But you would be forgiven for thinking the real purpose of the ACA was to lower the cost of health care for everyone: It is named, after all, the “Affordable Care” Act. And Democrats sold it on that premise.
“In the end, our goal is to make health care more affordable for families, businesses, and the federal government. If you have health insurance, the reforms we seek will bring stability and security you don’t have today,” President Barack Obama said in 2009 during a speech to Congress as the bill was being debated. “For those who don’t, we’ll offer you quality, affordable choices. And we’ll finally keep insurance companies from discriminating against those who are sick and need care the most."
But in reality, affordable health care is still elusive. Most of the law’s provisions and funding focused on “those who don’t” — on expanding coverage to the uninsured. The vast majority of ACA spending was earmarked for financial assistance for people who buy insurance on the marketplaces or for covering the cost of expanded Medicaid for people who are in or near poverty.
For many of those people, the law has delivered clear benefits.
Insurance companies can no longer deny them coverage for preexisting conditions, and the federal government is stepping in to cover much of their health care costs. According to one study, Medicaid expansion saved about 27,400 lives from 2010 to 2022. Bankruptcies for Medicaid patients dropped. Evaluations of the ACA marketplaces likewise find that the people signing up for those plans who were previously uninsured are now better off.
But those wins encompass, at most, about 13 percent of the population. For everyone else, the ACA’s record is mixed.
Yes, even employer plans are now required to cover preventive services, including some forms of birth control, for free. Yes, those plans also now have to place an annual limit on how much patients can be asked to pay for their medical care. But more diffuse savings — going to your annual physical and not owing a $30 copay is nice — aren’t as life-altering as getting covered for the first time in years. The new annual out-of-pocket limits only come into play if you have a serious medical situation; they are a valuable safety net, but not necessarily something that makes more routine health care more affordable.
Nevertheless, the ACA has grown in popularity over time as more people have gained health care access. But it’s proven not to be enough to fix the problem of rising costs.
Health care costs are still rising too fast — and we don’t have a great plan to stop it
Democrats said they want to lower the country’s overall health care costs within the framework of the ACA, but the law’s provisions to actually do that were limited. The current law allows the government to run pilot projects that could bring down the cost of healthcare, but while some have shown promise, they have not been adopted widely enough to fundamentally change how healthcare is financed in the United States.
But the ACA is not a major financing reform bill. It did not fundamentally change how providers set prices for their services. And the law’s new insurance requirements to cover all people, no matter their health status, and to provide a broader suite of benefits actually pushed costs in the other direction. It is simply more expensive to require insurers to cover everyone.
Over time, though, there have been some positive effects on costs. Medicare spending has flattened, and the ACA likely deserves much of the credit for that, given its direct payment cuts. But if you look at other measures, such as medical price inflation or workers’ contribution to their premiums, as New York Times economics reporter Talmon Joseph Smith pointed out on X, it’s hard to see any discernible impact from the ACA at all.
Obama and congressional Democrats hoped that the ACA would bend the cost curve over time. Part of the plan was those targeted payment reforms. Part of it was the belief — still contested to this day — that giving people health insurance would lead to them being healthier in the long term, which would save money over time.
But, at least so far, the law appears to have merely put a ding in the cost curve.
Health care costs are growing at a slower rate, but they are still growing: According to a 2020 Health Affairs review, national health spending grew at a 6.9 percent annual pace from 2000 to 2009 and then a 4.3 percent pace from 2010, the year the ACA was passed, to 2018.
