Taking Stock of the Affordable Care Act, Eleven Years Later

Eleven years ago today, Congress passed the Affordable Care Act, also known as ObamaCare. The bill, which irreversibly altered America’s health insurance markets and healthcare delivery system, went on to become law after President Obama ultimately signed it into law.

The law originally had 10 titles (or big parts), some of which have been substantially changed since passage. Most Americans are familiar with some of the law’s most popular requirements, namely that insurance companies cannot deny coverage to anyone or charge anyone a higher premium based on his or her health status (such as a “pre-existing condition”). The law also notoriously expanded the Medicaid program in states that opted for this change.

What has happened to American health insurance / care in the past 11 years? Here are a few big changes and trends:

Costs continue to soar. The promise to reduce insurance premiums (by an average of $2500 per household) was never fulfilled. Instead, premiums have continued to increase, and healthcare costs remain a top source of stress for both American businesses and families. In 2020, the average annual premiums were $7,470 for single coverage and $21,342 for family coverage. These are just health insurance costs and don’t take out-of-pocket expenses into account. Many Americans continue to delay or skip medical care due to high costs.

Many Americans still lack insurance coverage. One major goal of the ACA was to expand health insurance coverage. While many people gained coverage under the law, most of the coverage expansion was due to swelling Medicaid rolls. In fact, about 75 percent, or 15 million, of the approximately 20 million who initially gained coverage under the ACA were Medicaid enrollees. Among people with private coverage, some gained insurance while others lost it. Memorably, the ACA resulted in millions of cancellations of plans that were not compliant with the law’s many new regulations and requirements. Today about 9.2 percent of Americans are still uninsured. A confluence of factors, including the strength (or weakness) of the economy, drives this.

The “individual mandate” is no longer in effect. Initially, the ACA required all Americans to carry health insurance coverage or face a tax penalty. (Notably, there were many exceptions to the mandate, but most Americans faced the requirement.) In 2017, Congress eliminated the tax penalty (technically reducing it to $0) as part of a tax reform package. This change saves approximately seven million Americans—most of whom are middle class—from the unsavory choice between unaffordable insurance premiums and a tax penalty for going uninsured. But arguably, the mandate was never very effective; it was too low to have real “teeth,” and many people saw a $600-$700 penalty as much more affordable than ACA-level insurance premiums. The mandate isn’t the only part of the original bill to be reversed; an insolvent insurance program for long-term care (“CLASS”) and a heavy-handed government board intended to cut Medicare costs (“IPAB”) have also been abandoned.

The trend in healthcare has been toward consolidation. Many small insurers simply could not weather the storm of the ACA’s many new requirements. Larger insurance companies have come to completely dominate. The same trend has happened among hospitals and doctors’ practices, where large systems have eaten up the small guys like Pac Man. By 2018, around half of all physicians and 72 percent of hospitals were affiliated with hospital systems.

Lawmakers still look to systemic reform. One of the biggest signs of the ACA’s failure is that Americans of various political backgrounds still feel unsatisfied with it. On the Left, lawmakers proposed to move to a single-payer or “Medicare for All” system in hopes of finally achieving universal coverage, albeit through a government-run insurance system. On the Right, lawmakers continue to criticize the ACA and propose reforms that would make private insurance more competitive and affordable. For example, Sen. Ted Cruz and Rep. Chip Roy have proposed to allow all Americans to use Health Savings Accounts to pay for health expenses (including insurance premiums). This would also lead to an increase in insurance coverage, because more Americans would be able to afford to get and stay insured, and because it would weaken the strong (and regressive) tie between employment and insurance coverage.

Whatever the future holds, Americans will continue to adjust to the above realities and other consequences of the Affordable Care Act. It’s hard to believe that 11 years have passed since the House approved this historic and transformative legislation. A lot has changed, but one thing has not: Health care has continued to be an issue of top importance to Americans. And it will continue to be for years to come.