Has the Affordable Care Act made health care more affordable to consumers?
In May, the CDC announced the uninsured rate had fallen to a record 9.1 percent, meaning more Americans than ever before now have some form of health coverage. 20 million consumers get health insurance through the Affordable Care Act. But, the question of affordability still lingers as consumers continue to speak out about high deductibles and care that is out of reach.
Given the various subsidies and programs impacted by the ACA as well as the diverse consumer base, there isn’t a single, simple answer to the question of affordability in the ACA. But, some general conclusions are possible.
Affordability is not a major concern for participants in Medicaid, which was expanded under the ACA to cover households with income below 138 percent of the federal poverty level. Except for some incidental costs, Medicaid is free to its enrollees. A recent University of Michigan/Chicago Federal Reserve Bank study found that new Medicaid participants had reduced their collection balances by $600 to $1,000 each.
Premiums and Deductibles in the ACA Exchanges
Tax subsidies to participate in ACA health insurance exchanges are available to households with incomes up to 400 percent of the federal poverty level. The subsidies are aimed primarily at reducing premiums.
For individuals and families buying private insurance on the exchanges, affordability has become a more complicated issue, driven by deductibles that must be met before insurance kicks in. For 2016, the maximum out-of-pocket limit is $6,850 for single coverage and $13,700 for family coverage.
Two out of five adults in employer or private plans said it was difficult or impossible to meet their deductible, according to a 2015 Commonwealth Fund tracking poll. A recent National Bureau of Economic Research study showed that high deductible plans bought by relatively high income households led to a 10 percent drop in preventive care and an 18 percent drop in doctor visits, with the greatest reductions occurring in the sickest patients.
Another factor in affordability is the use of narrow provider networks by insurance companies that participate in the ACA exchanges. Payments made to out of network providers do not apply to deductibles, and frequently there is no limit on out of pocket charges. A Kaiser Family Foundation study found that among adults struggling with medical bills charges from out-of-network providers were a contributing factor about one-third of the time.
We asked our experts if the ACA works for consumers, and if changes are needed to enhance its affordability.
Neeraj Sood, Ph.D. says though millions of Americans now have insurance, the plans do not necessarily mean improved access to health care:
“The Affordable Care Act has made health insurance more affordable by providing government subsidies to low- and middle- income families. As a result, millions of Americans now have insurance but these affordable insurance plans are not all that good –the plans require patients to pay a lot out-of-pocket and don't cover the doctors they want to see. We need to do more than just pay the health insurance bills for low-income households. We need to lower their total health care bill by improving the delivery and financing of health care in America.”
EXPERTS ON AFFORDABLE CARE ACT
Neeraj Sood, Ph.D.
Director of Research,
Vice Dean for Research,
Sol Price School of Public Policy
School of Pharmacy
Dana Goldman, Ph.D.
Leonard D. Schaeffer Director's Chair, Schaeffer Center
Distinguished Professor of Public Policy, Pharmacy, & Economics at School of Pharmacy & Sol Price School of Public Policy