Although the Affordable Care Act succeeded in its goal of expanding the percentage of Americans with health insurance coverage, it did not remove the possibility of prohibitively high out-of-pocket and premium costs. A study by the Commonwealth Fund found that significant reductions in combined out-of-pocket and premium costs were realized by residents of states where marketplace enrollment increased the most. The study concluded that the net effect of the ACA’s marketplace subsidies, cost-sharing reductions, out-of-pocket protections, and rating changes has been to reduce the number of people facing substantial costs.
The study was conducted in part in response to speculation that out-of-pocket spending on health care services or insurance premiums would increase, on average, because of the ACA’s individual mandate. The analysis, which had controls for Medicaid expansion and other factors such as year and state of residence, focused on three income groups:
people living between 133 percent and 249 percent of the federal poverty level (FPL), who are eligible for cost-sharing reductions and premium subsidies in the marketplaces;
those between 250 percent and 399 percent of FPL, who are eligible for premium subsidies but not cost-sharing reductions; and
those at 400 percent of FPL and above, who are ineligible for cost-sharing reductions and premium subsidies.
The researchers noted that, in any given year, health care spending is concentrated among a small number of people. Prior to the implementation of the ACA’s marketplaces, about 31 percent of Americans with incomes above 133 percent FPL spent $500 or more on out-of-pocket cost-sharing expenses in 2013, while relatively few people—less than 3 percent in any income group—incurred out-of-pocket cost-sharing expenses as high as $5,000. Between 2013 and 2014, when the marketplaces began providing health insurance coverage and the connected subsidies and reductions, the share of Americans with incomes above 133 percent of FPL who spent more than $500 out-of-pocket on cost-sharing expensesdeclined by about 2.3 points.
There were also small reductions in the percentage of individuals who spent more than $2,000—a 0.3-point reduction, concentrated among those with lower incomes—and those who spent more than $5,000—a 0.2 percentage point reduction. The individuals incurring total out-of-pocket expenses exceeding $5,000, which is about 10 percent of income for the median U.S. family, was still almost 11 percent of the sample, showing that many Americans continue to find that premiums and cost-sharing impose a large burden that makes it difficult to access care.
Companies: The Commonwealth Fund
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