Obamacare: The Third-Fastest Expansion of Health Insurance in U.S. History

The Affordable Care Act fills gaps left by earlier policies that gave Americans health coverage

Wage controls created by FDR to curb inflation during World War II spurred employers to offer health coverage as a fringe benefit.

Wage controls created by FDR to curb inflation during World War II spurred employers to offer health coverage as a fringe benefit.

Source: Library of Congress

The Obama administration announced today that the Affordable Care Act has expanded health coverage to 16.4 million people who were previously uninsured. This means Obamacare has expanded medical insurance faster than any new policy since Medicare and Medicaid were created in 1965.  

The announcement today counts 14.1 million people who have enrolled in private plans or expanded Medicaid coverage since 2013, and 2.3 million young adults who were allowed to stay on parent's health plans until the age of 26. The percentage of Americans without health insurance dropped from 20.3 percent two years ago to 13.2 percent today, according to the administration's analysis of Gallup polling data. That's impressive.  

The greatest increase in U.S. health insurance coverage, however, came from a policy that had nothing to do with health care: wage controls intended to curb inflation during World War II. That encouraged employers to offer health benefits, rare before the middle of the 20th century, because they couldn't raise salaries.

Here's a look at how different policies increased coverage five years out.

For wage controls, we look at the net growth in health coverage in the five years after the 1942 Stabilization Act that gave President Franklin D. Roosevelt the power to freeze wages. Subsequent laws gave health insurance provided by employers favorable tax treatment. (Economists later blamed this for inflating medical costs in the second half of the 20th century.) By 1960, 137 million Americans would be in private health plans mostly provided by employers. 

Medicare and Medicaid were created in 1965 to help people who didn't get medical benefits from jobs—the elderly, poor, and disabled. Obamacare, signed into law March 23, 2010, was meant to fill many of the gaps that remained, offering coverage to people too young for Medicare who didn't have health plans through jobs. Even with the law, there will still be a vast population of uninsured people in America, including undocumented workers and low-income residents of states not expanding Medicaid—about 30 million people, according to the Congressional Budget Office.

For more, read this QuickTake: Obamacare, Assessed

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