The ACA at Five: What Lessons Can We Draw?

Having assessed in the last three posts the impacts of the Affordable Care Act (ACA) over the last five years, we have seen that the ACA will not bring universal access, contain health care costs for patients and tax payers, or improve the quality of care.

These are some of the main lessons we have already learned from the ACA’s initial five years.

1. Health care “reform” through the ACA was framed and hijacked by corporate stakeholders, themselves in large part responsible for our system problems of health care.

Although deregulated markets in our medical-industrial complex were largely responsible for problems of access, costs and quality of health care for many years, policy makers and framers were unwilling to confront corporate stakeholders of the existing system where the business “ethic” prevails. Thus the interests of insurers, the drug and medical device industries, hospitals and organized medicine took precedence over the needs of patients throughout the political process. By the time the ACA was enacted, some 1,750 organizations and businesses had hired about 4,525 lobbyists, eight for every member of Congress, at a cost of $1.2 billion, to get the kind of legislation they wanted. (1) Drafters of the ACA often had conflicts of interest; Elizabeth Fowler, for example, as the lead author of the Senate Finance Committee’s bill, had served as vice president for public policy for Wellpoint, the country’s second largest insurer. (2)

2. We can’t contain health care costs by letting for-profit health care industries pursue their business “ethic” in a deregulated marketplace.

All of the corporate stakeholders in health care have seen a bonanza of profits through new subsidized markets with no significant price controls. Health insurer stocks have soared, as illustrated by UnitedHealth Group, the nation’s largest insurer, which saw its share price rise from $30.40 in March 2010, to $113.85 this month, a 375 percent increase. The other five of the six top insurers more than doubled or tripled their stock value. (3) The ACA has rewarded hospitals with several million more paying customers through the individual mandate and Medicaid expansion as they merge and consolidate with larger market shares. All this has led to higher prices. As one example, charges for medical procedures rose four times faster than the rate of inflation in 2012. (4)

3. We can’t reform the delivery system without reforming the financing system.

Drafters of the ACA never questioned the multi-payer financing system which is a big part of our problems. Ignoring the experience of most other advanced countries, they kept not-for-profit, single-payer public financing off the table. Private insurers have successfully avoided costlier, sicker patients for many years. While the ACA sets some limits on this behavior, the industry has found new ways to continue to game the new system for their business interests, as we shall see in our next post. Today, the “partnership” is still close between government and the private insurance industry. They both need each other—the Obama administration, which counts on private insurers to participate in expanding their markets, and insurers, who welcome nearly $2 trillion in subsidies expected over the next ten years. (5)

4. It is futile to embark on unproven and untested incremental tweaks to our present system while ignoring health policy and experience around the world.

As we have seen in recent posts, the ACA embarked on various new initiatives that were either untested or had failed in earlier years, including increased cost-sharing with patients, changes in payment policies, accountable care organizations, and further privatization. All of those initiatives ignored the role of the deregulated marketplace in perpetuating our access, cost and quality system problems.

5. In order to have the most efficient insurance coverage, we need the largest possible risk pool to spread the risk and avoid adverse selection.

It is well known that the larger and more diverse the risk pool is, the more efficient and affordable insurance can be. About 20 percent of the population accounts for 80 percent of all health care spending. But the ACA has opted to leave some 1,300 private insurers in place, with continued increased fragmentation of risk pools. Risk pools under the ACAare made smaller by many young people not signing up through the exchanges, one-third of middle-aged men opting to stay uninsured (6), and many exemptions to the individual mandate given by the Department of Health and Human Services (HHS).

6. The ACA has been much more disruptive to our system than a simplified single payer alternative would have been.

The key question that was never asked or answered by the framers and promoters of the ACA was who is the system for— corporate interests or patients? Instead of minimizing disruption by corporate stakeholders, the ACA brings us increased disruption for patients: a more confusing and unstable system, more discontinuity of insurance coverage, disruption of many doctor-patient relationships, less choice of hospitals and physicians through narrowed (and changing) networks, and more uncertainty. As one example of how ineffective accountable care organizations (ACOs) have been, a recent study found that two-thirds of office visits to specialists were provided outside of assigned ACOs, especially for higher-cost patients with more office visits and chronic conditions. (7)

7. We can’t trust many states to assure an adequate safety net for the uninsured and underinsured.

Red states and those that have opted out of Medicaid expansion give us no confidence that they will assure that the uninsured and underinsured will receive sufficient essential health care. Many states are cutting already low Medicaid reimbursement, with the result that more physicians will not accept new Medicaid patients. (8) The ACA gives states wide latitude to determine what “adequate access to covered services” is. Churning in coverage will continue—a 2014 study found that 40 percent of adults likely to enroll in Medicaid or subsidized marketplace coverage will have a change of eligibility within 12 months. (9) And at the national level, the GOP is targeting big cuts in Medicaid and food stamps. (10)

Can this trajectory be changed going forward? Based on the lessons above, the answer has to be “No,” though many supporters are not yet prepared to acknowledge this. It is unfortunate that we will have to see ongoing profiteering and administrative waste at patients’ and taxpayers’ expense before we can get health care right in this country. Our next blog will address one of the main culprits perpetuating our dysfunctional health care system—the private insurance industry itself.


1. Center for Public Integrity, as cited by Moyers, B, Winship, M. The unbearable lightness of reform. Truthout, March 27, 2010.

2. Connor, K. Chief health aide to Baucus is former Wellpoint executive. Eyes on the Ties blog, September 1, 2009.

3. Potter, W. Health insurers’ stock soars as they dump small business customers. The Progressive Populist, March 1, 2015.

4. O’Leary, W. On the road to corporate health care. The Progressive Populist, March 1, 2015.

5. Pear, R. Health law turns Obama and insurers into Allies. New York Times, November 17, 2014.

6.Flavelle, C. Obamacare’s dropouts are middle-age men. Bloomberg News, March 17, 2014.

7. McWilliams, JM, Chernew, ME, Dalton, JB et al. Outpatient care patterns and organizational accountability in Medicare. JAMA Internal Medicine, April 21, 2014.

8. Pear, R. For many new Medicaid enrollees, care is hard to find, report says. New York Times, September 14, 2014.

9. Summers, BD, Graves, JA, Swartz, K et al. Medicaid and marketplace eligibility changes will occur often in all states; policy options can ease impact. Health Affairs 33 (4): 700-707, April 2014.

10. Peterson, K. GOP targets Medicaid, food stamps. Wall Street Journal, March 13, 2015: A 5.

Adapted in part from my new book, How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans.