In the early years though, it wasn’t clear that the insurance market created under the law was going to work. Healthcare.gov, the federal online marketplace, got off to a shaky start, with technical issues keeping people from enrolling in plans. Insurers also had difficulty pricing their plans. After decades of carefully selecting whom they insured, insurers were forced to operate under the new requirement to offer anyone a policy, even if that person had a potentially expensive medical condition, without charging a much higher price.
Many insurers suffered heavy losses at first. Some of the biggest players in health insurance abandoned the market. UnitedHealth Group, one of the nation’s largest insurers, bowed out in 2016, citing losses of $1 billion. Lawmakers worried about so-called bare counties, places where insurers would simply refuse to offer coverage because there weren’t enough customers or prices were too high to stay in business.
But while the learning curve was steep, insurers discovered how to prosper. They raised premiums enough to make money and narrowed their networks of hospitals and doctors to reduce their costs. Insurers also latched on to the government’s Medicaid program, which is run by private insurers in most states.
“The individual market remains profitable and stable,” concluded a recent analysis by the Kaiser Family Foundation, which tracked the financial performance of the insurers. Companies, which were once spending nearly every cent of each dollar they collected in premiums on medical claims, were now taking in enough money to have 25 cents left over in the most recent period of 2019.
Here’s its biggest flaw.
When the Affordable Care Act’s architects think about what they wish they had done differently, they often focus on one issue: the deductibles.
Most health insurance plans have deductibles, an amount that patients need to pay before coverage kicks in. The Affordable Care Act, however, allowed insurers to set deductibles significantly higher than those typically faced by Americans who get health insurance at work.
Individual deductibles can go as high as $8,150. For families, the limit rises to $16,300.
The White House and Congress wrote those amounts into the law when they drafted it in order to keep the law’s overall price tag down. Looking back, they question that decision.