Did the Affordable Care Act Make Health Care More Affordable?
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The Affordable Care Act (ACA) has been criticized for not living up to its name. But has it actually failed on affordability? The answer is complicated — and consequential.
The ACA opened the door to comprehensive coverage for tens of millions who didn’t have that option before. In 2025, Marketplace enrollment hit an all time high of more than 24 million.
The expiration of the ACA’s enhanced premium tax credits at the start of 2026, combined with rising insurer premiums, put a spotlight on health care affordability that extends beyond Marketplace enrollees.
KFF’s Cynthia Cox, Senior Vice President and Director, Program on the ACA and Peterson-KFF Health System Tracker, looks at the ACA’s record and the broader underlying question it raises: what’s a fair price to pay for health care?
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Video Transcript
Narrated by Cynthia Cox Senior Vice President, Program on the ACA Director, Peterson-KFF Health System Tracker, KFF
The Affordable Care Act has been criticized for not living up to its name. But has it actually failed on affordability?
National health spending has been on the rise in recent years, driven by the increasing cost of hospital care, physician and clinical services, and prescription drugs.
But looking back to the decade after the ACA, annual spending grew markedly slower.
Dropping from average increases of 10 to 12 percent a year in the 1970s and 80s to around 4 percent in the 2010s.
It’s hard to prove that the ACA restrained spending, but there’s no evidence it accelerated growth even while helping to bring down the rates of the uninsured by providing coverage for millions more people.
The ACA allowed states to expand Medicaid to cover more low income individuals. It also created new Marketplaces where people without coverage through a job or other sources could buy their own insurance.
Now, the self-employed, small business owners, those between jobs or working without benefits, retirees not yet eligible for Medicare, can buy a comprehensive plan comparable to most employer-sponsored insurance.
The ACA also set new insurance regulations, among the most significant of which was prohibiting insurers from charging more or denying coverage based on a pre-existing health condition.
It also established a list of essential health benefits that insurance must offer without lifetime or annual limits.
Importantly, the ACA’s individual market has similar average premiums as employer-sponsored plans.
While employers offset the high cost of health insurance for workers, under the ACA, the federal government provides tax credits based on income to make self-purchased coverage more affordable.
Even with these tax credits, the ACA faced criticism about not being affordable enough.
In 2021, Congress temporarily enhanced the ACA’s premium tax credits, and then extended them through 2025 as part of the Inflation Reduction Act, lowering out-of-pocket premium payments across the board for enrollees.
With coverage more affordable, Marketplace enrollment hit record highs.
The expiration of the enhanced premium tax credits at the end of 2025, combined with insurers charging more for coverage, means ACA Marketplace enrollees are facing higher costs this year.
On average, up 58 percent, or about $780 more than last year.
To offset the higher costs, many switched to lower premium plans. But that comes with a tradeoff: higher deductibles.
A KFF survey of ACA Marketplace enrollees found 3 in 10 switched plans in 2026, the large majority citing cost. Another 1in 10 dropped coverage altogether and are now uninsured.
While the expiration of the ACA’s enhanced premium tax credits has raised affordability concerns for many enrollees, the underlying question it raises is a wider reaching one:
What is an affordable level of health care costs that people should be expected to bear?