The Truth Behind the Affordable Care Act

Release Date
March 23, 2016


Economics Healthcare Politics & Policy

The Affordable Care Act (popularly known as “Obamacare”) promised to lower costs and give everyone in America access to health care coverage. 6 years later, has it lived up to its promises?
Did the ACA get you covered or not? Have your own health care bills gone up or down?
Check out more of Dr. Davies’s research
For more videos about where we’ve been and where we’re headed in health care, check out
We’ll also be holding a livestream tomorrow (3/24) at 3:00pm (EST) on our Facebook page with Dr. Robert Graboyes. How do we fix the current problems in our health care system to create better care for more people at lower costs? Check out his video on innovation in health care and be sure to tune in to ask your questions about the economics of health care!

From Fortress to Frontier: How Innovation Can Save Health Care (video): How can we accomplish the real goal of health care reform- better care for more people? Robert Graboyes explains the solution is simple: unleash innovation.
Health Care by Learn Liberty (website): Your one-stop shop for resources about liberty and health care such as blogs, videos, and more.
Doctors on Demand (video): Scholar Adam Thierer explains how freedom to innovate can lead to better, more affordable health care for all.
America’s Health Care System (online program): Join John Ammon, MD, Jeffrey Singer, MD, and Prof. Bob Graboyes for an On Demand Program exploring the history of health care in America, the current policy issues the industry faces, and possible solutions.

>> More than five years ago the Affordable Care Act, popularly known as Obamacare, was signed into law. Two years ago the law took affect. The question today is has it worked? Politicians promised that the Affordable Care Act would solve two important problems. It would put an end to decades of rising health care costs, and it would ensure that everyone had access to health insurance.
But the ACA in practice looks a lot different from what was promised. Politicians promised that the Affordable Care Act would cut the cost of a typical family’s health insurance by up to $2500 a year, but it didn’t. Since 2008, the average annual cost of private health insurance has increased more than $1000 and the average annual cost of employer provided health insurance has risen $4800.
On top of that, since 2008, average health insurance deductibles have almost doubled. But politicians promised us that the Affordable Care Act would provide health insurance access for everyone. Perhaps higher health insurance costs are simply the price we have to pay for universal access. But here too, the reality doesn’t match the promise.
In 2015, more than 32 million people are still uninsured. And an additional 6.5 million are only insured because Congress expanded existing Medicaid programs, not because of the ACA’s healthcare exchanges. So why hasn’t the Affordable Care Act worked as promised? Before the ACA, we only had to pay for health insurance.
Under the ACA we have to pay for health insurance plus a new government bureaucracy to manage the health insurance industry. Proponents argued that government regulation was necessary to restore competition. But the Federal Government is a monopoly that faces even less competition than did private insurers. In short, the Affordable Care Act took an expensive and low competition industry and put it under the control of a more expensive and even less competitive government.
It should surprise no one that the results are the opposite of what we were promised. So how did we get here? Long before the Affordable Care Act, state governments erected barriers to protect in state insurers. This reduced competition that would have reined in insurance prices. Legislators and lobbyists fought to require that all insurance plans cover specific treatments and favored procedures.
Each of these requirements drove up the cost of providing insurance. Rather than correcting these anti-competitive regulations, the Affordable Care Act expanded them on a national scale. The ACA took decision making out of the hands of doctors, patients, and insurers, and put it into the hands of politicians and bureaucrats.
The problem is politicians and bureaucrats have neither the information nor the incentive to make prudent decisions for others.