Healthcare in Crisis: Why Obamacare Still Leaves Americans Paying Too Much

If you have health insurance, you know premiums are unaffordable. While the Affordable Care Act (ACA) expanded coverage access, it failed to address the fundamental drivers of escalating healthcare costs—a flaw that continues to burden millions today.

One major contributor is the system’s complex administrative burden. Private insurers, government programs, and employer-sponsored plans operate in silos with separate billing, coding, and compliance systems. The Peter G. Peterson Foundation reports the U.S. spends $1,000 per person annually on administrative costs alone—five times higher than other wealthy nations—and these expenses are ultimately passed to consumers through inflated premiums.

The ACA’s guaranteed issue requirements also exacerbated costs. By mandating insurers accept all applicants regardless of pre-existing conditions, the law forced coverage for high-risk individuals without premium adjustments aligned with health status. This approach violates standard insurance principles where riskier clients typically pay higher premiums, and community rating rules further redistribute costs to younger, healthier enrollees.

Additionally, the ACA’s requirement that most plans cover “essential” benefits—maternity care, mental health services, and preventive care—raised baseline prices without proportional use by many individuals. Pre-ACA plans excluded these services, offering cheaper but less comprehensive options. The mandate increased premiums for all, including those who rarely utilized the covered benefits.

The U.S. spends $14,885 per person annually on healthcare in 2024—far exceeding the average of $7,371 among other wealthy nations. Despite superior outcomes in many countries, the system’s inefficiencies persist. Medicare alone accounts for $839 billion in spending annually, with federal healthcare expenditures totaling $1.9 trillion in 2024—a figure representing roughly 27% of all federal spending.

A critical flaw remains the absence of price transparency. Unlike cars, groceries, or other goods, healthcare costs are rarely known upfront—creating a system that hinders market competition and consumer choice. This lack of clarity has long been a barrier to affordable care.

Prescription drug costs have also surged, with the U.S. subsidizing higher prices in other nations through international trade. President Trump has signaled efforts to address drug pricing via tariff negotiations, though systemic challenges remain. Meanwhile, promoting preventive health measures—such as initiatives like the MAHA movement—could reduce long-term service demands and improve outcomes.

The path forward requires addressing these structural flaws rather than incremental changes. Without reform, America’s healthcare system will continue failing its promise of affordable care for all.