Out-of-pocket spending increases have slowed under ACA
Slowed, but not stopped: per capita out-of-pocket spending increased from $1,028 to $1,148 between 2000 and 2018.
Out-of-pocket spending for nearly all health care services has increased at a slower rate since the passage of the Affordable Care Act in 2010.
A new study reported by the JAMA Open Network analyzed trends in out-of-pocket spending over the past two decades, both before and after the ACA was enacted. Per capita out-of-pocket spending increased from $1,028 to $1,148 between 2000 and 2018. The average annual growth rate was 3.4% before and 1.9% after the ACA was passed. Total per capita health expenditures increased from $6,649 to $10,627 during the same period.
Although tax legislation in 2003 encouraged employers to provide high-deductible health plans to employees, they didn’t reduce out-of-pocket spending because of the high upfront cost of care. The ACA implemented out-of-pocket spending maximums and increased access to preventive care services, which may have counteracted high out-of-pocket spending in high-deductible plans. However, ACA-mandated price ceilings still are significant ($7,900 in 2019), which may explain why out-of-pocket spending still is increasing annually.
“We speculate that ACA-imposed spending limits for high-deductible health plans account for substantial out-of-pocket savings,” the report said. “Furthermore, access to coverage for individuals who were previously uninsured may account for additional out-of-pocket savings.”
Average annual growth rates for out-of-pocket health expenses have increased for physician services since the introduction of the ACA, possibly because of increased use of out-of-network care. At in-network hospitals, some services provided by anesthesiologists, pathologists or assistant surgeons were billed as out-of-network services, with patients held responsible for additional costs. These costs may come under control with the recent passage of federal legislation to limit surprise billing.
Out-of-pocket health expenses for prescription medications decreased rapidly from 2010 to 2018. The reasons may include increased prevalence of transitions from prescription to nonprescription medications, increased number of clinicians using nonprescription medications as first-line management, loss of patent protection for name-brand drugs and increased use of prior authorization for prescriptions.
“Although the ACA may provide a partial explanation for out-of-pocket spending trends, we cannot definitively attribute these changes to the ACA alone,” the report concluded. “Coinciding economic events, such as the great recession, likely decreased consumer willingness to pay out of pocket for health-related costs. In the current study, we were unable to determine whether these decrease were secondary to disproportionately high rate of baby boomers becoming eligible for Medicare.
“Moreover, savings in out-of-pocket health spending may be nullified by increased taxpayer spending on Medicaid. Access to coverage for individuals who were previously uninsured through Medicaid expansion my account for the greatest out-of-pocket savings.”
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