{"id":6771,"date":"2025-11-26T15:27:03","date_gmt":"2025-11-26T15:27:03","guid":{"rendered":"https:\/\/blogs.luc.edu\/compliance\/?p=6771"},"modified":"2025-11-26T15:27:03","modified_gmt":"2025-11-26T15:27:03","slug":"the-affordable-care-acts-regulatory-drawbacks","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=6771","title":{"rendered":"The Affordable Care Acts Regulatory Drawbacks"},"content":{"rendered":"

Mateo Rodriguez\u00a0<\/span><\/i>\u00a0<\/span><\/p>\n

Associate Editor\u00a0<\/span><\/i>\u00a0<\/span><\/p>\n

Loyola University Chicago School of law, JD 2027\u00a0<\/span><\/i><\/p>\n

The recent government shutdown has brought the Affordable Care Act (ACA) to the center of American politics once again. <\/span>While the law was able to <\/span>successfully expand coverage to millions of Americans<\/span><\/a>, the law\u2019s continued reliance on subsidies shows its inability to lower premiums due to structural healthcare issues. The temporary subsidy program in particular, which was first expanded during the Covid-19 pandemic in <\/span>2021<\/span><\/a>, was intended as short term relief and has now become essential for keeping premiums affordable for Americans. This overreliance on federal aid exposes a deeper structural weakness with the ACA, which is the law\u2019s inability to sustain affordability without government intervention. As Congress debates whether to renew these subsidies, the question they must ask themselves is whether the ACA\u2019s regulatory framework can ever function as a truly self-sustaining reform without significant subsidies.<\/span>\u00a0<\/span><\/p>\n

<\/p>\n

Origins of the ACA\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

The <\/span>ACA was signed into law<\/span><\/a> by President Barack Obama in March 2010<\/span> and represented the most sweeping healthcare reform since the creation of Medicare and Medicaid. The law\u2019s main objective was to expand access to affordable health<\/span> care for millions of Americans. <\/span>The law attempted<\/span><\/a> to accomplish this by <\/span>(1) creating a health insurance marketplace<\/span><\/a> where individuals could purchase private coverage, usually with federal subsidies, <\/span>(2) expanded Medicaid eligibility to low-income adults<\/span><\/a> in participating states, and <\/span>(3) by introducing consumer protection regulations<\/span><\/a>, such as prohibiting insurers from denying coverage due to pre-existing conditions or imposing lifetime caps on benefits.\u00a0<\/span>\u00a0<\/span><\/p>\n

The ACA also sought to promote preventative care and shift the healthcare system towards better health outcomes. It requires most Americans to obtain health insurance <\/span>through tax penalties<\/span><\/a> and imposed new obligation on employers and insurers to <\/span>share responsibility for coverage.<\/span><\/a> Although the law succeeded in reducing the uninsured rate to <\/span>historic lows<\/span><\/a>, it also introduced new challenges, including <\/span>higher premiums and deductibles<\/span><\/a> for consumers and complex <\/span>regulatory burdens<\/span><\/a> for insurers and healthcare providers. These pressures have fueled ongoing political debate over whether the ACA is sustainable in the long term.\u00a0<\/span>\u00a0<\/span><\/p>\n

2021 subsidies\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

What Congress is currently debating involves the ACA subsidies that were passed under the <\/span>American Rescue Plan Act (ARPA)<\/span><\/a>. The ARPA was initially designed as an emergency measure to stabilize the market during Covid and temporarily increased the size and scope of premium tax credits available to Americans purchasing insurance through the ACA marketplace. The law most <\/span>notably eliminated the 400 percent federal poverty level income cap<\/span><\/a>, allowing middle-income families to qualify for assistance. It also reduced the percentage of income that lower and middle-income households were required to contribute towards premiums, <\/span>capping costs at 8.5 percent of household income regardless of income level.<\/span><\/a>\u00a0<\/span>\u00a0<\/span><\/p>\n

The enhanced subsidies significantly reduced the costs of premiums for millions of enrollees and led to a record number of Americans signing up for coverage in <\/span>2022<\/span><\/a>. However, these subsidies came with a substantial price, which has been estimated to include tens of <\/span>billions of dollars annually.<\/span><\/a> Further, the program was meant to be temporary and only last for two years. Congress then extended the subsidies again in 2023 as part of the <\/span>Inflation Reduction Act.<\/span><\/a> Yet, the extension did little to address the underlying issue of affordability in the individual marketplace. Instead, it continued to create a system that made the ACA dependent on continuous federal subsidies.\u00a0<\/span>\u00a0<\/span><\/p>\n

What to do now<\/span><\/b>\u00a0<\/span><\/p>\n

The ACA subsidies now being fought over in the halls of Congress is a temporary solution to a more systemic issue. While the ACA transformed American healthcare by expanding coverage and protecting patients from insurance discrimination, it did not solve the underlying structural inefficiencies that drive up costs. The law\u2019s regulatory framework, which includes heavy federal oversight, mandated benefit structures and fragmented state implementation, has produced markets that are highly dependent on government subsidies to remain affordable. This dependency shows that rather than fostering true competition or innovation, the ACA often createsadministrative complexity and reduces consumer choice.\u00a0<\/span>\u00a0<\/span><\/p>\n

As a result, affordability remains tied not to market efficiency, but to continued federal spending. Each time these subsidies are set to expire, Congress just revisits the same debate. This recurring cycle highlights the ACA\u2019 central regulatory flaw, which is that it treats the system of healthcare inflation but not the root cause. If law makers want to create a healthcare program that works, they must be willing to address the administrative costs of healthcare and move away from crisis management.\u00a0<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The recent government shutdown has brought the Affordable Care Act (ACA) to the center of American politics once again. While the law was able to successfully expand coverage to millions of Americans, the law\u2019s continued reliance on subsidies shows its inability to lower premiums due to structural healthcare issues. The temporary subsidy program in particular, which was first expanded during the Covid-19 pandemic in 2021, was intended as short term relief and has now become essential for keeping premiums affordable for Americans. This overreliance on federal aid exposes a deeper structural weakness with the ACA, which is the law\u2019s inability to sustain affordability without government intervention. As Congress debates whether to renew these subsidies, the question they must ask themselves is whether the ACA\u2019s regulatory framework can ever function as a truly self-sustaining reform without significant subsidies.\u00a0<\/p>\n","protected":false},"author":175,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,34],"tags":[],"class_list":["post-6771","post","type-post","status-publish","format-standard","hentry","category-health-insurance","category-healthcare-compliance"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/users\/175"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6771"}],"version-history":[{"count":1,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6771\/revisions"}],"predecessor-version":[{"id":6772,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6771\/revisions\/6772"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}