The Affordable Care Act, or ACA, has helped millions of Americans get health insurance coverage. It expanded the Medicaid program to provide health coverage to low-income people, created new exchange markets through which individuals can purchase their own health insurance, and required employers with 50 or more employees to offer health benefits or pay a penalty. The ACA also requires certain insurance plans to cover essential health benefits and limit out-of-pocket costs for prescription drugs. Finally, the ACA prohibits discrimination against people with preexisting conditions.

Since the ACA’s implementation, the uninsured rate has fallen significantly. The vast majority of the gains have come from expanding Medicaid, and the remainder have been made through a combination of the creation of ACA Marketplaces and premium subsidies for those who cannot afford to buy insurance.

Several of the ACA’s provisions have been controversial or have led to political and legal battles, including multiple efforts to repeal, replace, or overturn the law, and numerous court cases regarding its implementation. As a result, the law has evolved considerably over time.

A central issue in the debate over the ACA is its affordability. Initially, the ACA was designed to be budget neutral, with insurance subsidies and expansion of public programs being financed through a variety of taxes and fees on individuals, families, employers, insurers, and health care providers, as well as savings from Medicare. These taxes and fees have, at various times, included a penalty for not having health insurance, a tax on medical device sales, and a “Cadillac” tax on high-cost employer plans.

Some of these taxes and fees have been temporarily reduced or eliminated, such as the individual mandate penalty and the tax on medical devices, while others have remained in place, such as the 3.8 percent excise tax on health care providers and a premium tax on the wealthiest individuals. The ACA has also introduced new funding mechanisms, such as the temporary reinsurance and risk corridors programs, to help stabilize the market.

Moreover, the ACA limits how much health insurance companies can charge for their premiums and deductibles in both the individual and small group markets. In addition, the ACA requires all health plans sold in the individual and small group markets to offer the same set of benefits, with some exceptions. The ACA’s requirements include preventive services and prescription drug coverage, as well as coverage for pregnancy and birth control. It also bars health plans from imposing lifetime or annual limits on their members’ benefits, although some non-essential benefits may be offered. The ACA also prohibits abortion coverage. The ACA’s enhanced subsidies (enhanced through the American Rescue Plan and Inflation Reduction Act of 2021) remain in effect through 2025.