Affordable Care Act Anniversary Gives Little Reason to Celebrate

President Obama is joining President Biden at the White House to commemorate the Affordable Care Act (ACA), also known as Obamacare. But there is little to celebrate.

Health insurance coverage gains are well below the 25 million predicted by the Congressional Budget Office just prior to the statute going into effect. Nearly all the net coverage gains have come from increased Medicaid coverage, which offers inferior insurance with limited access and long wait times compared to other health insurance. The ACA’s Medicaid expansions led to a tripling of the national improper payment rate for Medicaid which, according to Center for Medicare and Medicaid Services data, now stands at 22 percent. Most of the improper payments are due to eligibility errors, which states are currently forbidden to correct.

The ACA’s best-known feature, the health care marketplaces or exchanges, have not been terribly successful. Marketplace enrollment was offset by a decline in employer coverage. Premiums and deductibles for marketplace plans have soared, a fact that is hidden by the fact that nearly all the enrollees are heavily subsidized by the federal government. For the few unsubsidized enrollees, the average premium and deductible for exchange plans in 2021 for a family of four was roughly $25,000. Moreover, many of the exchanges offer enrollees few plan choices, and those plans generally provide narrow provider networks that often exclude well known providers. Despite all of the hoopla surrounding the ACA exchanges, they only insure roughly 4 percent of Americans.