---
title: The Affordable Care Act
description: The Affordable Care Act is a comprehensive reform law from 2010. The ACA law increases health insurance coverage for the uninsured and implements reforms to the health insurance market.
---

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# [The Affordable Care Act](https://blog.exactpayroll.com/news/the-affordable-care-act)

 Written by [Admin](https://blog.exactpayroll.com/news/author/admin) | December 13, 2016

The **Patient Protection and Affordable Care Act** (**PPACA**), commonly called the **Affordable Care Act** (**ACA**) or **Obamacare**, is a United States [federal statute](https://en.wikipedia.org/wiki/U.S._federal_law) enacted by [President](https://en.wikipedia.org/wiki/President_of_the_United_States) [Barack Obama](https://en.wikipedia.org/wiki/Barack_Obama)on March 23, 2010. Together with the [Health Care and Education Reconciliation Act](https://en.wikipedia.org/wiki/Health_Care_and_Education_Reconciliation_Act) amendment, it represents the most significant regulatory overhaul of the [U.S. healthcare system](https://en.wikipedia.org/wiki/Health_care_in_the_United_States) since the passage of [Medicare](https://en.wikipedia.org/wiki/Medicare_(United_States)) and [Medicaid](https://en.wikipedia.org/wiki/Medicaid) in 1965. Under the act, hospitals and primary physicians would transform their practices financially, technologically, and clinically to drive better health outcomes, lower costs, and improve their methods of distribution and accessibility.

The Affordable Care Act was intended to increase [health insurance](https://en.wikipedia.org/wiki/Health_insurance) quality and affordability, lower the [uninsured rate](https://en.wikipedia.org/wiki/Health_insurance_coverage_in_the_United_States) by expanding insurance coverage and reduce the costs of healthcare. It introduced mechanisms including mandates, [subsidies](https://en.wikipedia.org/wiki/Premium_tax_credit) and [insurance exchanges](https://en.wikipedia.org/wiki/Health_insurance_marketplace).[[1]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-nyt-critics-1)[[2]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-pk1-2) The law requires insurers to [accept all applicants](https://en.wikipedia.org/wiki/Guaranteed_issue), cover a specific list of conditions and [charge the same rates](https://en.wikipedia.org/wiki/Community_rating) regardless of [pre-existing conditions](https://en.wikipedia.org/wiki/Pre-existing_condition) or sex.[[3]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-3) In 2011, the [Congressional Budget Office](https://en.wikipedia.org/wiki/Congressional_Budget_Office) projected that the ACA would lower future deficits[[4]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-4) and Medicare spending.[[5]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-5)

The law and its implementation faced challenges in [Congress](https://en.wikipedia.org/wiki/United_States_Congress) and [federal courts](https://en.wikipedia.org/wiki/United_States_federal_courts), and from some [state governments](https://en.wikipedia.org/wiki/State_governments_of_the_United_States), [conservative](https://en.wikipedia.org/wiki/Conservatism_in_the_United_States) [advocacy groups](https://en.wikipedia.org/wiki/Advocacy_group), [labor unions](https://en.wikipedia.org/wiki/Labor_union), and small business organizations. The [United States Supreme Court](https://en.wikipedia.org/wiki/Supreme_Court_of_the_United_States) upheld the constitutionality of the ACA’s [individual mandate](https://en.wikipedia.org/wiki/Individual_shared_responsibility_provision) as an exercise of Congress’s taxing power,[[6]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-6) found that states cannot be forced to participate in the ACA’s [Medicaid expansion](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#Medicaid_expansion),[[7]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-7)[[8]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-8)[[9]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-9) and found that the law’s subsidies to help individuals pay for health insurance are available in all states, not just in those that have set up state exchanges.

The law has caused a significant reduction in the number and percentage of people without health insurance. The CDC reported that the percentage of people without health insurance fell from 16.0% in 2010 to 8.9% during the January–June 2016 period.[[10]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-CDC1-10) The [Congressional Budget Office](https://en.wikipedia.org/wiki/Congressional_Budget_Office) reported in March 2016 that there were approximately 23 million people with insurance due to the law, with 12 million people covered by the exchanges (10 million of whom received subsidies to help pay for insurance) and 11 million made eligible for Medicaid.[[11]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-CBO_Subsidy2016-11) By 2017, nearly 70% of those on the exchanges could purchase insurance for less than $75/month after subsidies, which rose to offset significant pre-subsidy price increases in the exchange markets.[[12]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-NPR1-12) According to the [Kaiser Foundation](https://en.wikipedia.org/wiki/Kaiser_Foundation), healthcare premium cost increases in the employer market continued to moderate. For example, healthcare premiums for those covered by employers rose by 69% from 2000-2005, but only 27% from 2010 to 2015,[[13]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-Kaiser15-13) with only a 3% increase from 2015 to 2016.[[14]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-Kaiser16-14)

As implementation began, first opponents and then most others adopted the term “Obamacare” to refer to the ACA.[[15]](https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#cite_note-CNN20120625Obamacare-15)

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