The Affordable Care Act (ACA) was signed into law 16 years ago, and its advocates often point to simple metrics as evidence of success. That means approximately 20 million people who were previously uninsured were able to enroll in a health insurance plan. While this number is true, it is incomplete and increasingly misleading. The ACA’s greatest accomplishment was expanding the number of people with insurance policies. But those cards came at a price. Currently, for most people, insurance does not cover the care they need.
What ACA expansion looks like in action
Let’s start with where those profits came from. Most of the coverage expansions promoted by the ACA were in Medicaid, not private insurance. The law would allow millions of healthy working-age adults to enroll in programs that have historically served people who are sicker, poorer, and have more complex medical care. The improvements in health outcomes that ACA proponents claim are due to simple math rather than care provided. Adding younger, lower-risk groups to the system improves average outcomes. Focusing on those who gained insurance because of the ACA ignores what the law did for others.
Having insurance no longer means being protected in any meaningful sense.
The primary outcome of the ACA was not expanded coverage. It was a fundamental redesign of insurance. A variety of new requirements, including medical loss rates, standardized benefits, and new actuarial rules, constrained how plans were structured and expenses were managed. Insurance companies did not eliminate these costs. They simply moved them, or better yet, passed them on to consumers. Insurance premiums have increased. Deductibles increased even faster. In addition, the ACA promoted other predictable responses to enhance access, from narrow networks to stricter prior authorization requirements. Having insurance no longer means being protected in any meaningful sense. The new standard introduced by the ACA means coverage will only begin if a member has already paid thousands of dollars in premiums.
For many people, insurance alone is not enough
Today, more than half of Americans (approximately 90 million people) with employer-sponsored insurance experience a year in which their insurance does not cover a single dollar of their actual medical expenses. They pay a monthly premium and then pay again when they seek treatment, this time out of pocket. They have insurance cards. They do not receive medical care covered by insurance.
There is insurance in the background, but coverage is more theoretical than practical.
This is not a problem happening on the fringes. It has now become a common experience. Most of the care for people of working age occurs outside the hospital, including primary care visits, lab tests, imaging tests, and outpatient procedures. For the majority of fully insured Americans, their care is self-funded. There is insurance in the background, but coverage is more theoretical than practical.
Defenders of the ACA will argue that this is still “coverage” and that insurance still provides protection against catastrophic events. Even if that were true, the law wasn’t sold that way. The ACA mandated essential health benefits rather than bare-bones catastrophic plans. But millions of Americans are unable to access the comprehensive coverage they paid dearly for, at least not until they spend large out-of-pocket costs (in some cases thousands of dollars). On paper, the ACA promised widespread benefits and cost savings. In practice, it has led to soaring prices and care that is slow to improve at best and often denied.
This was no accident. This was inevitable due to the structure of the ACA, and resulted in a system redesign that goes beyond the framework of exchanges. It has reshaped the much larger employer-driven insurance market for the worse. While the ACA added 20 million people to the insured population, it ushered in the near-universal implementation of high-deductible plans (with deductibles that many members never meet in a given year) to normalize out-of-pocket costs for the more than 165 million people who had employer-sponsored insurance.
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