Difference between Obamacare and Romneycare

According to Barak Obama, the Affordable Care Act (aka Obamacare) borrows heavily from similar state-level legislation (aka Romneycare) implemented in Massachusetts in 2006 and passed by then-governor Mitt Romney. The ACA exchanges' less-than- smooth launch, combined with recent revelations that many people who buy health insurance on the individual market are receiving cancellation notices, has some Americans wondering if the new law will work. President Barack Obama cites the success of Massachusetts' health-care reform as proof that, despite a rocky start, the law will work to provide nearly universal coverage to all Americans.

What is Obamacare?

At the national and state levels, both Obamacare and Romneycare attempted to lower the number of uninsured people. Obamacare dealt with an uninsured population of approximately 45 million (almost 15%), whereas the uninsured population in Massachusetts in 2006 was approximately 8%. Other goals included enacting consumer protection rules that would prohibit health insurance firms from cancelling coverage retroactively or from denying coverage to those with pre-existing diseases.

What is Romneycare?

The Massachusetts statute was signed into law in 2006 by the then-Governor Mitt Romney. Prior to the statute, known as "Romneycare" during Romney's failed presidential campaign, more than 7% of Massachusetts people lacked health insurance. According to the Blue Cross Blue Shield of Massachusetts Foundation's 2011 five-year progress report on Massachusetts reform, the state's uninsured rate has reduced to less than 2%. During the same time span, the nation's average uninsured rate increased to well than 16%.

Similarities between Obamacare and Romneycare

Individual and corporate requirements − Both laws force anyone who can afford insurance to buy it or suffer a financial penalty. Massachusetts legislation required enterprises with more than ten employees to provide health benefits to their employees or pay a $295 "Fair Share" fee per employee. In anticipation of the ACA business mandate, this provision was abolished in July 2013. Businesses with 50 or more full-time employees must provide health insurance or pay a $2,000 per employee penalty, with the first 30 employees exempt. The ACA's business mandate goes into effect on January 1, 2015.

State-based exchanges − Under both statutes, exchange authorities are established to operate health insurance marketplaces. The exchanges are websites where residents can compare and buy private insurance policies that fulfil minimal coverage levels. The goal of these exchanges is to reduce premium costs by encouraging competition, as well as to provide policies with comparable levels of coverage for ease of comparison. Both laws also mandate guarantee issue, which means that consumers cannot be denied coverage because of pre-existing medical issues

Subsidies for low-income families − While the number of individual subsidies varies, as do the income criteria for qualifying, both legislations provide financial support to low- income households in order to make health insurance affordable. Massachusetts subsidises private health insurance for families and individuals earning up to 300 percent of the federal poverty line (FPL). Subsidies are available under the ACA for persons earning up to 400% of the FPL.

Difference between Obamacare and Romneycare

The following table highlights the major differences between Obamacare and Romneycare −




Limits on benefits

It is prohibited for both a lifetime and yearly basis

It is not prohibited but most of the MA insurers do not place limits

Individual mandate

Yes. Individually one must buy health insurance for themselves and for those who are dependents. By any chance, if they don’t then they need to pay a penalty when they file their taxes.

Yes, it is necessary for all to buy this health insurance.


This is included under no fee preventative care

No, contraception is not included in Romneycare.

Preventative care

Free of cost (it is covered in premium)

Co-pay, however, it must be covered without a deductible

Subsidized insurance

Yes, for those who have earning up to 400% of poverty level

Yes, for those who have earning up to 300% of poverty level. All free for those who have earning up to 150% of poverty level.

Inclusion of pre- existing conditions

Yes, according to this low, the insurers are required to cover all pre-existing conditions

According to it, Insurers are required to cover, but they are allowed to limit their coverage of some conditions up to six months

Employer Mandate

Yes, all those companies that have 50+ employees required to give healthcare coverage to at least 95% of the total workforce. This coverage should be affordable (Cost should be less than 10% of household income) and should give minimum value

Yes, for all companies that have 11 or more employees

Fine for those employers not giving insurance

A fine of $2,160 employees/year if no insurance plan is offered and at least one employee will receive a premium tax credit or subsidy.

If the plan is offered but not made affordable for the employee or doesn’t meet the conditions of minimum value, a premium tax credit of $3,240 per employee per year is available.

$295/ employee for all those company with more than 11 employees

Age limit for children under parent’s plan

The children must stay on their parents’ plan until the age of 26

The children can stay on their parents’ plan until the age of 26 or unless they are independent for 2 years, whichever is sooner.


To summarize, both Romneycare and Obamacare rely on a private sector insurance-based model for public healthcare, but Obamacare appears to be far more efficient in terms of subsidized insurance and preventative care. However, there are some areas where Romneycare outperforms Obamacare, like the employer mandate, where Romneycare has made it mandatory for all those employers who have at least 11 employees under him or her, but Obamacare has a different rule.