Isaac D. Buck

Volume 71, Issue 2, 261-306

As it approaches its tenth birthday, the Patient Protection and Affordable Care Act (ACA) is devolving. Intended to solve problems that had vexed American health care for generations, the ACA built a comprehensive structure by providing more Americans with accessible health insurance, reordering the private insurance market, expanding and reconfiguring Medicaid, and installing rational incentives into America’s health care enterprise. Without question, it was the most important piece of health care legislation since the mid-1960s, and it brought about positive change for millions of Americans.

However, over its short lifespan, the ACA has faced persistent practical, popular, and policy-based challenges. It remains politically tenuous, with the law’s imperfections fueling an uninterrupted barrage of legal, administrative, and regulatory attacks, which, piece by piece, have weakened its overall effectiveness. Instead of installing a comprehensive system, the ACA opted to protect American patients and beneficiaries from the market’s worst effects without any effective means for cost control. Its failure to address the cost of health care has continued to haunt it, making it unclear whether it will fully collapse or whether a mutated version will lumber into the future. Either would be devastating to the future of American health care. This cost challenge is vividly illustrated by the acute pain experienced by those who receive insurance through its newly constructed exchanges, where millions of Americans face rising premiums and deductibles.

Using lessons from behavioral economics, this Article suggests a reimagining and reordering of the private ACA marketplace in an effort to put it on a more stable financial footing. Tools from the field of behavioral economics—relied upon in the federal Medicare program, public health laws, and employee wellness plans—could be deployed to the ACA marketplaces by creating smarter subsidies that financially reward the most cost-conscious insurance companies. This would sharpen the incentive for insurance companies to seek increasing discounts, lowering the price of care. And no matter the future of the ACA, insights posited here must be part of any future reform effort to address the cost of American health care—an indispensable, but consistently neglected policy goal.