‘What I predicted 15 years ago has come to roost’: The ACA math was wrong

When the Affordable Care Act (ACA) was passed in 2010, it was sold on the promise of two goals: expanding coverage and making health care more affordable. Sixteen years later, only half of that promise materialized. Coverage did expand. But affordability never arrived. What is happening today is not a surprise, nor is it a mystery. It is the exact scenario I warned about beginning in 2009, when I argued — repeatedly, and often to skepticism — that the math behind the ACA’s subsidy structure, risk assumptions, and pricing incentives simply did not add up.

I said then that expanding coverage was admirable, but the financing framework was unsustainable. In my 2009 Fox News commentary “The Truth About Obama’s Health Care Plan,” I explained that the subsidies were built on unrealistic projections of how they would be funded. The risk profile of new enrollees was misaligned with the actuarial forecasts used to justify the law. And the system gave insurance companies expanded control over the financial float — the investment income generated from premium dollars held long before claims are paid — ensuring that insurers, not consumers, would ultimately benefit from the ACA’s design.

Everything I warned about has unfolded exactly as predicted.

The ACA did expand insurance coverage with about 21 million Americans enrolled in marketplace plans and many millions more gaining Medicaid coverage. Yet roughly 25 million remain uninsured, and total national health spending has soared to nearly $4.9 trillion in 2023, approaching one-fifth of GDP. Coverage without cost control is not progress. It’s a transfer of expense — from families to employers, from employers to government, and from government to taxpayers.

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The heart of the problem was visible from the beginning. Premium tax credits were tied to income, but depended on the price of premiums themselves. If premiums rise — and they have, relentlessly — federal subsidy spending rises with them. That is a mathematical certainty, not a political talking point. The ACA also assumed that large numbers of healthy, younger consumers would balance the cost of covering older, sicker individuals. That never happened. As I noted in my 2013 Fox column “How ObamaCare Is Dividing the U.S.,” the expected influx of low-cost enrollees never emerged, leaving marketplaces dominated by individuals with higher utilization and more chronic conditions. The feedback loop of rising premiums, insurer exits, and narrower networks was predictable to anyone looking honestly at the numbers.

This problem was exacerbated by the behavior of employers. Roughly two-thirds of Americans with private coverage are in self-funded employer plans. These employers, in theory, could have been the counterweight to runaway pricing. Instead, most outsourced their purchasing power to the same insurers, third-party administrators, and pharmacy benefit managers whose profits are driven by the volume of premiums and the surplus generated by float. As I wrote in “Transparency Issues Under ObamaCare,” employers would never bend the cost curve unless they demanded genuine transparency and exercised real control over spending. Sixteen years later, most still have not.

The result is a system where insurers command more power than ever. According to the National Association of Insurance Commissioners, insurers reported nearly $25 billion in net income in 2023, followed by about $9 billion in 2024 despite inflationary pressures on medical costs. Their financial model — built on premium reserves, investment income, and consolidated control of networks — has grown stronger under the ACA, not weaker. Meanwhile, employer-sponsored plans are facing increases exceeding 5 percent in 2025 and projected to surpass 6.5 percent in 2026. Some employers face hikes approaching 9 percent if they do not aggressively intervene. The average cost to insure a single worker now exceeds $16,500 a year.

The affordability crisis has once again triggered a familiar policy pendulum swing. In the 1990s, managed care was heralded as the answer — until rising resentment and hidden costs sparked its collapse. Under the ACA, the early years brought optimism and expanded access, but the underlying flaws revealed themselves only after the architecture was fully tested at scale. The pendulum is now swinging again toward new structural reforms.

As reported in The Washington Post, lawmakers are now proposing to send ACA subsidies directly to consumers through personal health accounts rather than funneling them to insurers. This idea represents a radical departure from the ACA’s original structure — and it mirrors the solution I proposed more than fifteen years ago: empower individuals, not intermediaries, to control healthcare dollars. The Post notes, however, that without safeguards, insurers may respond by cherry-picking healthier individuals out of the risk pool, leaving those with chronic illnesses facing skyrocketing premiums. This is precisely the danger I warned about from the beginning. Shifting money without restructuring incentives simply reshuffles costs without solving them.

Recent commentary from Newt Gingrich echoes the same theme. His argument that affordability requires shifting financial control from insurers to individuals aligns with the central thesis I articulated in 2009: real reform only works when consumers control the dollars and have transparent information about what they are buying. Although Gingrich’s piece addressed broader affordability across American life, his emphasis on consumer financial empowerment reflects the very principle that the ACA failed to incorporate.

The convergence of these ideas — consumer-directed subsidies, transparency mandates, employer empowerment, and restrictions on insurer gaming — marks the precise moment I predicted. The structural cracks that were mathematically unavoidable in 2010 are now national priorities in 2025. Policymakers are finally confronting what the numbers have been saying for sixteen years: healthcare cannot be made affordable until the pricing system itself is restructured.

But none of the emerging proposals will work unless we confront the central economic flaw of the ACA: the system still allows insurers to dominate pricing, control the float, and manipulate risk pools. Redirecting subsidies to consumers is not sufficient unless paired with mandatory transparency, strict prohibitions on cherry-picking, and real incentives for employers to take back control of purchasing. Without these elements, we will repeat the cyclical failures of managed care and the ACA — and the next collapse will be even more expensive.

We have reached a moment of reckoning. The ACA accomplished something valuable in expanding coverage, but it failed to create affordability because it ignored the fundamental arithmetic of rising costs. Healthcare was never a political problem. It has always been a math problem.

Fifteen years ago, I said this moment would come. Now it is here. The question is whether policymakers will finally address the underlying economics or continue shifting costs around while pretending the structure is sound.