While President-Elect Trump's stance on tariffs and immigration remain unambiguous, Trump's viewpoint on the Affordable Care Act (ACA), colloquially known as Obamacare, is more tenuous. In November 2023, Trump wrote on his social platform Truth Social that "we should not give up" on repealing Obamacare. In the 2023 presidential debate last September, he said that he has concepts of an idea to replace Obamacare, but "until then, I'd run it as good as it can be run." This is in contrast to his first term where he tried to repeal it but failed. Repealing Obamacare did not even make its way into the official 2024 Republican platform.
Given that healthcare accounted for 17.3 percent of the U.S. GDP, I think Obamacare is absolutely something worth considering. As this October 2024 report from the Paragon Health Institute illustrates, at least a dozen significant Obamacare-related promises were broken. Here are a few broken promises to make the point more salient:
The ACA would create savings of $2,500 per family. This ended up being such a large faux pas of Obama's that FactCheck.org called this promise one of "Obama's Whoppers." It turns out that average premiums increased from $232 in 2013 to $476 in 2017, according to HHS' Office of the Assistance Secretary for Planning and Evaluation (ASPE). This ASPE finding is similar to that of a March 2021 Heritage Foundation report that found that the average premium increased by 129 percent from 2013 to 2019.
It should not be a surprise that a demand-side subsidy would drive up healthcare costs: it's Econ 101. Obamacare made healthcare costly when it first started. Even now, about half of Americans have difficulty paying for healthcare (KFF). Not exactly what I would call affordable.
The ACA would save lives. Obama promised that it would reduce injuries in addition to saving lives. Democrats touting ACA were citing a Harvard study (Wilper et al., 2009) saying that 45,000 excess deaths were caused by lack of insurance. Given that there were 2.6 million annual deaths at the time, a reduction of 45,000 excess deaths would have resulted in an increased average lifespan of 0.4 years.
The life expectancy decreased by 0.3 years from 2014 to 2017, which is a net difference of 0.7 years of what it would have been had the Harvard study been accurate. Average life expectancy increased slightly in 2019, only to drop again due to the pandemic. Average life expectancy went from 78.3 years to 77.4 years in 2023 (World Bank). This promise became so obviously and patently false I wrote a separate piece on this myth in July 2017. And if that were not enough, life expectancy worsened for the states that adopted the ACA Medicaid expansion versus those that did not (Blase and Balat, 2020).
The ACA would increase economic growth. Obama's chairman of the Council of Economic Advisors, Jason Furman, promised that the ACA would create "healthier, more productive workers," "reduced 'job lock'", and "better macroeconomic performance." A research paper from the Journal of Human Resources found that the ACA "increased low-hours, involuntary part-time employment by 500,000-700,000 workers in retail, accommodations, and food services (Dillinder et al., 2020). The authors contributed this trend to the ACA's penalty to large employers who did not want to provide insurance being incentivized to reduce employment and shift full-time workers to part-time workers. The Congressional Budget Office recognized this disincentive in its 2014 report.
The employer mandate would collect a ton of revenue for the government. The Congressional Budget Office and Internal Revenue Service was predicting all this revenue. The White House's Council of Economic Advisors concluded that 11 years after the ACA passed, only 1 percent of what was projected was actually collected.
If you like your plan, you can keep it. This was a promise made by Obama in 2009 since he believed that the ACA would not take away anyone's plan. This one ended up being such a bold-faced lie that Politifact called it the Lie of the Year in 2013 since at least 7 million consumers saw their plans disappear.
The ACA would decrease emergency room use. Obama's logic on this promise was that taxpayers were subsidizing the uninsured because a lack of insurance was incentivizing them to seek healthcare only when the situation became dire enough to use an emergency room.
I will look at this from the angle of Medicaid expansion since the ACA expanded Medicaid enrollment by 16 million more than the Congressional Budget Office initially calculated (Butler, 2016). The Brookings Institution concluded that the ACA's Medicaid expansion increased emergency room visits by 20 percent, primarily due to emergency room visits that could have been treated outside the emergency department (Garthwaite et al., 2020). Scholars from the University of Iowa similarly found that Medicaid expansion in California as a result of ACA increased emergency room use and cost (Ellis and Esson, 2018).
Postscript. Not much good has changed about the ACA since I wrote my scathing piece in 2017 on 15 reasons why we should dislike Obamacare. If anything, repealing the main cost-containing provisions, the Cadillac tax and the health insurance tax, since the creation of the ACA made matters worse. The false promises of Obamacare resulted in higher healthcare costs, increased deficit spending, and significant disruptions to insurance coverage and healthcare access.
The ACA did little, if anything, to improve healthcare in this country, as is illustrated by this September 2024 report from the Paragon Health Institute on how the ACA reduced healthcare quality. Meanwhile, the ACA guaranteed that health insurance companies are guaranteed profits. We do need something to reform healthcare in the United States. Building an extra room on an already rickety house does not help anyone. It simply means reforming healthcare becomes that much more difficult when policy decision-makers reach that painful fork in the road, much like they eventually will with Social Security. Whether the Trump 47 administration is up for the task remains to be seen. But if the first Trump term is indicative of anything, we are likely to see more of a preservation of the status quo than we are reforms of any significance.
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