Study: ACA will reduce costs for many

The share of Americans with high medical costs increased prior to the implementation of the Affordable Care Act (ACA), according to a new report from The Commonwealth Fund.

The percentage of consumers who spend more than 10% of their family income on out-of-pocket healthcare expenses rose to 19.2% in 2011, compared to 18.2% from 2007 through 2009, the report found. And medical cost burdens were highest for people with private nongroup insurance coverage, who are among those most likely to benefit from the ACA’s coverage expansions.

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“[M]any people with nongroup coverage before 2014 will be able to dramatically lower their health insurance and healthcare spending through the marketplaces,” researcher Peter Cunningham wrote in the report. Just over half of people with nongroup coverage in 2009–2011 had family incomes at or under 400% of the federal poverty level, making them potentially eligible for the marketplaces’ premium subsidies, and a substantial reduction in their cost burden. 

The Commonwealth Fund also found that out-of-pocket spending on prescription drugs fell from $203 to $172 per person from 2007-2009 and 2011, driven mainly by a shift from brand-name medications to les- expensive generics. “Many new generics became available during the 2009–2011 period, including drugs to treat attention deficit hyperactivity disorder, schizophrenia, depression, and early-stage breast cancer,” the report stated.

Medical costs were highest for people with nongroup private insurance. In 2011, 48% of Americans with this kind of coverage had a high-cost burden, and spending on premiums by people with nongroup coverage averaged $5,799.

Still, the average spending on premiums by people with employer coverage rose from $2,592 in 2007 through 2009 to $2,838 in 2011.