What is Obamacare?

Obamacare is another name for the US Patient Protection and Affordable Care Act (ACA) of 2010. The goal was to make healthcare more affordable for all Americans, above all by lowering costs for people who can't afford health insurance.

You'll find the key facts about US health insurance here.

On this page you'll learn more about Obamacare, including which ACA taxes still apply and how this healthcare plan can affect you in the States.

1Obamacare at a glance

• Obamacare is another name for the Patient Protection and Affordable Care Act (ACA) of 2010.
• The law set out to make healthcare more affordable for everyone and to lower costs for those who can't afford it.
• Under the ACA, plans must let parents keep their children on their coverage until age 26.
• The ACA requires insurers to include 10 essential benefits.

2What is Obamacare?

Obamacare is the popular name for the Patient Protection and Affordable Care Act (ACA). Most people think it only affects health insurance. In fact, it fundamentally changed how healthcare works across the entire USA. At first only critics of the former president's healthcare reform used the term "Obamacare", but in the end the name stuck.

The ACA revolutionized how many people access healthcare. Before the ACA, insurers could turn away people with pre-existing conditions. As a result, the people with the highest healthcare costs sometimes had to go without insurance or settle for a policy that didn't cover their pre-existing condition. Because they often couldn't afford regular doctor visits, many ended up in the emergency room and couldn't pay for their treatment.

Thanks to Obamacare, people with pre-existing conditions can now afford preventive care in the States too. That reduces not only hospital visits but also the rise in healthcare costs. The best measure of Obamacare's success is people with pre-existing conditions: before the ACA they could be turned down, today they can't, and they receive many preventive services with no copay.

3How Obamacare works

The ACA's main goal was to slow rising healthcare spending in the USA. A range of measures was meant to make health insurance easier to get and more affordable for those who need it most. The law also required everyone in the States to have health insurance or pay a tax penalty, but that provision expired in 2019.

The ACA also aims to make health insurance more affordable through subsidies for people on low incomes. Medicaid is available to people earning up to 138% of the federal poverty level. By 2021, 12 states had chosen not to expand Medicaid, limiting access for their residents. North Carolina (December 2023) and South Dakota (July 2023) have since expanded; in ten states, most of them in the South, the expansion still doesn't apply:

• Alabama
• Florida
• Georgia
• Kansas
• Mississippi
• North Carolina (expanded since December 2023)
• South Carolina
• South Dakota (expanded since July 2023)
• Tennessee
• Texas
• Wisconsin
• Wyoming

The poverty level is usually raised every year to keep pace with inflation. If you earn too much for Medicaid, you receive tax credits as long as your income is below 400% of the poverty level. The credit is paid monthly, not as an annual tax refund. On top of that come lower deductibles and copays.

4The Obamacare tax penalties

Originally, the ACA also required everyone in the USA to have health insurance for at least 9 out of 12 months, or pay a tax. This was meant to ensure insurers could afford to take on patients with pre-existing conditions.

In December 2017, Congress repealed the penalty from 2019 onward with the Tax Cuts and Jobs Act. Even before that, many groups had successfully petitioned Congress to be exempted from Obamacare.

By repealing the mandate, Congress left insurers obliged to accept patients with pre-existing conditions while healthier people could drop out. That raised insurers' costs.

Because the subsidies remain, the US government also covers part of the rising costs.

5How much the Obamacare taxes are

Some taxes linked to Obamacare still apply:

• If you earn more than $200,000 a year: Taxes went up in 2013 for individuals earning more than $200,000 a year (or $250,000 for married couples), as well as for some healthcare providers and other health-related businesses.
• If you run a business: If you have 50 or more employees, you must insure at least 95% of your full-time staff or pay a penalty.

6How to get Obamacare

Even though Congress removed one of the ACA's pillars, you can still benefit from the parts that work.

6.1Health insurance marketplaces

The health insurance marketplaces are open for enrollment every year from November 1 to January 15. If you miss that window, you can still use them to buy private short-term coverage or apply for Medicaid. You can also use them to compare plans for the future.

Some marketplaces are run by the states, others by the federal government. It's especially important to compare all costs, including monthly premiums, the annual deductible, coverage limits and copays.

7Essential Obamacare benefits

Under the ACA, insurance plans must let parents keep their children on their plans until age 26. They must also offer 10 essential benefits:

1. Preventive & wellness visits, including chronic disease management
2. Maternity & newborn care
3. Mental health & behavioral health treatment
4. Services & devices for people with injuries, disabilities or chronic conditions
5. Lab tests
6. Pediatric care
7. Prescription drugs
8. Outpatient care
9. Emergency services
10. Hospitalization

8What has changed since it was introduced

Although Congress has made major changes to Obamacare, the ACA remains in force. The points below reflect the situation as of 2026.

The individual mandate penalty has been zero since 2019 (Tax Cuts and Jobs Act of 2017, § 11081). The coverage requirement is formally still in the law, but it is no longer enforced at federal level: US citizens without health insurance no longer pay a penalty. Some states charge their own penalties.

States may now also set "work requirements" before granting Medicaid. That means recipients have to show that they are either working or in school.

On top of that, a new rule took effect on January 1, 2021 requiring hospital systems to disclose their prices to patients.

Repealing the ACA has been the target of several bills and lawsuits. Most recently, in 2021, the Supreme Court upheld the law in California v. Texas. The ACA remains in force.

For an overview of medical care, see our page on healthcare in the USA; our overview of US health insurance and the article on the differences between HMO, PPO, POS & EPO take you further.

In short

• Obamacare is the Patient Protection and Affordable Care Act of 2010. It aims to make health insurance more affordable, and insurers can no longer turn anyone down because of a pre-existing condition.
• Medicaid is open up to 138% of the poverty line in states that have expanded it. Ten states, including Texas and Florida, have not.
• Since 2019, the penalty for being uninsured has been zero. Some taxes remain, for example on high incomes, and employers with 50 or more employees must provide coverage for their full-time staff.
• Plans must cover ten essential benefits and let children stay on their parents' plan until age 26. Enrollment runs from November 1 to January 15.

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