This article argues that while inflation is a complex issue with many contributing factors, the Affordable Care Act (ACA) of 2010 played a significant role in fueling rising healthcare costs. The author contends that the ACA's market consolidation and vertical integration provisions, intended to improve competition and access, have instead concentrated power in fewer organizations, leading to increased prices.
to rise 7% in 2025, similar to the 6% premium increase that took place in 2024. While this reflects myriad contemporary issues, the causes of today’s rising prices are rooted in decisions made 15 years ago with the passing of the Affordable Care Act of 2010. The bill led to market consolidation and vertical integration which are core contributors to today’s price increases.
‘$500 Billion In Three Weeks’—Tesla Billionaire Elon Musk Issues ‘Crazy’ Fed ‘Bankruptcy’ Warning After Sparking Bitcoin Price Panic At the same time, other eligibility and reporting requirements had the same effect on physician practices, giving larger, more complex organizations an unspoken advantage. Groups of independent practitioners as well as other types of small and mid-sized practices often lacked the infrastructure, technology, or other resources needed to succeed on their own.
Large organizations–be they insurers or health systems–have little incentive to reduce spending or improve quality of care once they consolidate their hold on substantial portions of a market. Lacking competition, they can set prices high and expect that members and patients will be forced to pay them.
Over a decade ago, I predicted that the type of regulation embodied in the ACA would end in greater consolidation, more expensive care, and higher premiums. Today, we shouldn’t be surprised that those have become a reality. While some features of the ACA have undoubtedly benefited American consumers, namely, the requirements to cover preexisting conditions and allow young adults to stay on their parents’ plans until age 26, the bulk of the legislation was problematic.
Healthcare Inflation Affordable Care Act Market Consolidation Vertical Integration Price Increases
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