ACA and Health Costs: Historical Evidence and Limitations
A dated look at 2014 CMS spending and KFF employer premium findings, without treating national trends as a Texas renewal forecast.
3 min readBy Dustin Neider
Key Takeaways
- National spending, premiums and patient out-of-pocket costs measure different things.
- CMS reported 5.3% national spending growth in 2014; that is not a per-person premium change.
- KFF found 3% growth in average employer family premiums in 2014.
- Historical national averages cannot isolate the ACA’s effect on a particular Texas plan.
The Affordable Care Act changed coverage and financing, but its effect on the cost of care cannot be reduced to one premium statistic. This historical review examines national CMS spending findings and KFF employer survey results for 2014. It does not estimate the ACA’s isolated causal effect or predict what a Texas employer or individual will pay today.
What did the historical evidence measure?
The historical CMS findings measured national health spending, while the KFF employer survey measured employer-sponsored premiums for a different population. Neither measure is an employee payroll deduction or a forecast for a Texas renewal. Keep the reporting year, population and unit attached to each figure before using the evidence in an employer decision.
| Source and period | Finding | Limitation |
|---|---|---|
| CMS, 2014 national expenditures | Total spending grew 5.3%; per-capita spending grew 4.5%. CMS report released December 2, 2015 | National spending is not a household premium or an employer renewal rate. |
| KFF/HRET, 2014 employer survey | Average annual family premium was $16,834, up 3% from 2013. 2014 survey findings | Employer-sponsored national averages are not Texas individual-market prices. |
Why can spending rise while some people gain protection?
The CMS historical release associates faster 2014 spending growth with expanded insurance coverage and rising prescription drug costs. More insured people using covered services can increase aggregate spending without showing that every enrolled person faces a higher premium. CMS also reported 1.3% growth in consumer out-of-pocket spending for that year; that measure excludes premiums.
The KFF employer survey measures premiums for a different population and reports variation by firm size, geography and benefit design. Its national averages describe the period, not what any one employer would have paid without the ACA. Neither source supports assigning all prescription-price or insurer-premium changes to the law.
What can Texas employers conclude?
Keep the year, population, unit and payer attached to every number. A total expenditure is not a per-beneficiary saving, and an observed increase is not proof of a single cause. Early implementation findings do not forecast premiums in later years.
For a current decision, compare your employer contribution, employee payroll deduction, deductible, out-of-pocket exposure, network and prescriptions using current proposals. Historical evidence can explain context; it cannot replace a current plan comparison or prove that the ACA alone changed a particular renewal.
See also the ACA implementation timeline and our employer compliance support.
Employer worksheet: separate the cost measures
Use the same coverage tier, enrollment assumptions and period for the current plan and each proposal. Leave missing items marked as unknown rather than treating them as zero. Historical national growth rates should not be entered as a forecast for your group.
| Measure | Record for each option | Interpretation |
|---|---|---|
| Total premium | Combined employer and employee premium for the same tier and period | A coverage price, not all spending on care |
| Employer contribution | Employer premium share and any separately funded account contribution | Company budget responsibility; keep separate account funding visible |
| Employee contribution | Payroll premium deduction for that same tier and period | A lower deduction may reflect a larger employer subsidy |
| Member care exposure | Deductible, copays, coinsurance, exclusions and applicable limits | Separate potential treatment expenses from payroll deductions |
| Total care spending | Defined claims or expenditure measure, population and period, if available | Do not substitute a national historical total for group-specific evidence |
If payroll deductions fall but the total premium is unchanged, identify who now pays the difference. If premiums fall but deductibles or access change, document that tradeoff. For current comparisons, use the Houston employer health insurance cost guide; the historical sources above remain evidence about their stated periods.
General information for employers, not legal, tax, or medical advice; plan documents and current rules control.
To review your employer-plan questions, contact PCI Solutions.
Frequently Asked Questions
Did the ACA make every person’s health costs lower?
These historical findings do not establish that. Premiums, financial assistance, use of care and cost sharing affect different households differently.
Does 2014 national spending growth predict my renewal?
No. National totals cover many payers and reflect enrollment, prices and utilization; a current employer renewal has its own population and plan terms.
Do the CMS and KFF figures prove the ACA caused a premium change?
No. They describe different historical measures and populations. A causal estimate requires an appropriate comparison and a method that separates other influences.
About the author
Dustin Neider — President of PCI Solutions, insurance broker and ACA specialist with nearly 20 years of experience in health insurance.
