A new JAMA Internal Medicine study found the Affordable Care Act led to reduced out-of-pocket spending, especially for low-income Americans. That said, many people still feel the burden of high out-of-pocket costs and premium spending.
The report also concluded medical expenses continue to “consume a large share of many families’ incomes and compound income inequities.”
The researchers warned that repealing or reversing gains made by the ACA would “especially harm poor and low-income Americans.” Premiums will likely increase for people in the exchanges if healthier people leave the exchanges, they warned.
The study looked at how the ACA affected out-of-pocket expenses and premium contributions. In a review of spending data from more than 83,000 Americans, the researchers, led by Dr. Anna L. Goldman of the Cambridge Health Alliance, found that out-of-pocket spending dropped by about 12% in the first two years after the ACA “insurance expansions.”
This was driven by Medicaid expansion and cost-sharing reduction (CSR) and premium subsidies that help lower-income people with plans in the ACA exchanges. Premium contributions also increased by 12%, mostly because of large increases in the higher-income group. Total health spending by households decreased in the Medicaid-eligible population by 16%.
Though medical expenses consume a large share of family incomes “and compound income inequities,” the study authors said there are ways to reverse that trend. The report suggested expanding Medicaid to all states, increasing CSR and premium subsidies and increasing the actuarial values of exchange plans.
Those policies don't seem likely, given Republican opposition to Medicaid expansion in many states and the party's opposition to boosting the CSR payments in Congress.
Another policy they suggested has an even less likely chance of coming to fruition.
“International experience suggests that a universal, comprehensive national health insurance program would most effectively reduce household spending and ameliorate disparities.”
The ACA remains a divisive law. The Republican Congress took multiple whacks at it last year, and did succeed in removing the law’s individual mandate penalty.
Meanwhile, President Donald Trump is working to weaken the program. Trump has made no attempt to hide his desire to sabotage the law, including the allowance of states to sidestep the law’s 10 essential health benefits and expanding short-term catastrophic plans and association health plans.
Another piece of the ACA remains up in the air — the CSR payments to insurers. The payments help contain out-of-pocket costs for lower-income people in the ACA exchanges. Trump stopped the payments last year, though some in Congress have since discussed proposals to fund the payments. It’s still a question whether Congress will agree to pay the CSR subsidies.
At the same time, some experts say the CSR payments aren’t as critical for payers as previously believed. In fact, Goldman Sachs, S&P Global Ratings and A.M. Best all recently predicted that payers will exceed previous expectations in the ACA exchanges in 2018.
A.M. Best said most payers already received a large portion of their CSR payments for the year and many state regulators allowed plans "to adjust premium rates prior to the open enrollment to avoid a potential negative financial impact.”