Obamacare spared some families from medical financial catastrophe

[May 10, 2017] By Ronnie Cohen

(Reuters Health) - Americans who bought health insurance on their own or in government marketplaces were less likely to go broke from the strain of medical costs under Obamacare than before the law took effect.

A study published in Health Affairs this week found a nearly 7 percent drop in the number of consumers under age 65 with non-group health insurance who experienced a qualified “medical financial burden” between 2013 and 2015.

The authors defined a qualified burden as when a family spends more than 10 percent of its annual income on health insurance and medical costs.

Obamacare, known formally as the Affordable Care Act (ACA), was signed into law in 2010 and fully implemented in 2014. It is under attack in the U.S. Congress, where the House of Representatives has approved a bill to repeal major parts of the law and replace it with a Republican healthcare plan.

“Overall, the data provide a pretty clear signal that nonelderly people with non-group health insurance coverage did experience financial relief after the implementation of the ACA,” lead author Michel Boudreaux said in a phone interview.

He urged lawmakers to consider his study’s findings before deciding the future of healthcare.

Boudreaux, a professor of health-services administration at the University of Maryland in College Park, and his colleagues examined nationally representative survey data for more than 450,000 people in families in which everyone was under age 65.

In the non-group market - that is, people who purchased health insurance and did not get it from an employer or the government - the medical financial burden rate fell 6.7 percent from 2013 to 2015, after adjusting for other factors, the study found.

Among Americans eligible for government health-insurance subsidies, the medical financial burden rate fell 10 percent, the study found.

In 2013, families without group coverage spent an average of $7,835 on health insurance premiums and medical care. By 2015, the average cost dropped 10 percent to $7,024.

Despite the reductions, however, more than one-third of those with non-group health insurance still lived in families shouldering a medical financial burden in 2015, the authors write.

Laura Wherry, professor at the David Geffen School of Medicine at the University of California, Los Angeles, said she was encouraged by the study’s findings. But she remains concerned that people who buy insurance privately or through government exchanges still are struggling to pay for coverage and medical costs.

“This study suggests that individuals in the non-group market are better off as a result of the ACA but that they remain particularly vulnerable to experiencing substantial financial burden associated with insurance and medical care,” she said in an email.

The U.S. Senate is now considering whether to repeal Obamacare and replace it with the American Health Care Act.

“Any changes to the ACA that would allow insurers to cut covered services or charge higher premiums for individuals with pre-existing health conditions are certain to increase this financial burden and ultimately make care unaffordable for those with significant medical needs,” Wherry said.

The ACA prevents insurers from charging higher rates for people with so-called pre-existing conditions, a common practice before its implementation. It also requires insurers to cover 10 essential health benefits, such as maternity care and prescription drugs.

The Republican bill passed on Thursday would allow states to opt out of those provisions. While insurers could not deny people insurance because of pre-existing conditions, they would be allowed to charge as much as they want.

As lawmakers consider the fate of Obamacare, health-policy analysts and economists are beginning to release findings of examinations into the successes and failures of former President Barack Obama’s signature domestic achievement.

A Consumer Reports investigation concluded this week that Obamacare slashed personal bankruptcies by 50 percent. (http://ti.me/2q0xy5O)

“Although courts never ask people to declare why they’re filing, many bankruptcy and legal experts agree that medical bills had been a leading cause of personal bankruptcy before public healthcare coverage expanded under the ACA,” the report says.

Improvements to the economy and changes to bankruptcy laws also would have contributed to the reduction in filings, the report says. But, the author adds, experts “almost all agreed that expanded health coverage played a major role in the marked, recent decline.”

SOURCE: http://bit.ly/2poNXBo Health Affairs, online May 2, 2017.

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