{"id":1499,"date":"2025-12-11T09:00:00","date_gmt":"2025-12-11T10:00:00","guid":{"rendered":"http:\/\/www.dangeladvertising.com\/?p=1499"},"modified":"2025-12-12T15:05:19","modified_gmt":"2025-12-12T15:05:19","slug":"health-care-consolidation-and-rising-costs-happen-but-obamacare-is-not-the-key-culprit","status":"publish","type":"post","link":"http:\/\/www.dangeladvertising.com\/index.php\/2025\/12\/11\/health-care-consolidation-and-rising-costs-happen-but-obamacare-is-not-the-key-culprit\/","title":{"rendered":"Health Care Consolidation and Rising Costs Happen, but Obamacare Is Not the Key Culprit"},"content":{"rendered":"

In a recent Meet the Press<\/em> appearance, Sen. James Lankford (R-Okla.) joined a growing number of Republicans who are speaking out against Obamacare. One of his lines of attack: that the Affordable Care Act fueled health care consolidation.<\/p>\n

\u201cWhat Democrats did 15 years ago was they radically changed all health care in America. They moved all physicians under hospitals. They changed all the reimbursement programs. They shifted everything in,\u201d Lankford said Nov. 9.<\/p>\n

This is one of a collection of Republican talking points related to the ACA that\u2019s been regularly<\/a> reprised<\/a>, and there\u2019s a reason for it.<\/p>\n

Democrats have been promised a Senate vote this month on whether to extend the ACA\u2019s enhanced subsidies, set to expire at year\u2019s end. The debate, however, has given Republicans an opportunity to resurface old criticisms and reignite efforts to overhaul or even undo the ACA. One GOP argument is that the sweeping health law fueled industry consolidation, which has led to higher prices and pushed more doctors to sell their practices to hospitals or insurers.<\/p>\n

But industry experts disagree about how much this market trend can be tied to the law known as Obamacare.<\/p>\n

Like everything in health policy, it\u2019s complicated.<\/p>\n

\u201cMost of us live in a different reality,\u201d said Chip Kahn, president and CEO of the Federation of American Hospitals, which supports extending<\/a> the enhanced tax credits. \u201cOur health system has many challenges, and I can\u2019t say the cost to individuals, to taxpayers, is not an issue. But to say having better coverage for more people made all these problems worse is really a stretch.\u201d<\/p>\n

What\u2019s Happened to Doctors and Hospitals?<\/strong><\/p>\n

First, some context. The ACA was passed by Congress in 2010, and most of its major provisions became effective in 2014.<\/p>\n

Many health care mergers took place both before and after Obamacare became law, so it\u2019s hard to quantify its effect.<\/p>\n

From 1998 to 2017 \u2014 a nearly two-decade period that included the first three years of full ACA implementation \u2014 1,573 hospital mergers<\/a> took place. An additional 428 hospital and health system mergers were announced from 2018 to 2023, according to a 2024 brief by KFF, a health information nonprofit that includes KFF Health News.<\/p>\n

\u201cThe consolidation trend was in place before the ACA and just continued\u201d as hospitals and other entities sought to improve their negotiating power, said Glenn Melnick, who studies hospital economics and is a professor at the University of Southern California\u2019s Price School of Public Policy.<\/p>\n

The KFF brief did not directly address what role the ACA might have played in such mergers, although others have suggested its focus on coordinating care may have led to some of the activity.<\/p>\n

Hospital groups<\/a> contend that mergers are needed to bolster finances and counter increasing insurer consolidation, and that they can result in cost savings. Others disagree, arguing that many studies show price increases following mergers.<\/p>\n

Even with that trend \u2014 and despite what Lankford said \u2014 not all doctors now work for hospitals.<\/p>\n

The percentage of physicians who have sold their practices to hospitals or private equity groups continues to rise, with only 42% currently working in private practices<\/a>, according to the American Medical Association. That\u2019s down from about 60% in 2012, before the ACA\u2019s main provisions took effect.<\/p>\n

Those who sold practices during the past 10 years, according to the AMA, most often cited inadequate payment rates as the reason.<\/p>\n

Others note that many doctors want to be part of a larger group, with more scheduling flexibility and fewer paperwork hassles. Other changes, including the 2009 law known as the HITECH Act<\/a>, which required hospitals and doctors to boost their use of electronic medical records, added to physicians\u2019 desire to sell, Kahn said.<\/p>\n

\u201cPhysicians today, with their heavy debt load, are not looking to go into the old individual practice anymore,\u201d Kahn said. \u201cThat didn\u2019t happen because of the ACA.\u201d<\/p>\n

Another key dynamic driving this market trend is market leverage, which was happening anyway, say some policy experts.<\/p>\n

Hospitals \u201cgot control of the physician groups for contracting purposes,\u201d Melnick said.<\/p>\n

When hospitals meet to negotiate with insurers, \u201cthey\u2019ll say, \u2018We\u2019ll drop out of your network, and we control 30% of the doctors, so they\u2019ll drop out, too.\u2019 It was a leverage play, and it worked,\u201d Melnick said.<\/p>\n

How Do Insurers Fit In?<\/strong><\/p>\n

Like hospitals, some insurers have been on a buying spree, snapping up doctor practices, for example. Optum, a division of UnitedHealth Group, owns or is affiliated with nearly 10% of the nation\u2019s physicians<\/a>.<\/p>\n

The health law \u201ctriggered an arms race among insurers and hospitals to grow larger and more expensive, leaving patients and small businesses with rising premiums and shrinking options,\u201d said Joel White, president of the Council for Affordable Health Coverage<\/a>, in testimony before a Senate subcommittee<\/a> in November. The council touts among its priorities right-leaning issues such as opposing government-run health care and supporting expanded market competition and health savings accounts.<\/p>\n

Again, the insurance question is complex.<\/p>\n

The number of insurers filing annual reports<\/a> with the National Association of Insurance Commissioners has fluctuated: for example, 949 in 2015 and 1,155 last year.<\/p>\n

But aggregate numbers are only one measure. Several big insurers control large market shares. In one recent analysis<\/a> that looked across a variety of types of insurance \u2014 not just ACA plans \u2014 the American Medical Association concluded that most areas are highly concentrated, with about 47% of those markets having one insurer with a commercial market share of 50% or more.<\/p>\n

The AMA says such market power leads to higher premiums and results in reduced payments to doctors.<\/p>\n

As for the marketplaces that offer ACA coverage, the number of insurers has also fluctuated over time, usually because of variations<\/a> in anticipated premiums and the regulatory landscape, with a national average of nearly eight at the law\u2019s inception,<\/a> falling to 5.4 in 2018, but rising to nearly 10 nationally in 2025, according to KFF. Because that\u2019s an average, some states, such as Texas, have 15 insurers, while seven states \u2014 Alaska, Arkansas, Connecticut, Hawaii, Rhode Island, Vermont, West Virginia \u2014 and the District of Columbia have only two.<\/p>\n

Premium increases aren\u2019t new either, nor are they hitting only ACA plans.<\/p>\n

In fact, premiums for people buying their own coverage and those for workers who get insurance through an employer have almost always risen yearly \u2014 often above inflation<\/a> levels \u2014a trend that predates the ACA.<\/p>\n

Critics of the ACA note that premiums in the individual market were lower before the law kicked in. However, critics often don\u2019t note how different pre-ACA coverage was for people in the individual market, which could make it less expensive. Before the law, for example, insurers could reject people with preexisting health conditions, charge women more than men, and set annual or lifetime dollar limits on coverage. After 2014, that wasn\u2019t allowed in ACA plans.<\/p>\n

Average premiums for the benchmark \u201csilver\u201d ACA plans<\/a> have gone from $481 nationally in 2018 to $497 in 2025, according to KFF. The average monthly premium jumps to $625 next year, partly because of insurers\u2019 expectations of higher costs and a decline in enrollment if Congress does not extend the more generous tax subsidies. Those are averages, and prices will vary across the country depending on such things as age, location, and household income.<\/p>\n

The conservative Paragon Health Institute notes that rising premiums mean larger taxpayer-supported subsidies<\/a>. Deductibles, too, have gone up, with people on \u201cbronze\u201d plans, which have the lowest premiums, facing an average $7,476 deductible<\/a> next year, compared with $5,113 in 2014.<\/p>\n

The Cost-Consolidation Link<\/strong><\/p>\n

A 2025 Health and Human Services report<\/a>, issued during the last days of the Biden administration, found the trend of highly concentrated hospital services in most metropolitan statistical areas had started before and continued after the ACA. Prices also rose. The report, which noted the role of private equity firms in consolidation efforts, also cited studies showing physicians increasingly merged \u2014 with one another, hospitals, or private equity-backed firms.<\/p>\n

That\u2019s important because the largest share of health care spending<\/a> in the U.S. goes to hospital care,<\/a> with physician services not far behind.<\/p>\n

For Kahn, at the hospital federation, the real reason behind the mergers is financial: Many hospitals, he says, had to expand their reach or risk going under.<\/p>\n

\u201cMany health economists are my best friends,\u201d Kahn said, \u201cbut they have tunnel vision when they look at the health system.\u201d Hospitals must have sufficient revenue streams to cover the cost of patient care, he said, and consolidation is their way to respond \u201cto all of the burdens and requirements and demands\u201d they face.<\/p>\n

While there is no question that health care consolidation has happened, much of it predated the ACA, Melnick said.<\/p>\n

\u201cAt the end of the day, the ACA market never became that big to drive the overall restructuring of the industry,\u201d he said. \u201cA lot of what they are attributing to the ACA would have happened anyway.\u201d<\/p>\n

KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n

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