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Dr. Michael Guadagnino holds a Bachelor’s Degree in Biology from the New York Institute of Technology and earned his Doctor of Chiropractic degree from New York Chiropractic College. He served as Vice President of Public Relations for the New Jersey Libertarian Party from 2017 to 2022. Dr. Guadagnino is the author of the best-selling book Fitness Over 50, 60, 70 and Beyond, available on Amazon and other major platforms. He also shares health and wellness insights on Instagram at @Dr._Guadagnino. As a regular guest contributor, Dr. Guadagnino writes on health care topics through the lens of personal freedom and individual liberty. |
The Affordable Care Act, commonly called “Obamacare,” was “designed” to expand healthcare coverage to millions of Americans, but it also created major financial opportunities for insurance companies. At its core, the law tyrannically required most Americans to have health insurance or pay a penalty (until the federal mandate penalty was reduced to zero in 2019). This mandate, paired with subsidies for lower-income individuals, brought millions of new customers into the insurance market—many of whom were previously uninsured. For insurance companies, this meant an immediate and sustained surge in policyholders, which translated into billions in new premium revenue.
Another financial advantage came from the creation of government-run online marketplaces where consumers shop for plans. While the ACA imposed certain regulations—such as requiring coverage for pre-existing conditions—it also guaranteed that insurers would have a central, highly visible platform to market their products to millions of potential customers. The plan comparisons often increased competition, but it also pushed more people to purchase coverage rather than skip it altogether, again expanding insurers’ customer base.
The ACA also included government subsidies to help low- and middle-income Americans afford coverage. These subsidies didn’t just potentially help patients—they guaranteed insurers would still receive substantial payments for premiums, even if customers could not afford the full amount themselves. In effect, taxpayer dollars flowed directly into insurance company revenues through these subsidies, ensuring steady cash flow.
Insurance companies also benefited from “risk corridor” and “reinsurance” programs in the ACA’s early years. These programs were designed to supposedly stabilize the market by compensating insurers who took on higher-risk, sicker populations. This safety net reduced financial uncertainty, making it easier and more profitable for insurers to participate in the exchanges without fear of massive losses from expensive claims. This form of corporatism took away the risk that is seen in most every other company.
In addition, by requiring a standardized set of “essential health benefits,” the ACA allowed insurers to market more predictable and comprehensive plans. While this increased coverage obligations, it also let companies set higher premiums based on the richer benefits, further increasing revenue. Many insurers also found ways to adjust deductibles, copays, and networks to maintain or improve profit margins despite regulatory limits.
In short, while the ACA was framed as a patient-first reform, it created an expanded, subsidized, and stabilized marketplace for insurance companies. With millions of new paying customers, guaranteed government support, and reduced risk exposure, “Obamacare” was not just a healthcare overhaul—it was a financial windfall for the health insurance industry.