Final answer:
Obamacare, or the ACA, encouraged uninsured individuals to obtain insurance through the individual mandate, which imposed a penalty for not purchasing insurance to ensure a balanced insurance pool. The initiative was funded by redirected Medicare funds, increased Medicare taxes on the wealthy, and an excess tax on high-end plans, despite potentially increasing the federal debt.
Step-by-step explanation:
The 'Patient Protection and Affordable Care Act' (ACA), commonly known as Obamacare, encouraged uninsured people to obtain their own insurance in a few ways, one of which was through the individual mandate.
This mandate required all individuals who do not receive healthcare through their employer or a government program to purchase insurance or face a fine, which was initially $695 per adult if they chose not to buy it. The individual mandate was designed to include more low-risk individuals in the insurance pool, thus balancing the insurance market and keeping premiums relatively affordable for everyone.
Despite the elimination of the penalty in 2019, ACA coverage has continued to rise. The increased coverage under the ACA was funded by several sources: redirection of funds which otherwise would have gone to Medicare, an increased Medicare tax of an additional 0.9% on wealthy Americans, and a 40% excess tax on high-end healthcare plans. However, the Congressional Budget Office estimates that the ACA will still increase the federal debt by approximately $137 billion over the next decade.