In the Affordability Alphabet Soup of the ACA and EHBs, a Link to Higher Premiums Isn’t Clear-Cut
When President Donald Trump unveiled his one-page outline to address health care spending, dubbed “The Great Healthcare Plan,” he specifically mentioned the Affordable Care Act’s role in driving up costs.
“I call it the unaffordable care act,” he said. He reprised the line in his 2026 State of the Union address, blaming “the crushing cost of health care” on Obamacare.
Trump’s words play off an ongoing congressional debate that began late last year, ahead of the expiration of the enhanced tax subsidies that had lowered the cost of ACA insurance for millions of Americans.
Democrats, looking toward the November midterm elections, continue to use that lapse to focus public attention on affordability.
Republicans take a different view, routinely pointing to specific provisions as culprits. Among them, the law’s essential health benefits mandate, which says Obamacare plans must cover certain basic services — including emergency care, hospitalization, maternity care, and prescription drugs — without annual or lifetime dollar limits while enrolled.
But my colleague Sarah Boden and I found that connecting EHBs to the premium increases consumers are feeling is not a straight line.
For starters, it’s clear that ACA premiums have increased.
An analysis by the right-leaning Paragon Health Institute shows that the average Obamacare premium for a 50-year-old has grown by 129% since 2014. The average premium for employer-based plans grew 68% during the same period.
Still, that’s not the whole picture.
Pre-ACA, coverage offered by employer plans was generally more generous and, therefore, costlier than coverage under individual market plans. Individual plans were cheaper also because they could bar applicants with health problems. Beginning in 2014, the ACA forced individual policies to look more like employer plans. As a result, premiums rose — sometimes faster than those of job-based plans.
Individual market premiums, however, were on the rise before the ACA took effect.
An analysis by Jonathan Gruber at the Massachusetts Institute of Technology found that premiums grew by at least 10% a year from 2008 to 2010.
So do EHBs raise premiums? In some ways, yes, compared with pre-ACA plans that might not have covered now-required services like maternity care or prescription drugs.
But in other ways, EHBs can save money because they’ve increased access to preventive care, said Gerard Anderson, a professor of health policy and management at Johns Hopkins University’s Bloomberg School of Public Health.
Joseph Antos, a senior fellow emeritus at the conservative American Enterprise Institute, said other parts of the ACA — such as requiring insurers to accept anyone, regardless of health status, and limiting insurers’ ability to charge older people more — also played roles in boosting premiums.
“It’s practically impossible to tease any one thing out,” Antos said.
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