The Affordable Care Act: What It Means and How It Affects Your Healthcare

Have you ever wondered why you can stay on your parents' insurance until you're 26? Or why your insurance can't deny you because you have asthma or diabetes? Maybe you've heard the term "Obamacare" on the news but never knew what it actually changed. The Affordable Care Act, also known as Obamacare, affects nearly every American with health insurance—and understanding it can help you make better decisions about your own healthcare.

Prior to 2010, about 46-50 million Americans did not have health insurance because the healthcare system relied heavily on employer-sponsored insurance and private insurance companies. Of course, this wasn’t good because if patients lost their jobs, had low incomes, or a chronic medical condition then they would be buried under medical bills with no coverage. The Affordable Care Act, also known as Obamacare, was signed into law in March of 2010 with three goals: 

1. Make affordable health insurance available to more people

2. Expand Medicaid (government insurance) to “cover all adults with income below 138% of the federal poverty level”

3. Support innovative medical care delivery methods to lower the costs of health care. 

So let’s go through each of these so that we can better understand what they mean:

Starting with the first goal: Make health insurance more affordable

The ACA created the Health Insurance Marketplace, where individuals who do not receive insurance through an employer can compare plans and, depending on their income, may qualify for financial assistance to lower their monthly premiums. (We'll talk more about the Marketplace in a future blog!)

Continuing with the second goal: 

The whole point of this was to make it easier to get on to Medicaid (AHCCCS). The way this works is that any adult that makes less than 133% of the federal poverty level can get medicaid. BUT medicaid makes it easier by ignoring 5% of the patient’s income so we just say that if the adult’s income is BELOW 138% of the federal poverty level, then they generally can get medicaid. 

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HERE IS AN EXAMPLE: 

So imagine the poverty level for a single person is $15,000 (not the real number—just an easy example).

133% of $15,000 = $19,950.

At this point, you would think anyone making less than $19,950 qualifies.

Step 2: The law says to ignore part of the income

The ACA also says Medicaid should ignore the last 5% of the Federal Poverty Level when deciding eligibility. Notice it does not say to ignore 5% of your income. It says to ignore 5% of the poverty level itself.

Five percent of our example poverty level is:

5% × $15,000 = $750

Step 3: Pretend that $750 doesn't exist

Now suppose you make $20,700.

Normally:

• Income = $20,700

• Limit = $19,950

• ❌ Too high

But Medicaid ignores the last $750.

So they calculate:

$20,700 − $750 = $19,950

Now you're exactly at the limit and you qualify. 

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Moving on with the third goal: Support innovative medical care delivery methods to lower the costs of health care. 

This is another VERY important part of changing the healthcare system! Prior to this change, many healthcare providers were paid solely under a fee-for-service model which means they were paid based on the QUANTITY of appointments they had in a day. This meant that providers had more of an incentive for providers to see more patients in a day. When the ACA (Affordable Care Act) was signed, they introduced new payment models where providers could now be rewarded for coordinating care between PCPs (primary care physicians) and specialists, preventing hospital readmissions, and improving patient health outcomes, ect… And you might be asking the same question I was when I learned about this… how is that even measured? 

Here are some examples: 

1. Healthcare systems track whether patients actually become healthier after treatment.

Examples include:

• Blood pressure control: What percentage of patients with hypertension have their blood pressure under control?

• Diabetes management: What percentage of diabetic patients maintain an appropriate Hemoglobin A1c (HbA1c) level?

• Vaccination rates: Are eligible patients receiving recommended vaccines?

• Cancer screening rates: Are patients receiving mammograms, colonoscopies, and cervical cancer screenings when recommended?

Instead of asking, "Did the doctor order medication?" they ask, "Did the patient's health improve?" And if they did… then the provider gets an additional incentive so everyone’s happy.

2. Preventing Hospital Readmissions: This one is relatively straightforward to measure.

Hospitals report:

• How many patients are discharged.

• How many return to the hospital within 30 days for certain conditions. (This is why most providers try really hard to completely address your concerns in Hospitals so that you don’t return for the same condition)

For example:

• 100 patients are treated for heart failure.

• 18 are readmitted within 30 days.

The hospital's 30-day readmission rate is 18%.

Medicare compares this rate with national benchmarks while adjusting for how sick the patients were. A lower-than-expected readmission rate generally suggests better discharge planning and follow-up care.

3. Delivering High-Quality Care Efficiently: This means providing appropriate care without unnecessary services.

Examples:

Suppose two hospitals treat patients with uncomplicated pneumonia.

Hospital A

• Orders three CT scans.

• Keeps patients hospitalized for seven days.

• Outcomes are similar to Hospital B.

Hospital B

• Orders only the tests supported by clinical guidelines.

• Discharges patients safely after four days.

• Patients recover just as well.

  
  

Hospital B provided care more efficiently because it achieved comparable outcomes while using fewer resources. BUT this can make it hard because no case is black and white. What may be considered unnecessary for one patient could be essential for another. A patient with pneumonia who is elderly, has multiple chronic conditions, or develops complications may require additional imaging, a longer hospital stay, or more intensive treatment. Value-based care is not about minimizing care or cutting costs at the expense of the patient. Rather, it is supposed to encourage healthcare providers to use evidence-based medicine and clinical judgment to deliver the right care to the right patient at the right time, while avoiding unnecessary tests or treatments that are unlikely to improve outcomes and that could be used for other patients who actually need it. 

So, while this may create a stricter environment for physicians to practice and requires a lot more documentation on their part (because insurances do look at the chart notes to determine whether a service was “medically necessary”), the intent was that the patients be given optimal care. THIS IS NOT TO SAY however, that all physicians operated for the financial incentives under the fee-for-service model as every physician practices differently but the ACA definitely was targeted to prioritize quality over quantity. 

But wait, the ACA did more!

One huge point is that the ACA actually provides protection for patients with pre-existing conditions. Before, patients were denied insurance coverage because pre-existing conditions means more risk that they need to cover more for you. The ACA prevents this by saying: “No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started”(healthcare.gov). By pre-existing conditions I mean things that are chronic, or long lasting, such as cancer, heart disease, diabetes, asthma, ect…

Additionally, the ACA also raised the age of young adults staying on their parent’s health insurance to 26 years. Having said that, a lot of critics say that it prevents young adults from building independence but the intent was that the young adult be given enough time to go to college and find a job without worrying about losing access to healthcare in the meantime. So now, a lot of patients with jobs have two insurances with their job’s insurance being their primary and their parent’s insurance being their secondary (more on primaries and secondaries later). 

AND FINALLY, a lot of people don’t know this but the ACA actually made it possible for a lot of insurances to COMPLETELY cover preventative care visits when using an IN-NETWORK provider. I spoke about how to determine if a provider is in-network in my last blog so definitely go check that out but the whole point of this is that if you have an Annual, a preventative routine colonoscopy, a preventative routine mammogram, or even a blood pressure screening, the insurance WILL NOT CHARGE you for the visit (this includes copays :)). However, because there are so many different plans, the offices you go to will charge you the copay at the time of visit unless you specifically say that your insurance completely covers that type of visit. IT IS your responsibility to know your coverage and benefits. If you are unsure, I highly recommend calling your insurance (even though I know it’s a pain for some plans), speaking to a LIVE representative, and asking them this question.

One thing I do want to explain before moving on is that a preventative visit can often become diagnostic. This means that now, this is an actual “sick visit” and insurance will not cover it. How does this happen? If the physician finds anything upon exam (like a lump or something) then the visit turns from preventative to diagnostic or if the patient mentions any new concerns such as chest or bone pain then the physician needs to address that for the purpose of this visit instead of doing the preventative exam.

Okay… that was a lot. So what do you actually need to know?

If you've made it this far, congratulations, you now know more about the Affordable Care Act than most people! But if you only remember a few things, let them be these:

1. You may qualify for affordable health insurance!

   
   

You don’t have to rely on your job for insurance now! Depending on your income and where you live, you may qualify for Medicaid (AHCCCS) or financial assistance through the Health insurance marketplace 

2. You cannot be denied coverage because of a pre-existing condition

   
   

3. Preventative Care can actually SAVE you money

   
   

Many preventive services, including annual wellness visits, vaccines, blood pressure screenings, and many cancer screenings, can be covered without additional cost when you use an in-network provider for specific insurance plans. Remember: staying healthy is often less expensive than waiting until you become sick!

4. Compare insurance plans every year

   
   

Check to make sure your provider is in-network with the insurance BEFORE applying. Check to make sure they cover the medications you need and that the out-of-pocket maximum and benefits make sense for you and your way of life. Understanding your insurance COMPLETELY is one of the best ways to advocate for health (this requires a lot of time during open enrollment but I promise it is worth it!)  And if you think you've found the perfect plan, be careful because plans change yearly from benefits to who they qualify as in-network so always check just in case. 

Having said all of that, the affordable care act definitely had a huge impact on both physicians and their patients but the more we know, the more we can take advantage of what it has to offer. As always, if you have any questions, feel free to comment and reach out! 

References:

• U.S. Food and Drug Administration. FDA approves first-of-its-kind device to treat pancreatic cancer. Published May 30, 2025. Accessed July 7, 2026.

• HealthCare.gov. Affordable Care Act. Accessed July 7, 2026.

• Centers for Medicare & Medicaid Services Quality Payment Program. Quality Payment Program (QPP). Accessed July 7, 2026.

• Centers for Medicare & Medicaid Services Hospital Readmissions Reduction Program. Hospital Readmissions Reduction Program (HRRP). Updated March 16, 2026. Accessed July 7, 2026.

• Agency for Healthcare Research and Quality Quality Indicators. AHRQ Quality Indicators. Accessed July 7, 2026.

• HealthCare.gov. Coverage for pre-existing conditions. Accessed July 7, 2026.