Even before the Affordable Care Act became law, about 90 percent of the conversation and criticism of it was about coverage. Little has been said about its ability to control costs.

March 23, the ninth anniversary of the ACA’s passage, presents a good opportunity to examine its legacy on cost control — a legacy that deserves to be in the foreground, not relegated to the background behind the exchanges, Medicaid expansion, and work requirements.

One month after the ACA had passed, the Office of the Actuary of the Department of Health and Human Services projected its financial impact in a report entitled “Estimated Financial Effects of the ‘Patient Protections and Affordable Care Act’, as Amended.” The government’s official record-keeper estimated that health care costs under the ACA would reach $4.14 trillion per year in 2017 and constitute 20.2 percent of the gross domestic product (GDP).


Fast forward to December 2018, when that same office released the official tabulation of health care spending in 2017. The bottom line: cumulatively from 2010 to 2017 the ACA reduced health care spending a total of $2.3 trillion.

In 2017 alone, health expenditures were $650 billion lower than projected, and kept health care spending under 18 percent of GDP — basically a tad over where it was in 2010 when the ACA was passed. It did all of this while expanding health coverage to more than 20 million previously uninsured Americans.

Compared to the 2010 projections, the government’s Medicare bill in 2017 was 10 percent ($70 billion) less, and spending for Medicaid and the Children’s Health Insurance Program was a whopping $250 billion below expectations (partially — but only partially — due to the failure of some states to expand the program). The actuary had predicted in 2010 that employer-sponsored insurance would cost $1.21 trillion in 2017, but it came in at $1.04 trillion, a difference of $170 billion for that year.

Put another way, health care spending in 2017 was $2,000 less per person than it was projected to be. And for the 176 million Americans who have private employer-sponsored insurance, their lower premiums averaged just under $1,000 per person.

Barack Obama pledged on the campaign trail and as president that he would sign a health care bill that lowered family health insurance premiums by $2,500. Conservative politicians and pundits roundly mocked him. Yet the ACA has more than delivered on that promise, saving about $4,000 per family. And these lower health care premiums probably contribute to the recent rise in workers’ wages.

One reason the ACA’s enormous success in cost control goes unappreciated is that no one experiences the difference between projections and reality. What could have happened is intangible. All we feel is what actually happens.

At least three trends make it hard for Americans to appreciate these lower costs. First, employers are foisting more of the cost of health insurance onto employees. Employees’ share of health premiums has gone up 32 percent since 2012 while the employer portion has gone up just 14 percent. Second, drug prices are rising and Americans are finding copays for them more and more onerous. Third, more and more Americans are enrolled in high-deductible health plans. For them, a $2,000 or $3,000 deductible is stressful even if they never actually pay it.

Why have health care expenditures risen more slowly than projected? No one is entirely sure. But one thing is certain: The slow growth in health care costs in 2017 is not because of the Great Recession of 2008. We are now in the second-longest economic recovery in American history — eight years and counting of continuous economic growth. If the Great Recession had an impact on health care costs, it is long gone. It is possible that high-deductible plans contributed by encouraging people not to use as many services and shop for care.

Hence the most likely explanation has to be the ACA. It changed how physicians and hospitals are paid, shifting toward more value-based payments. It required reducing wasteful and expensive readmissions and encouraged efficient redesign of care. And it spurred the private sector — insurers and employers — to try their own payment reforms, such as reference pricing, to control costs. Indeed, the latest data suggest a real slowdown in utilization of health care services. It will take health economists a few more years to sort out all the contributing factors.

The ACA has helped bend the cost curve. But we should not rest on this $650 billion savings success. We can do more.

Policymakers have increasingly come to understand that high prices are the biggest contributor to the growth in the cost of health care. We need to rein in prices, and there are several good options for doing this. First on the list must be regulating drug prices. We spend about 56 percent more than other developed countries on drugs. We need national — not just Medicare — drug price negotiations, which other countries have employed to great effect.

Second, Congress might limit the prices that hospitals can charge private insurers to 140 percent of what Medicare charges. This would prevent the exorbitant prices that hospital systems demand when their bargaining leverage is enhanced by creating local monopolies.

Third, we could introduce competitive bidding for Medicare Advantage plans. These are the private insurance plans that Medicare recipients can choose to enroll in instead of traditional Medicare. They now account for one-third of Medicare enrollees and are the fastest-growing part of Medicare. Instead of having Medicare set the benchmark premium it will pay, we should allow insurers to set their premiums and compete in the marketplace.

Other policies to control prices include enhanced anti-trust enforcement of hospital mergers and acquisitions of physician groups, and emulating Massachusetts in setting a public cap on health cost increases, linking the growth in health costs to growth in the state economy, and then shaming providers or payers that exceed the limit.

Despite constant criticism and occasional sabotage, the Affordable Care Act has successfully expanded health insurance coverage — even though it included individuals with pre-existing conditions — and controlled runaway health care costs. We need to build on its tremendous cost-control success.

Ezekiel J. Emanuel, M.D., is an oncologist and vice provost for global initiatives, university professor, and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania; and a senior fellow at the Center for American Progress. He worked in the White House on the Affordable Care Act from 2009 to 2011. His most recent book is “Prescription for the Future” (PublicAffairs, 2017).

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  • Everyone has an example of how their healthcare premiums rose, ignorant to the fact a ridiculously large amount of people were added to that pool. The premium is lower as an average sum. This is what its like to no longer be priveleged enough to ignore that the vast amount of people that needed Healthcare were denied insurance.

    That’s not the point of health insurance. Privatized health insurance companies messed up and got the punishment they deserved.

  • No clue what these people are talking about. Every year, my coverage has increased. THIS year it has almost doubled. It was, and is, a scam. If you are to consider what these ‘providers’ have spent vs what they have earned they are making billions. Why can’t people have jobs? I can’t wait for the spoiled generation to die off. But it’s still like 15 years away.

  • The Government medical bill is less because we have, since Trump took office in 2017, the lowest unemployment rate in the history of this nation, so we have much more people covered by plans offered by the employers. It has NOTHING to do with the ACA.

    My experience with ACA. Before ACA, I had a PPO plan with 500 dollars deductible, the monthly premium was a little above 25 dollars per week. It covered everything. I could go to any doctor with a little 10 dollars co-pay. Obama considered that a Cadillac Plan, so my employer got taxed really high for that, so my employer started offering a HSA plan with 5,000 dollar deductible (10 x more!), no more co-pays (doctor visits paid in full till deductible is met) and my premium is 75 dollars per week.

    • These numbers are from 2010 to 2017. Trump had no policies in 2017 that had any effect on unemployment numbers. Nice try.

    • So this is how trolling works. No Caddy tax on health insurance EVER went into effect. Don’t believe corporations when they lie to you to ruin your life and deflect the blame. Or just don’t lie to yourself.

  • ACA a great idea… well thought out and implemented up to and including the IRS ruling that defines what affordability is. Unfortunately some families don’t qualify because one of the married spouses has insurance through their employers. Research the Family affordability Glitch. Take away not everyone can be a winner.

  • I used to work for BCBS of [state]. When our IT jobs got outsourced to India, I took a 20% pay cut at my new employer “because we have really good [and expensive] medical insurance”. Ok, so BCBS gave itself a huge “hometown discount” (or my new employer was really greedy). That’s just normal business. But then ObamaCare came along. The insurance premiums skyrocketed, my employer gutted our coverage, and we were left with low pay and horrible insurance.
    To avoid having to choose medical care or food and housing, we went on CareSource (medicaid for working people). We have been off Anthem for 3 years now, but CareSource still insists that we have Anthem coverage. So we have to pay our medical bills out of pocket, or do without medical care. THAT is my personal experience with “the government’s Medicare bill [is] less”.

  • Opponents of ACA point out that insurance rate increased from 7% to over 15% or more per year after the ACA was implemented. The problem with that analysis is the prior to ACA, insurance companies ‘cherry picked’ their customers by not covering ‘pre-existing conditions’, etc. Of course, rates will increase if you have to insure everyone, since people with chronic conditions will always use health care services more often and greater expense. Does that mean we shouldn’t cover those people, let them take bankruptcy or die?

  • This article is so full of lies it is not even funny. Premiums went down? Where? My wife’s premiums have tripled since ACA’s inception. And that is with going from a low deductible plan ($2,500/year) to a high deductible plan ($7,000). As for the increase in wages, that is the result of a business-friendly economy that has reduced business taxes and those business owners passing along their savings in the form of pay raises. This is the trickle down economics that liberals despise. Why do they despise it? Because they know it works and in ways they do not want it to work. As long as they can keep a majority of Americans in poverty, they can offer them “solutions” that will keep the poor voting for them. Conservative politics strive to get more money in people’s pockets, more people working so there is more money spent, providing a continuous improvement in the overall economy. Liberals want to play Robin Hood. The rich are glad to share and do share; check out all the money they give away each year. But they must produce a profit to keep their workers employed. When liberals unleash their tactics of crippling businesses with outlandish tax rates and minimum wage requirements, those businesses decide to close up shop here and move to a country where they can turn a profit. Finally, how do you know when a liberal is lying? Just watch their lips. If the lips are moving they are lying.

    • I feel like I could have taken you’re comment at face value until you had to get insulting at the end. That’s the problem with our current culture. They don’t feel like they can make their point unless they’re insulting the people who have a different view than they have. It’s ridiculous really. I might have paid more attention to what you had to say if you had not ended the way you did. Smh.

  • This article is incredibly misleading. High deductible healthcare plans have deductibles over 10000 for families. Not 2000 -4000 as this nonsense suggests. Nice to know this is simply propaganda not actually news.

    • That’s exactly what this article is. Leftist Propaganda
      The deductable in our plan was 500 dollars in a PPO plan before ACA. Because of that, it was considered a Cadillac Plan. My employesr was being highly taxed for that, so it started offering a HSA instead, with a reduction in coverage, and deductable rose to 5,000 dollars (10 x).

  • There is something very faulty with the whole premise of this article. The so-called savings is based on a projection. Maybe the projection was wrong.

    • Eric, can you tell me what interest rates will be 5 years from now? Nobody can with certainty. So here is a simple projection: healthcare costs increased 6.4% per year before the ACA was passed, and 4.3% per year after it was passed. Based on historical records we can project for 5 years using those known rates of cost increases:

      Between 1960 and 1965, health care spending increased by an average of 8.9 percent a year.
      From 1966 to 1973, health care spending rose by an average of 11.9 percent a year.
      From 1974 to 1982, health care prices rose by an average of 14.1 percent a year.
      Between 1983 and 1992, health care costs rose by an average of 9.9 percent each year.
      Between 1993 and 2010, prices rose by an average of 6.4 percent a year.

      Since 2010, when the Affordable Care Act was signed, health care costs rose by 4.3 percent a year. It achieved its goal of lowering the growth rate of health care spending.

      $100.00 @ 6.4% after 1 year = $106.40

      $106.40 @ 6.4% after 1 year = $113.21 (year 2)
      $113.21 @ 6.4% after 1 year = $120.46 (year 3)
      $120.46 @ 6.4% after 1 year = $128.16 (year 4)
      $128.16 @ 6.4% after 1 year = $136.37 (year 5) $123.43 at 4.3% per year for 5 years.


      Note 1: By 1965, households paid out-of-pocket for 44 percent of all medical expenses. Health insurance paid for 24 percent.

      Note 2: The sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation’s health care costs. Most of these patients are Medicare patients.

      Note 3: A 2003 study found that administration made up 30 percent of U.S. health care costs. It’s twice the administrative costs in Canada. About half of that is due to the complexity of billing.

      Note 4: For example, U.S. private doctors’ offices need seven people to do billing for every 10 physicians. A big reason is that there are so many types of payers. In addition to Medicare and Medicaid, there are thousands of different private insurers. Each has its own requirements, forms, and procedures. Hospitals and doctors must also chase down people who don’t pay their portion of the bill. That doesn’t happen in countries with universal health care.

  • Mr Gosselin,
    It is unfortunate that no one is removing paid industry trolls, and content marketers from this site. Perhaps the editors are either unaware of these deceptive marketing strategies, or are paid to allow them. This kind of content marketing, and engaging people on sites like this is spreading massive amounts of misinformation and lies.

    • Just so you know, Mavis, several readers have asked us to block your comments because they perceive them as “trolling.” If we receive verifiable evidence of this practice, we stop it.

      Pat Skerrett

    • Mr Skerrett,

      Thank You for the response. Sometimes I feel like I am the only person on here that is not selling something or a corporate mouthpiece. I have been noticing a lot of commenters who are actually selling something, books, vitamins or pseudo science cures. There real concerns are the industry, and think tank workers who monitor these sites, and appear to comment as regular people. Frankly I am kind of horrified by sites like this. It is easy to see how so many people have been misled, baffled or hornswoggled.

    • Mr Johnson,
      Instead of engaging in personal attacks (are we surprised), combat facts. I previously wrote “In 2013, President Obama said the ACA bill was projected to cost 896 billion dollars over the first 10 years. The total is now close to two trillion over the same 10 year period. You can’t save money on an inflated projection. You can only save money over actual costs.”

      Because I dare question your authenticity, you attack me personally. Just look up the facts. I’ve been a health insurance broker for over 30 years. In my state of New Hampshire we had an average individual ACA rate increase in 2017 of 18%, 2018 of 54%, and a 2019 decrease of 14%, because the rate increase of 2018 overshot what was needed. That’s an average rate increase in the past three years of 19.33%. Prior to ACA, our average rate increase was less than 7% / per year over a ten year period. What our state has experienced with ACA rate increases, deductible and out-of-pocket yearly increases is not unusual and is in fact a story shared by most if not all states in our country. If you truly believe what you write, please explain to your readers how your numbers clash with reality. Attack me again, and I will copy shortcuts to our New Hampshire Insurance Department website so you and your readers can look up facts for yourself.

    • Dear Mr Emanuel,
      For the purpose of transparency, here is your state of Pennsylvania’s insurance department website reflecting the departments approval of 2018’s ACA rate increases. 2019 rates have not been displayed yet.


      Twelve insurance companies filed and got approved for an AVERAGE rate increase in your state of 30.78% for 2018 plans. One company got approved for a 55.07% increase.

      I quote you from your article:
      “Barack Obama pledged on the campaign trail and as president that he would sign a health care bill that lowered family health insurance premiums by $2,500. Conservative politicians and pundits roundly mocked him. Yet the ACA has more than delivered on that promise, saving about $4,000 per family.”

      Mr Emanuel, in light of the massive health insurance rate increases never seen before the advent of ACA countrywide, how do you reconcile this with your position that we should be grateful how much money ACA has saved us?

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