Words Affordable Care Act ACA written on a paper.
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The Affordable Health Care Act, a.k.a., Obamacare, was passed by the House of Representatives shortly before midnight, November 7, 2009, with a majority of democrats and one republican. At the time, proponents of the bill believed it would reduce the rate of increase in health insurance premiums and insure millions of uninsured Americans. Now, 10 years later, we can assess its success or failure by examining these claims. Here are the facts.
Average Annual Health Insurance Premiums (2000 to 2019)
Assessing the rate of change in average health insurance premiums can be problematic as there are numerous factors to consider including: geographical location, age and gender, company size, union versus non-union coverage, and single versus family coverage. We will consider some of these factors.
The following chart shows the annual rate of increase in health insurance premiums for single and family coverage from 2000 to 2019. As the data shows, premiums rose at a much faster pace in the years prior to the ACA. The exception to this was 2011, when premiums increased by 7.5% (single coverage) and 9.5% (family coverage) from the prior year. Despite 2011, the average annual increase in health premiums has been lower since the ACA became law. Premium increases were also lower leading up to the ACA. For example, from 2006 to 2010, premium increases averaged 4.5%. Then (excluding 2011), from 2012 to 2019, premiums increased at an average rate of 3.6%, the lowest rate in recent history.
% Increase in Average Health Insurance Premiums
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The following table contains a summary for the pre- and post-Obamacare periods for single and family coverage.
Health insurance premiums rose by 7.9% and 8.2% for single and family coverage respectively in the 10 years before Obamacare. Since then, the average annual rate of increase was 4.0% for single coverage and 4.6% for family coverage.
Percent and Number of Uninsured Americans (2009 to 2019)
Obamacare supporters claimed it would reduce the number of uninsured individuals. Has it? The next chart provides the answer. The blue line represents the percent of uninsured each year while the red columns show the number of uninsured based on the population at that time. As the chart illustrates, the number and percentage of uninsured Americans remained high through 2014. It then fell, reaching a low of 8.6% in 2017. Even though it has been rising slightly since then, it is still well below the pre-2015 figures.
Supreme Court and Obamacare
The U.S. Supreme Court, with a conservative majority, has signaled that it may not eliminate the ACA. While short of a formal declaration, unless the court finds the law to be unconstitutional, it will likely survive. I expect the court will examine the components of the law to see if any part fails to meet constitutional muster. Even if part of the ACA is deemed unconstitutional, Justice Barrett has stated that she would determine if that part of the law could be severed, leaving the ACA intact. If this cannot be done, they could strike it down. However, this is not a given. When Justice Roberts cast the deciding vote in favor of the penalty tax, I was surprised at the logic behind the ruling. I was not alone as this part of the ACA has since been removed.
Will Obamacare survive? Has it been beneficial? While we cannot say with certainty that Obamacare has led to lower premiums, we can say that it has provided coverage for millions of previously uninsured Americans.
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