Obamacare (Affordable Care Act)

What Is Obamacare?

Obamacare is the unofficial name used to reference the Affordable Care Act, which is a law passed by the federal government with the intent of creating affordable health insurance options for all Americans. The Affordable Care Act was voted into law under the Obama administration, which is why it is often referred to as Obamacare. 

One of the biggest changes brought by the Affordable Care Act is the requirement for citizens to have health insurance; tax penalties, also known as the shared responsibility payment, are charged to those who do not comply.  Use our free Obamacare Tax Penalty Tool to see how much you may be paying without health insurance. 

For some, there are circumstances that allow exemptions from the requirement and the penalty.  These exemptions can include: 

  • Coverage is a financial burden
  • You are a U.S. citizen who is living abroad
  • You are not lawfully present in the U.S.
  • You are a member of a health sharing ministry
  • Your are a member of a federally recognized Indian tribe
  • You are incarcerated
  • You are a member of certain religious sects

Make sure you qualify for these exemptions before opting out of purchasing health insurance.  You can find out if you qualify for an exemption by visiting www.healthcare.gov.

Who Pays for Obamacare?

Consumers who purchase a policy are responsible for paying for all of, or a portion of the premium.  There are premium tax credits that can be given to individuals and families who meet certain income criteria. These credits are reported on the consumer’s income tax return, and any overpayment of credits must be repaid with the tax return.

When Was Obamacare Implemented?

The Affordable Care Act was signed into law in 2010 and became effective in January of 2014. The bill allowed for a gradual implementation of changes to healthcare and other systems of government with some provisions not going into effect until 2020. 

What Was the Purpose of Obamacare?

The main objectives of the Affordable Care Act were to create a path for the uninsured to become insured, reduce healthcare spending and improve quality of health for American citizens. It also addressed gaps in coverage for those with pre-existing conditions and allowed for parents to keep children on their policies longer.

Pros and Cons of Obamacare 


Coverage for All

For those who were plagued with health challenges, the Affordable Care Act came as a welcomed relief. Under the law, everyone can obtain coverage no matter their health conditions or level of income. 

Premium Tax Credits

If you and your family are unable to afford most traditional health insurance coverage, the Affordable Care Act provides a way to make premiums more affordable through tax credits. For many, these credits are substantial and bring the cost of insurance down to a minimum.

Preventative Services

To help curb the costs of healthcare, the Affordable Care Act provides for preventative services to ward off illness that could be avoided through proper screenings and health and nutrition advice.


The Premium Tax Credit

While also an advantage, the premium tax credit can be a disadvantage to those who do not fully understand how it works. Because tax credits are based on income, consumers can get stuck paying back large credits if their income had changed during the year and the changes were not reported to the insurance agency.

Open Enrollment

Open enrollment is the only time consumers are allowed to sign up for an ACA plan unless there has been a change in circumstances, such as marriage or a new job. If open enrollment is missed, there are few options until it rolls around again.

The Tax Penalty

The penalty can be significant for many who still find insurance unaffordable and do not qualify for any assistance with premiums.

If you are curious to see if you qualify for an Obamacare subsidy, or are looking to compare health insurance quotes, give one of our experienced agents a call 858-771-4087 or enter your zip code here