Commonwealth Foundation Policy Chief: Affordable Care Act ‘did not succeed’ in lowering healthcare costs

Nathan Benefield said the Affordable Care Act (Obamacare) has failed to deliver on its central promise of reducing healthcare costs, arguing that both government spending and family expenses have continued to rise since its passage.

“It did not succeed in that,” Benefield said on the Health Policy Podcast. “We’ve seen in the 16 years since that was passed, dramatic increases in overall healthcare costs.”

Benefield, who serves as chief policy officer at the Commonwealth Foundation, said the law’s structure has contributed to higher prices, pointing to subsidies and coverage mandates that he said distort incentives in the insurance market.

Listen to this episode:

• Apple

• Spotify

“When you think about it, like, ‘Hey, we’re gonna give insurance companies subsidy for these insurance plans,’ that doesn’t give them any incentive to compete or reduce costs,” he said. “There are actually kind of fewer plans being offered now, but at a higher cost to families.”

He added that expanded government subsidies have not reduced out-of-pocket costs for families as intended.

“The idea was like, well, if we have more government spending, it will reduce what individual families are paying. The reality is, it didn’t do that,” Benefield said.

Benefield also raised concerns about what he described as “perverse incentives” created by subsidy structures, arguing that consumers and insurers alike lack motivation to control costs.

“That’s an incentive for individuals to not shop around… There’s also no incentive for the insurance companies to offer more affordable plans,” he said.

Beyond pricing, Benefield pointed to questions about utilization within subsidized plans, citing data from Pennsylvania’s exchange.

“Almost a quarter of these plans had no usage over a year,” he said, suggesting some enrollees may have maintained coverage they did not actively use.

He also highlighted structural issues in government-backed coverage, particularly Medicaid, which he said can limit access to care due to lower reimbursement rates.

“Medicaid is paying 75 cents on a dollar of what private insurance pays for the same services,” Benefield said.

As an alternative, Benefield pointed to market-based reforms, including expanded health savings accounts and direct primary care models that give patients more control over healthcare spending.

“A much more flexible and portable plan… where all of your healthcare dollars go into that and you as an individual control [them],” he said.

Benefield said meaningful reform is unlikely in the near term due to political and institutional resistance but argued that financial pressures could eventually force changes.

“I don’t put the faith in politicians as much as I put it in math and reality,” he said.