Health Affairs article finds ACA saves individual market consumers significant out-of-pocket costs
Posted on May 17, 2012 | No Comments
According to an article recently published in Health Affairs, if the Affordable Care Act (ACA) had been in place in 2001-2008, people in the individual insurance market would have saved about $280 per year on out-of-pocket costs. These savings would have been even more significant for people aged 55-64, as this age group racks up higher medical bills, but is still ineligible for Medicare.
The root of the savings under the ACA is in the creation of the new health insurance exchanges, which make coverage more accessible for consumers in the individual market. Plans distributed through exchanges must cover essential health benefits, which include benefits such as prescription drugs and certain preventive services without copayments. The essential health benefit requirement in the exchanges will make the individual policies more generous and will create significant annual out-of-pocket savings for consumers. In addition, the study reports that the ACA reduces the risk of incurring high out-of-pocket costs. The likelihood of having out-of-pocket expenditures on care exceeding $6,000 would have been reduced for all adults with individual insurance, and the likelihood of having expenditures exceeding $4,000 would have been reduced for many.
- There was high turnover in the market;
- 80% of those in the market acquired another form of coverage within in the year, mainly from an employer; and
- turnover varied among groups (age, employment status, etc.)
- changes in available insurance options;
- how the plan member's current plan deviates from the market reforms instituted by the ACA (i.e. no coverage of individuals with pre-existing conditions, no guaranteed issuance, etc.);
- the right and ability of a plan member to enroll in a plan through the ACA's health insurance marketplaces;
- how a plan member may enroll in a new plan through the ACA marketplaces; and
- the ability of the plan member to enroll in another plan outside of the marketplaces that adheres to ACA market reforms.