Did the Affordable Care Act Lower Financial Barriers to Health Care?

The Issue

The Affordable Care Act (ACA) was designed to ensure that Americans can afford health insurance coverage and are financially protected against potentially high health care costs. This required addressing two connected problems: the cost barriers to accessing coverage and care and the comprehensive risk protection provided by insurance, particularly for people in danger of high spending. To do this, the ACA expanded insurance coverage in several ways and developed new federal rules for both the individual and group insurance markets. In a recent article in Health Affairs commemorating the 10th anniversary of the passage of the law, Sherry Glied of New York University, the Commonwealth Fund’s Sara Collins, and Saunders Lin of Oregon Health and Science University reviewed evidence on whether it has been effective in achieving its goals.

Effectiveness of ACA in Lowering Financial Barriers to Care

• Coverage expansions. The ACA extended access to coverage through increased Medicaid eligibility, tax credits for people who met certain income criteria to purchase coverage through new marketplaces, and employer-based coverage provisions that allowed young adults up to age 26 to remain on their parents’ policies. These coverage expansions reduced the uninsured rate, improved access to care, and lowered out-of-pocket spending.

• Insurance market reforms. The ACA established ground rules for insurers and required all plans to cover a set of essential health benefits. For example, insurers could no longer exclude people with preexisting conditions from coverage. Insurers also were required to pool their enrollees into a single risk pool, which eliminated the previous practice of setting higher premiums for less-healthy enrollees. The ACA also lowered out-of-pocket costs for people with the highest spending by eliminating annual and lifetime benefit limits.

The Big Picture

A review of the research literature on the effects of the ACA indicates that the law helped protect Americans against the financial risks of illness, reduced the uninsured rate, improved access to care, and lowered out-of-pocket spending. But subsequent court decisions, along with congressional and executive branch actions, have limited the ACA’s reach. Congress and the Trump administration also have chipped away at the law’s market reforms. Texas v. United States, which is headed to the Supreme Court, contests the constitutionality of the law.

The Bottom Line

The ACA made significant gains in improving coverage and access and protecting Americans against the financial risks of illness, but court decisions and congressional and executive branch actions threaten to erode that progress.