Affordable Care Act - How Bad Is It?
Segment #655
ACA Insurance Profitability Debate
When you look at the brief history of ACA, it is pretty easy to see that it was a disaster in the beginning and has only gotten worse. Designed to create access to healthcare at cheaper prices, it is a colossal failure on every level. The Dems are screaming loud now in their efforts to continue the shutdown to preserve this program in order to cover their mistakes.
Question: Did the insurance companies profit excessively under govt subsidized ACA
The question of whether insurance companies have "profited excessively" under government-subsidized Affordable Care Act (ACA) plans is a subject of ongoing debate, but available data points to significant increases in profitability for the health insurance industry since the ACA's implementation.
💰 Increased Profitability and Stock Performance
Stock Market Outperformance: Since the major provisions of the ACA took effect in 2014, the stock prices of health insurance companies have significantly outperformed the S&P 500. Some reports indicate a doubling of health insurer stock prices compared to the S&P 500's impressive gain in the same period.
Total Profits: The largest U.S. health insurers have reportedly seen substantial increases in their annual net income since the ACA's passage in 2010.
Revenue Growth: The law, particularly the Medicaid expansion and subsidies, has led to a major increase in the number of insured Americans, resulting in billions of dollars in new revenue for insurers.
📈 Role of Subsidies
Covering Higher Premiums: After initial market turbulence (where some insurers faced losses), many insurers adjusted to the ACA's regulations and risk pool by setting higher premiums. The government premium subsidies, which cover a large portion of these costs for enrollees, have been a key factor in improving the profitability of the individual insurance market.
Medicaid Expansion: A significant portion of the increased profitability for large insurers comes from the ACA's Medicaid expansion, which is largely provided through private managed care organizations and heavily funded by the federal government.
Enhanced Subsidies: The "enhanced" subsidies introduced during the COVID-19 pandemic have been cited as particularly costly to the government and a primary factor in padding insurance company profits. These enhanced subsidies reduced out-of-pocket costs for a wider range of enrollees, driving up enrollment and the flow of taxpayer dollars to insurers.
🛡️ ACA Mechanisms and Debate
Medical Loss Ratio (MLR): The ACA requires insurers to spend a minimum percentage of premium revenue on medical claims and quality improvement (80% or 85%, depending on the market), which limits how much they can retain as profit and administrative costs. This rule is intended to protect consumers from excessive insurer profits.
Premium Increases: Insurers often raise premiums to cover increasing healthcare costs (like expensive new drugs or hospital services). The subsidies often increase alongside the premiums, meaning the government (taxpayers) covers the majority of the increase, insulating subsidized enrollees from the full price hike. This dynamic has fueled the argument that government subsidies allow insurers to charge more.
In conclusion, while the ACA's subsidies and market rules have expanded coverage for millions, the resultant financial flow from the government and consumers has been a major contributor to the health insurance industry's financial growth and record profits.
Would you like to know more about the Medical Loss Ratio (MLR) rule and how it is intended to limit insurance company profits?
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Question: Are the Dems trying to make temporary Covid ACA benefits permanent in the shutdown. Crazy considering in 2024 the US was paying over 80% of the premiums with recipients not doing to establish their needy status
Yes, Democrats are actively pushing to make the enhanced Affordable Care Act (ACA) premium subsidies—originally temporary measures from the COVID-19 era—permanent as a key demand in the ongoing government shutdown negotiations. The shutdown began on October 1, 2025, after Congress failed to pass funding legislation, and talks have stalled partly over this issue, with Democrats tying the subsidies to broader spending bills. These subsidies, expanded under the 2021 American Rescue Plan and extended through 2025 by the Inflation Reduction Act, cap enrollees' out-of-pocket premiums at 8.5% of household income (or less for lower earners) and eliminate the previous "subsidy cliff" for those above 400% of the federal poverty level. Without extension, premiums for subsidized marketplace enrollees would more than double on average starting in 2026, potentially causing millions to lose coverage.
Your point about the high government share of premiums in 2024 is accurate: The average annual benchmark premium was about $5,724, but after subsidies, enrollees paid just $888 out-of-pocket on average—meaning the federal government covered roughly 85% of costs for the 21 million subsidized marketplace enrollees that year. This generosity stemmed from the enhanced subsidies, which applied regardless of income above certain thresholds. On eligibility verification, the COVID-era continuous enrollment policy (which paused routine Medicaid redeterminations until mid-2023) did allow many to stay covered without frequent income checks, contributing to enrollment surges and some overpayments to ineligible households. For ACA marketplace plans, however, subsidies are still reconciled annually based on actual tax-year income reported to the IRS, though critics argue the expansions reduced incentives for income verification during the pandemic unwind. Republicans have resisted permanence, citing costs (estimated at $335 billion over a decade for extension) and preferring targeted reforms, while Democrats frame it as essential to prevent a "health care cliff" amid the shutdown. As of now, with the shutdown in its fourth week, no deal has been reached, but bipartisan talks continue.