As enrollment in the Affordable Care Act’s (ACA) new health care markets, or exchanges as they are also known, begins, much of the debate over the law is focused on insurance: Who will get coverage? How much will premiums cost? Should our state expand Medicaid? Yet health insurance is not an end in itself.
The point of insurance is to help people get the health care they need at prices they can afford and, in the event of serious injury or accident, to protect them from catastrophically high medical bills. What often gets lost in the debate is how the new law will affect Americans’ ability to buy health care.
While relatively little will change for most people who already get their insurance through employers, an estimated 49 million Americans will be affected by the new law, either becoming newly insured or changing their source of coverage. How will these changes affect consumer health care spending? Will the Affordable Care Act live up to its name?
Of course, ultimately only time and experience will tell. But in the meantime, the law is being implemented, and policymakers and consumers confronting the new health care market are seeking answers about the law’s likely impact, beyond politicized charges and countercharges about whether it will succeed.
Using the COMPARE microsimulation model, my RAND colleagues and I examined how the ACA will affect spending by consumers who are insured for the first time or who change coverage as a result of the law. Specifically, we looked at out-of-pocket spending (spending at the point of sale — copays, deductibles, and coinsurance, which is the fraction of spending not covered by insurance); total spending on health care, which includes out-of-pocket spending plus insurance premiums; and consumers’ risk of high medical care costs.
The analysis focused on 2016, the first year in which penalties for not complying with the individual mandate will be fully in effect, and considered two scenarios: one in which the ACA is fully in place and another that estimates outcomes without the ACA.
