In his final State of the Union address last night, President Obama spent little time discussing healthcare programs. In sum, the president made one generic reference to Medicare, made no mention of Medicaid, and spent only about 30 seconds discussing his signature healthcare legislation—the Affordable Care Act (ACA)—recapping its main purpose and making three claims about how it is performing. This piece aims to fill in some of the gaps.

POTUS Claim: Purpose of the ACA Is to Ensure Portability of Coverage

Last night, the president stated that the ACA was “about filling the gaps in employer-based care so that when you lose a job, or you go back to school, or you strike out and launch that new business, you’ll still have coverage.” If that was the primary purpose of it, the law would not have needed to be so large and complicated and it likely would have attracted bipartisan support. Center-right healthcare experts have long advocated increasing portability of coverage and breaking the link between health insurance and work.

If portability was the primary purpose of the ACA, it would not have been necessary to standardize health insurance with a plethora of required coverage mandates, implement a complicated tax and subsidy system to induce people to enroll, and enact a series of distortionary price controls, such as modified community rating. Moreover, the ACA makes maintaining coverage more difficult for many people without employer-sponsored coverage because the law’s mandates and price controls substantially raised average premiums.

The ACA makes two types of subsidies available to people to make coverage more affordable—tax credits to reduce premiums and cost sharing subsidies to reduce deductibles and other cost sharing amounts. However, the law increased gross premiums to such a degree that these subsidies—which decline sharply as income increases—appear to make ACA insurance attractive mostly to people earning below 200% of the poverty line—an amount equal to about $23,500 for a single person and $32,000 for a two person household.

POTUS Claim: Healthcare Inflation Has Slowed

There is little evidence to suggest that the ACA has slowed healthcare inflation. Commonsense economics shows that when the government increases health insurance subsidies, dramatically expands a healthcare entitlement program (Medicaid), and adds coverage and benefit mandates on private insurance it will lead to an increase in overall healthcare spending, which will increase healthcare inflation all else equal. This point was also made recently by the Center for Medicare and Medicaid Services. The slowdown in healthcare inflation—the annual percentage growth in healthcare expenditures—began in the mid 2000s, several years before the ACA was passed. Economists have found that the primary explanation for the slowdown in private insurance was the “rapid diffusion of high-deductible health plans.” Health Savings Accounts, which are linked to high-deductible plans, were signed into law by President George W. Bush in 2003. The economists also identified “state-level efforts to control Medicaid costs and a general slowdown in the diffusion of new technology” as contributing factors to the slowdown. Since about 2008, the healthcare inflation slowdown has been a worldwide phenomenon, largely attributable to people cutting back spending because of the global recession and weak economic recovery.

The president repeatedly promised that the ACA would not just slow healthcare inflation, but would bring down family premiums by $2,500. While this is one of the best known of the president’s ACA promises, it is also among the least accurate. Over the last six years, average premiums for workplace family coverage has increased more than $4,000—from $13,375 in 2009 to $17,545 in 2015.

POTUS Claim: Nearly 18 Million People Have Gained Coverage So Far

Millions of additional people have gained coverage as a result of the ACA, although the exact number who have gained coverage because of the ACA is impossible to know because we don’t know how many people would have coverage if the ACA had not been adopted. Moreover, the key question is not how many gained coverage but whether the benefits of the coverage expansion exceed their costs.

The largest number of people newly covered have been added to the Medicaid program. About 13 million more people are enrolled in Medicaid at any point in time in 2015 than were enrolled in 2013. While some of this increase results from population growth, the vast majority is undoubtedly the result of the ACA Medicaid expansion. Importantly, a recent study by economists at MIT, Harvard and Dartmouth shows that the ACA Medicaid expansion likely makes the country worse off. The economists found “that Medicaid’s value to recipients is lower than the government’s costs of the program, and usually substantially below”—estimating that recipients only benefit by 20 to 40 cents for each dollar of spending.

As I discussed in a piece earlier this week, enrollment in the ACA exchanges is well below initial expectations. When the ACA passed, economic models from four organizations predicted that 2016 exchange enrollment would total between about 21 and 27 million people. It turns out that exchange enrollment will likely total only about half that number this year and that enrollees tend to be older, less healthy and poorer than expected.

Finally, the administration counts its estimate of the number of dependent children up to the age of 26 on their parent’s workplace insurance as part of the total number of people insured as a result of the ACA. Just this week, economists at Harvard and Stanford published a paper, estimating that dependent care mandates are associated with “an annual reduction in wages of approximately $1,200” for workers—an indication that this relatively popular ACA mandate carries significant costs.

POTUS Claim: Businesses Have Created Jobs Every Single Month Since the ACA Became Law

The president was technically correct in this claim, but making this connection to the ACA is misleading. It is virtually inevitable that job growth would increase after the deep economic recession in which millions of people were put out of work. Generally large economic recoveries follow deep economic recessions as people who lost jobs usually find new ones or return to their old ones. Comparatively, this economic recovery—which began around the time the ACA was signed into law—has been extremely weak.

In the summer of 2007, the civilian employment-population ratio—the percentage of working age labor force that is employed—equaled about 63%. By March 2010, this ratio declined to 58.5%—a decline equal to about 7 million workers. The civilian employment-population ratio has only increased to 59.5%—far below its pre-recession level.

Economic theory shows that the ACA is a negative force on the American economy and job growth. The Congressional Budget Office projects that the ACA will reduce work by an amount equal to about two million full-time jobs and will lower the nation’s economic output by about half of one percent. In Mercatus research in 2014, University of Chicago economist Casey Mulligan estimated negative effects roughly twice as large. The reduced jobs and economic growth are largely the result of the structure of the ACA’s subsidies. Since the ACA’s subsidies decline sharply as people’s incomes increase, many people, particularly lower-wage workers, are confronted with a disincentive to work more and earn additional income. In part, the negative economic effect is also attributable to the law’s taxes, including the employer mandate, which takes full effect this year and which raises the cost of workers, particularly lower-wage workers.

POTUS Failed to Mention Nation’s Greatest Fiscal Challenge: Unsustainability of Entitlement Programs

It is deeply regrettable that the president failed to address the greatest fiscal challenge facing the nation: the unsustainable trajectory of the nation’s entitlement programs. He made a single generic reference to Medicare and Social Security, stating that they should be strengthened, but offered no specifics. He made no mention of Medicaid, even though the program is now the fastest growing entitlement, costing taxpayers more than $500 billion annually.

From a fiscal and economic perspective, Washington’s failure to make structural program reforms to reduce the massive unfunded liabilities of entitlement programs during the last seven years—while adding to the problem with the ACA—will inevitably put increasing pressure on the next president and Congress to tackle these mounting problems. It is unlikely that the next Congress and president will be able to sweep these difficult challenges under the rug, as has been the case for far too long in both Republican and Democratic administrations.