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ACA still leaves many exposed to catastrophic health expenditures

March 2, 2020

Topics: Quote of the Day

By Charles Liu, MD, MS; Yusuke Tsugawa, MD, PhD; Thomas G. Weiser, MD, MPH; John W. Scott, MD, MPH; David A. Spain, MD; Melinda Maggard-Gibbons, MD, MSHS
JAMA Network Open, February 28, 2020

Abstract

Importance: Trauma is an expensive and unpredictable source of out-of-pocket spending for American families. The Patient Protection and Affordable Care Act (ACA) sought to improve financial protection by expanding health insurance coverage, but its association with health care spending for patients with traumatic injury remains largely unknown.

Objective: To evaluate the association of ACA implementation with out-of-pocket spending, premiums, and catastrophic health expenditures (CHE) among adult patients with traumatic injury.

Design, Setting, and Participants: Data from a nationally representative sample of US adults aged 19 to 64 years who had a hospital stay or emergency department visit for a traumatic injury from January 2010 to December 2017 were analyzed using the Medical Expenditure Panel Survey. Multivariable generalized linear models were used to evaluate changes in spending after ACA implementation. Additionally, 4 income subgroups were evaluated based on ACA thresholds for program eligibility: lowest-income patients (earning 138% or less of the federal poverty level [FPL]), low-income patients (earning 139% to 250% of the FPL), middle-income patients (earning 251% to 400% of the FPL), and high-income patients (earning more than 400% of the FPL). Data were analyzed from February to December 2019.

Exposures: Implementation of the ACA, beginning January 1, 2014.

Main Outcomes and Measures: Out-of-pocket spending, premium spending, out-of-pocket plus premium spending, and likelihood of experiencing CHE, defined as out-of-pocket plus premium spending exceeding 19.5% of family income.

Results: Of the 6288 included patients, 2995 (weighted percentage, 51.3%) were male, and the mean (SD) age was 41.4 (12.8) years. Implementation of the ACA was associated with 31% lower odds of CHE (adjusted odds ratio, 0.69; 95% CI, 0.54 to 0.87; P = .002). Changes were greatest in lowest-income patients, who experienced 30% lower out-of-pocket spending (adjusted percentage change, −30.4%; 95% CI, −46.6% to −9.4%; P = .01), 26% lower out-of-pocket plus premium spending (adjusted percentage change, −26.3%; 95% CI, −41.0% to −8.1%; P = .01), and 39% lower odds of CHE (adjusted odds ratio, 0.61; 95% CI, 0.44 to 0.84; P = .002). Low-income patients experienced decreased out-of-pocket spending and out-of-pocket plus premium spending but no changes in CHE, while middle-income and high-income patients experienced no significant changes in any spending outcome. In the post-ACA period, 1 in 11 of all patients with traumatic injury and 1 in 5 with the lowest incomes continued to experience CHE each year.

Conclusions and Relevance: Implementation of the ACA was associated with improved financial protection for US adults with traumatic injury, especially lowest-income individuals targeted by the law’s Medicaid expansions. Despite these gains, injured patients remain at risk of financial strain.

From the Discussion

Using nationally representative data, we found that implementation of the ACA in January 2014 was associated with decreased out-of-pocket spending among low-income US adults with traumatic injuries who were eligible for the policy’s Medicaid expansions and Marketplace subsidies. Implementation of the ACA was also associated with decreased odds of experiencing CHE, especially for the lowest-income patients earning 138% or less of the FPL. The decreases in spending were substantial in magnitude, ranging from an 18% decrease in out-of-pocket plus premium spending among low-income patients to a 30% decrease in out-of-pocket spending among lowest-income patients. Notably, these improvements in financial protection were not seen in middle-income adults eligible only for premium subsidies or high-income individuals ineligible for subsidies. Furthermore, our findings illustrate that strikingly high rates of CHE persist among patients with traumatic injury in the post-ACA period.

We did not observe decreases in CHE among low-income and middle-income patients despite their eligibility for ACA Marketplace subsidies, which may be because of several reasons. First, these groups had higher rates of insurance coverage before implementation of the ACA than the lowest-income subgroup, so gains in insurance coverage following ACA implementation were correspondingly smaller. Second, Marketplace (and private non-Marketplace) insurance plans have higher copayments and deductibles than Medicaid, and states are permitted to charge premiums to Medicaid beneficiaries earning more than 150% of the FPL, so the types of coverage gained by these subgroups did not lower spending as much. Third, because of lower ACA subsidies and higher income, middle-income individuals in particular may have tended to purchase less generous Marketplace plans, exposing them to higher out-of-pocket costs in the event of trauma. For example, during the 2018 Marketplace open enrollment period, individuals earning 100% to 250% of the FPL selected silver-tier or gold-tier plans over bronze-tier plans 82% to 18%, while those earning 251% to 400% of the FPL selected bronze-tier plans over silver-tier or gold-tier plans 51% to 49%. (Platinum and catastrophic plan enrollment was not released in these data.) Fourth, low-income and middle-income patients in our study had employer-sponsored insurance more often (40% and 66%, respectively) than the lowest-income patients (9%). Underinsurance has grown substantially among Americans with employer-sponsored insurance over the past 15 years, possibly blunting gains in financial protection from ACA-related increases in Medicaid and Marketplace coverage.

Finally, we found that even after ACA implementation, nearly 1 in 11 of all US patients with trauma and 1 in 5 with incomes of 138% or less of the FPL continued to experience catastrophic health care spending. Among patients experiencing CHE in the post-ACA period, one-fifth remained residually uninsured, and nearly three-fourths were insured (half with private insurance and one-quarter with Medicaid) but continued to experience CHE, indicating that they are underinsured. This may be because of variable implementation of the ACA in different states, lack of awareness of program eligibility, or plan-specific factors, such as out-of-network billing. There remains a critical need for policy solutions to address this crisis of affordability among low-income patients struggling with the dual misfortunes of traumatic injury and high-burden health care costs.

https://jamanetwork.com…


Comment:

By Don McCanne, M.D.

Although this study confirmed that “Implementation of the ACA was associated with improved financial protection for US adults with traumatic injury, especially lowest-income individuals targeted by the law’s Medicaid expansions,” the authors also found that “these improvements in financial protection were not seen in middle-income adults eligible only for premium subsidies or high-income individuals ineligible for subsidies. Furthermore, our findings illustrate that strikingly high rates of CHE (catastrophic health expenditures) persist among patients with traumatic injury in the post-ACA period.”

Further, “Among patients experiencing CHE in the post-ACA period, one-fifth remained residually uninsured, and nearly three-fourths were insured (half with private insurance and one-quarter with Medicaid) but continued to experience CHE, indicating that they are underinsured.”

Single payer Medicare for All would eliminate uninsurance and underinsurance. Yet many politicians reject this model of reform in preference for us being allowed to keep the insurance we have in spite of the fact that tweaking the current system and adding a public option will increase health care spending while still falling far short on the goals of reform. In contrast, single payer Medicare for All would reduce total health care spending while meeting the goals of universality, comprehensiveness, affordability, accessibility, and choice of health care professionals in a system that is equitable for all.

It’s past time to quit celebrating an overpriced system that isn’t working for far too many of us and get to work establishing what would be the premier system in all the world – the single payer model of an improved Medicare for All.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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