Health Reform at 15: The Hidden Cost From Reducing the Number of Uninsured

Fifteen years after the passage of the Affordable Care Act (ACA), the results are in and so are the consequences. While health reform succeeded in reducing the number of uninsured Americans, it failed to address the cost of employer-sponsored health coverage. For the more than one hundred sixty million Americans who get their health coverage through work, that omission has come with steep price tag.

The Unspoken Tradeoff

From the start, health reform was built on a politically sensitive foundation. The public was told it would cut costs. That premiums would fall. That if you liked your plan, you could keep it. That if you liked your doctors, you could keep them.

Actually, the ACA was NEVER about reducing costs for employer-sponsored health plans. Its true focus was expanding coverage, primarily through taxpayer-paid Medicaid expansion and taxpayer-subsidized enrollment for coverage through the public exchanges. What wasn’t disclosed to the public is now impossible to ignore:

Healthy individuals would pay more to subsidize care for the sick.
Workers with employer coverage would help underwrite $0 Medicaid premiums and exchange premiums of less than $10/month for others.
The system would shift massive costs on to plan sponsors and participants to support these subsidies.

As Jonathan Gruber, one of the ACA’s architects, bluntly stated: “Lack of transparency is a huge political advantage… call it the stupidity of the American voter.”

Taxpayers in employer-sponsored health plans got the bill.

The Employer Impact: Compliance Over Strategy

In the early years, most employers were focused on compliance, not strategy. They worked to maintain grandfathered status, update plan designs and follow a tidal wave of new regulations. But the cost trend never relented.

According to recent surveys:

Aon projects a 9% increase in the average cost of employer-sponsored coverage in 2025.
PwC forecasts an 8% medical cost growth, the highest in over a decade.
WTW warns that health inflation is dangerously outpacing wage growth, with employer costs projected to rise 7.7% next year.

Meanwhile, enrollment in Medicaid and public exchange plans now exceeds44 million Americans. The public exchange plans are starting to resemble “Medicaid Lite” with narrow networks, limited access, high deductibles and minimal provider accountability.

What Health Reform Didn’t Fix

No real cost controls: Deductibles, copays and premiums continue to climb.
No meaningful competition: ACA allows for up to 15% annual rate increases before subjecting the coverage to a “rate review” – 15% means the cost doubles in about four years. https://www.healthcare.gov/health-care-law-protections/rate-review/ And since 100% of Medicaid enrollees and 92% of public exchange enrollees receive taxpayer subsidies, the majority of the burden from rate increases is born by … taxpayers. The subsidies are more prevalent and more extensive – insulating those with taxpayer subsidized coverage. In fact, more individuals with exchange coverage receive a taxpayer subsidy in 2024 than in prior years and the taxpayer subsidies have increased such that they have reduced covered individuals monthly premium every year since 2021!

Source: Health Insurance Marketplaces 2024 Open Enrollment Report, Table 7, Average Monthly premium before and after Advance Payments of the Premium Tax Credit (APTC), Accessed 6/4/25 at: chrome-https://www.cms.gov/files/document/health-insurance-exchanges-2024-open-enrollment-report-final.pdf

No transparency: Price comparison tools are rarely used and providers often ignore pricing rules.
No system sustainability: The law created long-term structural imbalances, not solutions.
Increased cost shifting: The ACA, and more recently, the Inflation Reduction Act, expand government-sponsored coverage where 67.3 million Americans are enrolled in Medicare, and 78.4 million are enrolled in Medicaid. Because Medicare reimbursement rates average only 87% of the cost of services (82% for hospitals), https://www.aha.org/2024-01-10-infographic-medicare-significantly-underpays-hospitals-cost-patient-care and because Medicaid reimbursements average only 72% of what Medicare pays, the failure to reimburse providers the cost of providing services to 146 million Americans prompts those same providers to raise the costs charged to those covered in employer-sponsored plans … for the same services, by the same provider, at the same location, on the same date. The most recent Rand study shows employer-sponsored plans pay costs that are 254% of what Medicare allows. https://employerptp.org/studies/pt5/

The ineffective federal Rate Review process doesn’t apply to most employer-sponsored plans.

What It Did Create

A patchwork of mandates, penalties and bureaucracy: Over 100 new boards, pilots, funds and agencies were created under the ACA.
Billions in hidden subsidies.
A national dependence on taxpayer-funded coverage, with little regard for those who subsidize it.

aequum’s Role: Protecting Plans from Structural Failures

aequum recognizes the extent to which health reform has transferred greater financial responsibility to employers who sponsor a health plan and participants in those plans. In response, aequum is committed to safeguarding self-insured plans from unreasonable medical charges and non-transparent billing practices.

aequum’s services help level the playing field:

Disputing Inflated Charges: We review, challenge and reduce unreasonable provider bills.
Legal Support: Our attorneys represent plans and participants in billing and claims disputes.
Data-Driven Insights: We help sponsors understand cost drivers, billing patterns and risk exposure.
Advocacy for Fairness: We hold providers accountable and enforce compliance with transparency mandates.

Fifteen Years Later: Still Paying the Price

The ACA expanded coverage but it did so by quietly – increasing our annual deficits, increasing our national debt, shifting the financial burden and hiding it from taxpayers – today AND tomorrow. Today, that means costs continue to increase for workers, paychecks reflect increased taxes, provider financial losses from treating Medicare and Medicaid beneficiaries are shifted to employer-sponsored plans, weakening plan sustainability – creating a healthcare system more opaque than ever.

It’s time to move from passive compliance to active protection.

Contact aequum today to learn how we can help your organization defend against excessive charges and ensure your health plan remains financially sustainable, no matter what Washington does next.