GOP candidates' criticisms of ACA premiums leave out key pieces of health care puzzle

Republicans vying for the 2024 presidential nomination have started taking aim at an old adversary: the Affordable Care Act, the nearly 14-year-old health legislation former President Barack Obama signed into law.

Former President Donald Trump, who failed to fulfill his first-term promise to repeal Obamacare, threatened in November to reopen that contentious fight, calling for its replacement.

Entrepreneur Vivek Ramaswamy said during the Dec. 6 Republican primary debate that the nation needs "diverse insurance options in a competitive marketplace."

And presidential candidate Florida Gov. Ron DeSantis made his own pledge, telling host Kristen Welker on Dec. 3 on NBC’s "Meet the Press" that he would pass a bill to "supersede" the law.

DeSantis promised a plan sometime next spring, and claimed that, "Obamacare promised lower premiums. It didn't deliver that."

ACA premiums are high, but DeSantis left out several pieces of a very complicated puzzle — notably that subsidies help drive down the cost of the program’s health insurance for most people. 

Obamacare wasn’t intended to lower premiums for everyone, health policy experts said, but aimed to make health coverage more affordable for more people while ending discriminatory practices by insurers. Its primary objective was providing access to more affordable, comprehensive health insurance for Americans who lacked access to employer-based group insurance.

"Before the ACA, if you were buying health insurance on your own and had a pre-existing health condition, or were older, or were a woman, based on various health risk characteristics, (insurance companies) would charge you more," said Sabrina Corlette, a researcher and co-director of the Center on Health Insurance Reforms at Georgetown University. "The ACA banned that."

Obama signed the Affordable Care Act into law in March 2010. It took full effect in January 2014. A record 16.3 million people sought individual health insurance plans through the ACA in 2023.

Before the law, insurance companies could refuse coverage or charge people higher prices if they had pre-existing health conditions. The ACA outlawed that practice and required insurers to charge people the same premiums, regardless of health status. 

"The individual market in most states barely existed before Obamacare," said Robert Field, a professor of health management and policy at Drexel University’s Dornsife School of Public Health. "Insurance companies didn't want to provide it."

Sick people could be refused coverage, he said. And very sick patients could find themselves quickly exhausting insurers’ low coverage caps. 

The law also mandated that health plans cover what it termed "essential health benefits" such as prescription drugs, maternity and newborn care, mental health and substance abuse services and pediatric care.

The ACA allowed states to expand rules for who could be eligible for Medicaid, the government’s health insurance program for low-income households. The law also gave states more federal money to insure that larger pool of Medicaid recipients. As of November, 40 states and the District of Columbia had all expanded Medicaid coverage to include nearly all adults making incomes up to 138% of the federal poverty level — $20,128 for an individual in 2023. Neither Florida nor South Carolina, Republican presidential candidate Nikki Haley’s home state, are among them.

The ACA also gave enhanced premium tax credits — subsidies to offset some or all of people’s monthly premiums — to people with incomes 100% to 400% of the federal poverty line. During the COVID-19 pandemic, President Joe Biden’s administration increased the credits and opened them to more taxpayers. Biden’s Inflation Reduction Act later extended them through 2025. 

Monthly premiums have risen since the Affordable Care Act was implemented, just as they have risen under employers' policies. Experts said the increases represent a general trend and are not unique to the health care law.

Before premium tax credits are factored in, the average 2024 silver ACA policy (the most common plan) costs around $477 per month for a 40-year-old individual and $954 for a couple aged 40. 

But more than 14 million Americans (out of about 18 million) with ACA plans receive credits based on their incomes, saving an average of $527 per month, according to KFF, a health policy research organization. People with lower incomes qualify for higher tax credits, and there are ACA plans available that cost patients nothing after the credits are applied. 

With more than 3 million people enrolled, Florida leads the nation in the number of people who  get their health insurance from the ACA marketplace. Ninety-seven percent of them get tax credits to lower their monthly premiums. 

Some ACA health plans are lowering premiums for 2024 but many are increasing them, often by 2% to 10%, according to a Peterson-KFF Health System Tracker, with a 6% median increase. The increase follows years of decreases from 2019 through 2021, although 2022 had a slight increase.

Premiums on employer-based plans — where most Americans get their insurance — also haven’t declined. KFF’s Employer Health Benefits Survey for 2023 shows the average annual premium for these plans increased 7% in 2023. 

Health policy experts told us that although premiums are high, they were high before the ACA existed, and have continued a long-standing trend of health care costs rising faster than inflation.

"The ACA didn’t stop that general trend but it’s not true to say categorically that the ACA is causing health care costs to go up" Corlette said. "There's all sorts of systemic reasons that play into that." 

Both Corlette and Sara Rosenbaum, professor emerita of health law and policy at George Washington University’s Milken Institute School of Public Health, said the ACA didn’t aim to lower premiums or regulate prices.

"It's definitely the case that the premiums are not lower," Rosenbaum said. "But that is not, in fact, what the architects of the ACA promised at all."

Premiums are generally driven by the prices that drugmakers and companies charge for their services and how frequently people use certain health services, such as going to the hospital.

Whether and when premiums rise or fall also varies by region and insurer.

Besides premiums, Americans also pay out of pocket for deductibles and copayments — all of which have also risen since 2010. And some of these costs are even more cost prohibitive.

The Commonwealth Fund, a health care research organization, found in a 2023 survey that Americans overall, regardless of insurance type, report that their health care coverage does not adequately cover what they need, leading them to delay or forgo care, incur significant medical debt and experience worsening health.

Many insured adults said they or family members had delayed or skipped needed health care or prescription drugs because they couldn’t afford it. 

"We should not minimize the fact that health care coverage is hugely expensive and less and less affordable for the average American family," Corlette said. "That is less about the ACA and more about the broader system, issues in hospital expenses and drug costs. I think the next step is how do we get our health care costs under control, which was not the core purpose of the ACA."

What Republicans such as Trump or DeSantis might try to do with the ACA remains to be seen. A repeal of the law could have far-reaching effects.

"About 55 million Americans would suddenly be uninsured and insurance companies would once again be allowed to deny health insurance, or charge substantially higher premiums, to anyone with a pre-existing condition," said Gerald Kominski, professor emeritus of health policy and management and senior fellow at the UCLA Center for Health Policy Research. "This may be the world ideologues want us to live in, but it would be a public health disaster."

The ACA includes protections for Americans who have health insurance through their jobs, too, including: allowing adult children to stay on their parents’ health plans until age 26; requiring equitably priced coverage for people with pre-existing health conditions; providing for preventive care with no out-of-pocket cost; and banning annual and lifetime insurance coverage limits. 

All of that, experts said, could be at stake if the law were repealed.