, 2020.[35]
  • Businesses who employ 50 or more people but do not offer health insurance to their full-time employees will pay a tax penalty if the government has subsidized a full-time employee's healthcare through tax deductions or other means. This is commonly known as the employer mandate.[36][37]


  1. Pub.L. 111-148, 124 Stat. 119, codified as amended at scattered sections of the Internal Revenue Code and in 42 U.S.C.
  2. Holan, Angie D. (March 20, 2012). "RomneyCare & ObamaCare: Can you tell the difference?". Tampa Bay Times. Retrieved August 29, 2012. 
  3. Pub.L. 111-152, 124 Stat. 1029, codified as amended at scattered sections of the Internal Revenue Code and in 42 U.S.C., 19 U.S.C., and 20 U.S.C.
  4. James Vicini; Jonathan Stempel (June 28, 2012). "US top court upholds healthcare law in Obama triumph". Reuters. 
  5. "What if I have a grandfathered health insurance plan?". 
  6. Bernadette Fernandez (April 27, 2010). "Grandfathered Health Plans Under the Patient Protection and Affordable Care Act (PPACA)". Congressional Research Service. 
  7. Template:Cite press release[dead link]
  8. Pool, Gentrie (October 7, 2010). "After PPACA: The Future of the Health Insurance Underwriter | LifeHealthPro". Retrieved April 9, 2012. 
  9. "Selected Patient Protection and Affordable Care Act (PPACA) implementation dates of interest to RNs as caregivers, RNs as patients, and RNs as employees". Retrieved April 9, 2012. 
  10. Jonathan Cohn (June 12, 2013). "You Call This Insurance?". The New Republic. 
  11. "Essential Health Benefits – Glossary". September 23, 2010. Retrieved January 9, 2012. 
  12. Template:Cite press release
  13. "Patient Protection and Affordable Care Act of 2009: Health Insurance Exchanges". National Association of Insurance Commissioners. April 20, 2010. Retrieved April 9, 2012. 
  14. Template:Cite press release
  15. "Minimum Coverage Provision ("individual mandate")". American Public Health Association (APHA). 
  16. Template:Cite press release[dead link]
  17. Galewitz, Phil (March 26, 2010). "Consumers Guide To Health Reform". Kaiser Health News. 
  18. Tami Luhby (April 23, 2013). "Millions eligible for Obamacare subsidies, but most don't know it". CNNMoney. Retrieved June 22, 2013. 
  19. "Welcome to the Marketplace". HealthCare.Gov, managed by the Centers for Medicare and Medicaid Services. 
    "What is the Health Insurance Marketplace?". HealthCare.Gov, managed by the Centers for Medicare and Medicaid Services. 
  20. CNN. "Millions eligible for Obamacare subsidies, but most don't know it". 
  21. "Establishing Health Insurance Exchanges: An Overview of State Efforts". 
  22. "Enrollment in the Marketplace starts in October 2013". [dead link]
  23. Morgan, David; Begley, Sharon (September 30, 2013). "Obamacare push accelerates as government shutdown nears". Reuters. Retrieved October 1, 2013. "Sebelius said on Monday that "the key date really is the 15th of December," the deadline for buying coverage that starts on January 1." 
  24. "Glossary: Open Enrollment Period". Retrieved October 4, 2013. 
  25. Young, Jeffrey (September 25, 2013). "Obamacare Benefits Enrollment Will Start Slowly, White House Predicts". The Huffington Post. Retrieved October 2, 2013. 
  26. Jonathan Cohn (August 5, 2013). "Burn Your Obamacare Card, Burn Yourself". The New Republic. 
  27. "Explaining Health Care Reform: Questions About Health Insurance Subsidies". Kaiser Family Foundation. April 2010. Retrieved April 1, 2012. 
  28. Peter Grier (March 20, 2010). "Health care reform bill 101: Who gets subsidized insurance?". The Christian Science Monitor. Retrieved January 9, 2012. 
  29. Michelle Andrews, "Health Insurance Exchanges Prompt Consumers' Questions", NPR, August 27, 2013.
  30. "Small Business Health Care Tax Credit for Small Employers". Internal Revenue Service. December 13, 2011.,,id=223666,00.html. Retrieved January 9, 2012. 
  31. 31.0 31.1 "Where are States Today? Medicaid and CHIP Eligibility Levels for Children and Non-Disabled Adults". Kaiser Family Foundation. March 28, 2013. 
  32. "Medicaid Expansion". American Public Health Association (APHA). Is Medicaid eligibility expanding to 133 or 138 percent FPL, and what is MAGI?. Retrieved 24 July 2013. 
  33. "Access". Medscape. Retrieved January 9, 2012. 
  34. "Key Healthcare Reform Initiatives: Medicare Bundled Payment Pilots". Huron Consulting Group. November 19, 2010. Retrieved January 9, 2012. 
  35. "More savings in the drug coverage gap coming through 2020". Centers for Medicare & Medicaid Services. Retrieved September 27, 2013. 
  36. "Explaining Health Care Reform: What is Employer "Pay-or-Play" Requirement?". Kaiser Family Foundation. May 2009. Retrieved January 9, 2012. 
  37. McNamara, Kristen (March 25, 2010). "What Health Overhaul Means for Small Businesses". The Wall Street Journal.