Research & Commentary: Continuing Affordable Care Act Problems

Published July 9, 2015

The Affordable Care Act (ACA) passed a significant legal hurdle with the U.S. Supreme Court’s (SCOTUS) June 2015 decision to allow subsidies for those enrolled in the federal exchange. Despite this victory, the ACA remains unpopular. According to the Real Clear Politics average of polls, 7.8 percent more people oppose the law than support it. Although the main stated goal of the ACA was to increase the number of people receiving coverage, the Galen Institute points out 59 percent of Americans prioritize reducing costs, which ACA has yet to achieve. 

Despite SCOTUS’ decision, the law will face several major challenges over the next few years. According to Heartland Institute Senior Fellow Benjamin Domenech, “King v. Burwell targeted subsidies going to a relatively small portion of Obamacare’s beneficiaries (6.5 million subsidized people, many of whom lost coverage they would’ve preferred to keep). The Medicaid portion is really the one aspect of Obamacare that’s working in terms of signing people up, and a King ruling in the other direction would’ve done nothing about that. Those subsidies aren’t working sufficiently—they are not insulating the people on Obamacare from increased costs, including deductibles, copays, etc.—and with the latest round of cost increases people are going to have more reason to feel like Obamacare isn’t working for them.” 

To date, 21 states have chosen not to expand Medicaid, a highly flawed program. Medicaid expansion is expensive, creating new costs the federal government may not always cover and leaving state taxpayers on the hook for new liabilities. According to the National Association of State Budget Officers, Medicaid consumes 23.6 percent of state government expenditures. 

After two years of marketing, approximately 18 million Americans eligible to buy insurance in federal or state marketplaces have chosen not to purchase exchange plans. Kaiser Health News noted many state marketplaces have been unable to become self-sustaining and have had difficulty recruiting Hispanics and young adults. Kaiser found several states, including Colorado, Hawaii, Rhode Island, and Vermont, are already looking for more money. 

According to preliminary information from the White House, dozens of health insurance providers under Obamacare have already requested premium increases for 2016. According to Fox News, large insurers such as Blue Cross and Blue Shield of North Carolina and Highmark Health Insurance Co. of Pennsylvania are asking for premium hikes of 26 and 30 percent, respectively. 

ACA’s architects argued ensuring everyone had health insurance would encourage patients to take advantage of preventative care and use their own doctors instead of emergency rooms. The reality has been the opposite: The number of emergency room visits by low-income patients has increased since Obamacare went into effect. A study by the Colorado Hospital Association found ER visits in states expanding Medicaid under the ACA increased by 5.6 percent in 2013–14, much more than the 1.8 percent increase reported by non-expansion states. 

Physician reimbursement also continues to pose a major problem, which has led to a physician shortage of approximately 63,000, with even more considering retirement. Based on a series of interviews with physicians, Roni Caryn Rabin reported in a Kaiser Health News article government reimbursements to doctors through the state and federal exchanges are far lower than for private commercial plans: “[Whereas] Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, some exchange plans are offering $60 to $70.” 

The Supreme Court’s decision may have saved the ACA subsidies for now, but the ACA still has many problems demanding dramatic reforms or full repeal. Enrollment remains relatively low, costs are increasing, and few patients with coverage are using preventative care as expected. States that have not expanded Medicaid should stand fast because expansion does not improve health care outcomes and there is no guarantee federal funding will continue indefinitely.   

The following documents provide additional information about the ACA and health care reform.  

King, et al. v. Burwell, Secretary of Health and Human Services, et al.
The U.S. Supreme Court’s majority decision in the case of King v. Burwell, delivered on June 26, 2015, appears at the link above. The court found subsidies under the Affordable Care Act could be delivered for health insurance purchased through exchanges established by the federal government, despite language in the law restricting such subsidies to insurance purchased through exchanges established by state governments. 

Reforming Obamacare: How Congress, and the President, Can Win after King v. Burwell
John R. Graham of the National Center for Policy Analysis says a congressional response to King v. Burwell will be successful if Congress takes reasonable steps to reform Obamacare’s mandates and tax subsidies. Graham’s proposal includes reforms to decrease costs and enable Obamacare recipients to increase their work hours. 

Research & Commentary: Reimbursement Flaws in Medicaid and the ACA
Fewer doctors are accepting new Medicaid patients today, in part due to low reimbursement rates and a large increase in Medicaid enrollment caused by states expanding Medicaid in response to the Affordable Care Act (ACA) promise of additional federal funds. Matthew Glans of The Heartland Institute examines the ACA’s flawed reimbursement system and warns of the likely consequences once the temporary fixes expire. 

Research & Commentary: Is the Affordable Care Act Helping Emergency Rooms?
One of the many goals of the Affordable Care Act was to lessen the burden of uninsured patients on the nation’s emergency rooms. The law, however, attacks the wrong problem and accomplishes the opposite by pushing states to expand their failed Medicaid systems to cover more people. Heartland Institute Senior Policy Analyst Matthew Glans argues repealing ACA and Medicaid expansion would decrease the pressure on the nation’s emergency rooms. 

Ten Principles of Health Care Policy
This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems. 

The New Health Law: Bad for Doctors, Awful for Patients
Jason Fodeman of the Galen Institute documents underpayments and perverse incentives in Medicare’s physician reimbursement regimen. Instead of reforming the government’s flawed reimbursement system, the ACA merely expands it to more people, Fodeman notes.   

The Obamacare Evaluation Project: Access to Care and the Physician Shortage
Analyzing changes in access to primary care physicians under the Affordable Care Act, Paul Howard and Yevgeniy Feyman of the Manhattan Institute find population growth, demographic changes, and an expansion of insurance spurred by Obamacare will contribute to a significant shortage in primary care physicians over the coming decade. 

Obamacare’s Impact on Doctors—An Update
In this Heritage Foundation Issue Brief, Alyene Senger outlines several effects of Obamacare on doctors: “Specifically, physicians will be subject to more government regulation and oversight, and will be increasingly dependent on unreliable government reimbursement for medical services. Doctors, already under tremendous pressure, will only see their jobs become more difficult.” 

Studies Show: Medicaid Patients Have Worse Access and Outcomes than the Privately Insured
In this Heritage Foundation Backgrounder, Kevin Dayaratna states it is becoming increasingly difficult for Medicaid patients to find access to primary and specialty care physicians. When Medicaid patients are admitted to hospitals, they are often admitted with more serious conditions than those with private insurance. By expanding this broken program, Obamacare will only exacerbate the situation. Policymakers should reform Medicaid to allow recipients access to private insurance in a consumer-driven market, Dayaratna writes. 

Impact of Medicaid Expansion on Hospitals: Updated for Second Quarter 2014
The Colorado Hospital Association found emergency room visits increased three times as rapidly in states that expanded Medicaid under Obamacare than in those that did not.   

Doctors Say ER Visits Continue to Climb, Despite Obamacare Promises 
Writing for Somewhat Reasonable, Gene Koprowski discusses a poll of physicians indicating emergency room visits by indigent patients are rising in the United States five years after Obamacare legislation was passed partially on the promise to reduce those numbers.    


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s website at, and PolicyBot, Heartland’s free online research database at 

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