Higher ACA exchange enrollment limited out-of-pocket spending

The more people who purchased coverage on the Affordable Care Act’s insurance exchanges, the fewer adults spent more than $500 per year on out-of-pocket expenses.

According to the Commonwealth Fund study, by mid-2014, there was a 2 percentage point decline from the 2013 share of adults spending above that $500 threshold associated with a 2.6 percent of adults covered by a marketplace plan after the first open enrollment period.

“The probability of incurring high out-of-pocket costs and premium expenses declined as marketplace enrollment increased,” wrote Sherry Glied, PhD, dean of New York University’s Robert F. Wagner School of Public Service. “The percentage reductions were greatest among those with incomes between 250 percent and 399 percent of poverty, those who were eligible for premium subsidies, and those who previously were uninsured or had very limited non-group coverage. These effects appear largely attributable to marketplace enrollment rather than to other ACA provisions or to economic trends.”

Spending on out-of-pocket expenses appeared to be tied to the success of marketplace enrollment in certain states, with Florida, Idaho and Vermont having the greatest decline in the share of adults spending more than $2,000 annually.

While spending on expenses appeared to decrease with the opening of the exchanges, when premiums are factored into what a customer paid out-of-pocket, spending went up.

“After removing the estimated effects of marketplace enrollment, we find that the share of Americans spending over $500 on combined premiums and out-of-pocket expenses rose by about one percentage point, the share spending over $2,000 rose by 2 percentage points, and the share spending over $5,000 rose by one percentage point,” Glied and her coauthors wrote. “In separate analyses, we found that these effects were largely driven by people who had employer-sponsored coverage at some point in 2014.”