High-Burden Health Spending Declined Among Individual-Market Participants and Medicare Beneficiaries Under the ACA

Colin Planalp, Research Fellow, State Health Access Data Assistance Center

April 27, 2017
Colin Planalp
Colin Planalp

A new analysis from the State Health Access Data Assistance Center (SHADAC) shows a statistically significant decline in high-burden health care spending among people with individual-market coverage since the 2014 implementation of the Affordable Care Act (ACA). These and other findings are described in a new brief, funded by the California Health Care Foundation, that examines changes in state and national measures of financial burden and cost-related barriers to care since implementation of the ACA.

Between 2013 and 2015, there was a statistically significant 5.9 percentage point decline (from 44.7% to 38.8%) in the US rate of people with individual-market coverage who reported spending more than 10% of family income on out-of-pocket health costs. This includes spending such as insurance premiums, deductibles, copays, and spending on prescription drugs. Average out-of-pocket spending among people with individual-market coverage also declined significantly over the same period from $6,831 to $5,508.

Five states experienced statistically significant declines (see table) in high-burden spending for people with individual-market coverage (Oklahoma was the only state to see a significant increase.) These improvements likely resulted from the ACA's financial assistance designed to make individual-market health insurance more affordable, such as advanced premium tax credits to reduce monthly premiums and cost-sharing subsidies to reduce people's spending on deductibles, copays, and certain other costs.

Statistically Significant Changes in Individual-Market High-Burden Health Spending, 2013 and 2015 (all ages)

These changes are positive, and it will be important to continue tracking high-burden spending among people with individual-market coverage to see whether the improvements continue. Because the American Health Care Act (AHCA) — a bill to repeal and replace some parts of the ACA — was never brought to a vote in March 2017, the ACA's advanced premium tax credits are expected to continue as currently implemented, at least in the near term. However, there is no assurance that high-burden health spending will continue to decline, or even that the current reductions will be maintained. A pending lawsuit could result in the cancellation of cost-sharing subsidies, which would increase out-of-pocket costs for some lower-income people with individual-market coverage, and other proposals to reduce or eliminate premium tax credits could resurface in the future.

In addition to people with individual-market coverage, other groups also saw statistically significant reductions in rates of high-burden health spending. There was a 7.3 percentage point decline in high-burden health spending among US Medicare beneficiaries, from 33.6% in 2013 to 26.4% in 2015. At the same time, 24 states experienced statistically significant declines in rates of high-burden spending among Medicare beneficiaries. Other evidence suggests those improvements may be the result of the ACA provision closing the Medicare Part D prescription drug "donut hole." According to the US Centers for Medicare & Medicaid Services, in 2015 Medicare beneficiaries, on average, saved $1,054 because of this ACA policy (PDF). Because the ACA gradually closes the donut hole until the gap is eliminated in 2020, it also will be important to continue monitoring high-burden spending to assess whether Medicare beneficiaries continue to see reductions.

Statistically Significant Changes in Medicare High-Burden Spending, 2013-2015 (all ages)

The analysis also found a statistically significant decline of 1.5 percentage points (from 28.0% in 2013 to 26.5% in 2015) in the US rate of high-burden spending among people with incomes up to 400% of federal poverty guidelines (FPG). This includes people eligible for the ACA's Medicaid expansion (up to 138% FPG) and people eligible for financial assistance to make individual-market coverage more affordable (139% to 400% FPG in Medicaid expansion states, and 100% to 400% FPG in non-expansion states). In contrast, rates of high-burden spending remained unchanged at 11.9% for people with incomes above 400% FPG, who weren't eligible for the ACA's Medicaid expansion or financial assistance.

Other findings described in the brief include statistically significant declines in US rates of trouble paying medical bills and declines in rates of delayed and forgone care due to cost. Of the 6 states with significant changes in trouble paying medical bills, 5 saw improvements (California, Georgia, Montana, New Hampshire, North Dakota), while the share of Iowans reporting trouble paying medical bills increased. Of the 11 states with significant changes in delayed medical care due to cost, 9 saw improvements, and among the 15 states with significant changes in forgone care due to cost, 13 saw improvements.

Statistically Significant Changes in Rates of People Needing but Delaying Care Due to Cost, 2013-2015 (age 0-64)

Statistically Significant Changes in Rates of People Needing but Going Without Care Due to Cost, 2013-2015 (age 0-64)

Overall, these findings suggest that the ACA may have reduced high-burden health care costs for individuals and families, especially for certain groups targeted by the law, such as people with individual-market coverage. Additionally, while few states experienced statistically significant changes, the significant changes in delayed and forgone care due to cost at the national level suggest the ACA may be reducing cost-related barriers to care for some people.

This article first appeared April 24 on the SHADAC Blog.