High ACA Premiums Aren’t an Accident, It’s a Business Model for Insurers

 Health care costs are crushing Americans, and Washington keeps pretending it’s a mystery. It isn’t. Obamacare didn’t just fail to give Americans access to care they could afford; it redesigned the system to guarantee insurance companies huge profits. And year after year, Democrats have doubled down on that design, protecting insurers while families pay more for less care.

Affordability is the number one problem in American health care. It’s a problem that crosses party lines. Last week, President Trump introduced The Great Healthcare Plan, designed to lower costs and increase access to care. Health care costs are so out of control that the typical American family will spend 40 percent of their income just on health insurance premiums by 2032. That is not sustainable for any American.

Since the Affordable Care Act (ACA) was enacted, premiums in the individual market have surged by 168 percent, far outpacing employer-sponsored plans, which rose 70 percent, and inflation, at about 40 percent. This year alone, the average ACA family premium is projected to exceed $27,000. Deductibles have nearly doubled as well, meaning families are paying more every month and still pay thousands of dollars in out-of-pocket costs before their coverage even kicks in. In 2026, the deductible for the most popular plan is more than $5,000.

Democrats often respond to this crisis with a familiar solution: more spending. But subsidies haven’t fixed the problem; they’ve made it worse.

Under the ACA, subsidies go to insurance companies and can only be used toward the most expensive plans on the market. As premiums rise, subsidies follow dollar for dollar. Insurers set the prices, and taxpayers guarantee the revenue. Today, 93 percent of ACA enrollees receive subsidies, and taxpayer subsidies per enrollee have increased 56 percent since 2014. According to the Joint Economic Committee, only about one-third of those subsidy dollars directly benefit consumers.

The rest flows straight into insurance company balance sheets.

This is not an accident; it’s an incentive structure. Expanding subsidies and enrolling more people doesn’t pressure insurers to compete or lower prices; it rewards them for charging more. Every premium hike is matched with more taxpayer money. Democrats celebrate higher enrollment numbers while ignoring the reality that the system financially depends on rising costs.

At the same time, the ACA’s anti-market structure has fueled widespread consolidation. One or two insurance companies control the market in most states, pushing out smaller insurers that can’t survive in a system that rewards scale, political influence, and administrative complexity over efficiency and consumer choice.

As competition disappears, so does access to care. Eighty-three percent of enrollees are in narrow-network plans, which limit the hospitals and physicians they can access. Obamacare networks typically include fewer than half of all care providers in an area. This is especially concerning for patients with serious or complex conditions. Families routinely face restricted formularies, denied claims, and endless prior-authorization hurdles. According to the Kaiser Family Foundation, 58 percent of insured Americans experienced a problem with their insurer in the past year, and 73 million claims were denied.

Meanwhile, to avoid Obamacare’s cap on insurance profits, insurance companies have been busy buying hospitals, physician groups, and pharmacies, and paying them more to earn higher profits on services. UnitedHealth Group now generates roughly 42 percent of its revenue, or $136 billion, from internal transactions between its insurance arm and the providers and pharmacy benefit managers it owns. That isn’t care coordination; it’s a monopoly designed to extract profit at every step.

And the profits are staggering. In a recent year, the largest insurers earned more than $71 billion. Insurance CEOs collected nearly $150 million in compensation – all while premiums and out-of-pocket costs kept rising for consumers. The ACA has become a massive transfer of taxpayer dollars to private insurance companies, propped up by policies that Democrats refuse to question.

This is the uncomfortable truth: Democrats claim to stand with patients, but their health care policies protect insurers. They defend a system that rewards size, spending, and consolidation, then act surprised when costs spiral out of control. Every subsidy expansion, every enrollment push, every refusal to introduce real competition locks Americans deeper into a system that treats patients like piggybanks.

There is another path. Congress needs to restore competition by breaking up the insurance and health system monopolies. We need full transparency on prices and quality. If insurers, hospitals, and other service providers refuse to provide prices up front, patients shouldn’t be charged. Consumers should be able to choose any plan that works for them and bring the subsidy with them. If the plan they pick costs less than the subsidy, the difference should be deposited in a Health Savings Account. Insurers would compete for consumers, versus patients being at the mercy of big conglomerates through realigned incentives that ensure health plans and providers only succeed when patients do.

Until that happens, ACA premiums will keep increasing, subsidies will forever increase, insurers will keep cashing in, and working families will keep paying the price for a health care system designed to put profits over patients.

Joel White is the President of the Council for Affordable Health Coverage (CAHC). CAHC is a broad-based alliance with a primary focus of bringing down the cost of health care for all Americans. CAHC promotes policies that lower health costs through increased competition, informed consumers, and more choices to help promote access to affordable coverage.

https://www.realclearhealth.com/articles/2026/01/27/high_aca_premiums_arent_an_accident_its_a_business_model_for_insurers_1161300.html