Obamacare Has Been Even More Successful Than Expected

Dean Baker is an economist and the co-director of the Center for Economic and Policy Research.

Updated September 22, 2015, 9:15 AM

The Affordable Care Act was not anyone’s idea of a perfect health care reform program, but it did lead to the largest extension of health care coverage of any measure since the creation of Medicare almost 50 years earlier. Five years after its passage and a year and a half after the exchanges became operational, it has succeeded far better than anyone could have reasonably expected.

Its been the largest extension of health care coverage since Medicare. Cost growth has slowed and workers have more freedom.

At the most basic level it has been considerably more successful than expected in reducing the uninsured population, in spite of the fact that most states controlled by Republicans have refused to expand Medicaid. The uninsured population fell from 20.3 percent in the third quarter of 2013 to 13.2 percent in the first quarter of this year. The declines in the uninsured population were sharpest among minorities, with the uninsured rate dropping by 9.2 percentage points among African-Americans and 12.3 percentage points among Latinos.

While coverage was being extended health care cost growth slowed sharply. After consistently outpacing gross domestic product growth by 2 to 3 percentage points annually, health care costs have risen only slightly more rapidly than G.D.P.. The difference between the previous growth path and the more recent path comes to more than $2,000 in 2015 for a family of four. The A.C.A. is clearly not the only factor behind the slowdown in cost growth, but it almost certainly contributed to it.

One very underappreciated aspect of the A.C.A. is that it removed the link between employment and insurance, allowing people to change or leave jobs and still maintain insurance for themselves and their families. The number of people involuntarily working part-time is down by almost 16 percent over the last two years, but the number choosing to work part-time is up by almost 6 percent. Young parents account for the bulk of the growth in voluntary part-time employment. The A.C.A. has given millions of young parents the option to spend more time with their children without having to worry about losing insurance.

For all the positives to the A.C.A., there is still a need for many improvements. Many moderate income people still pay too much in copays and deductibles. Insurers are still playing games, with many requesting double-digit price increases for 2016. There are some types of preventive care (e.g. screening for cancer victims) that absolutely should be free. Also, we pay way too much for drugs because of unfettered patent monopolies, a problem that is likely to made worse by the Trans-Pacific Partnership.

But the problems with the A.C.A. won’t be addressed until people start talking about it in a serious way. Its opponents have raised a wide range of unfounded fears. The rest of the country has to be able to look at the A.C.A. with clear eyes in order to make it better.