Has ACA Made Healthcare More Affordable?

Yes for some, no for others -- but affordability wasn't the law's only goal


F. Perry Wilson, MD, MSCE

The Affordable Care Act, by its very name, implies that a goal was to make healthcare more affordable. Now a study appearing in JAMA Internal Medicine suggests that, for some at least, it hasn't been achieved. In this 150-Second Analysis, F. Perry Wilson, MD, discusses the data and why "affordability" as a metric might miss the larger benefit.

The Affordable Care Act. We often discuss its impact on reducing the uninsured rate in the US healthcare system, but there's another salient question. Did the Affordable Care Act make care more affordable?

A new analysis, appearing in JAMA Internal Medicine, is the first to really quantify what has happened to individual health care spending since the ACA was put into effect.

Drawing on data from the Medical Expenditure Panel Survey, a nationally representative sample of more than 83,000 US adults, researchers led by Dr. Anna Goldman (in her first peer-reviewed publication, congratulations Dr. Goldman), determined how much individual expenses changed from the pre-ACA to the post-ACA era.

The study looked at out-of-pocket expenses and premiums and the two combined. But in a conversation with Dr. Goldman, she pointed out to me that out-of-pocket expenses might be more important when it comes to healthcare access:

"Out of pocket spending really can be – in a different way then premiums – a real barrier to care. Since it saves at the point of care."

So what happened when the ACA was introduced?

Overall, premiums went up and out-of-pocket costs went down. The net effect was that the average American family spent $28.71 less on healthcare in the two years after the ACA compared to the two-years before.

But the benefits were not evenly distributed. Families making up to 138% of the federal poverty level spent, on average $160 less on healthcare after the ACA. Families making more than 400% of the poverty level spent around $281 dollars more per year. I should note that this doesn't include the added cost of some ACA-associated taxes that affected higher income earners.

These numbers may not seem that impressive, but consider two factors. First, healthcare expenditures had been increasing in the run-up to the ACA, so even a modest decrease is somewhat encouraging. Second, even if there were no changes in healthcare spending, 6.5% more of the US population became insured in the two years after the ACA.

So did the Affordable Care Act make care more affordable? For some people, yes, but perhaps that's not the main point.

Dr. Goldman again:

"Even though it was called the Affordable Care Act, its major intervention was to expand insurance coverage. Experts in the field who I've spoken to about this take issue with the idea that it should even be expected to make care more affordable."

Is "affordability" even the right metric for healthcare? I'm not sure. The effect of the ACA should be measured not in terms of cost, but value – the outcomes achieved for the cost. In other words, this paper gives us the denominator. We'll need more time before Information on the numerator, particularly any long-term health outcomes, can be put into the equation.
