How Obamacare Has Lowered Your Out-of-Pocket Expenses

Experts say the Affordable Care Act has slowed the increases in what people pay for prescription drugs and other healthcare services. Aleksandar Nakic/Getty Images

Researchers say the Affordable Care Act has helped ease the out-of-pock…

Experts say the Affordable Care Act has slowed the increases in what people pay for prescription drugs and other healthcare services. Aleksandar Nakic/Getty Images
  • Researchers say the Affordable Care Act has helped ease the out-of-pocket expenses for healthcare services.
  • Prescription drug prices are among the medical expenses that have been substantially affected.
  • Experts note that the expansion of Medicaid programs has also helped.

The Affordable Care Act (ACA), also known as Obamacare, has substantially increased health insurance coverage in the United States.

It also seems to have helped reduce the amount of money Americans have had to pull out of their wallet to pay for healthcare, a new study finds. 

Dr. Sara Collins, vice president for healthcare coverage and access at The Commonwealth Fund, which studies the ACA and other health policy, told Healthline that the findings are a “partial success story” for the healthcare reform bill championed by former President Barack Obama.

“The ACA did reduce out-of-pocket expenses, but the data still show that they still are increasing every year, so work still needs to be done” to stop insurers from keeping healthcare premium growth lower by raising deductibles, said Collins.

Limiting out-of-pocket health expenses was one of the major goals of the ACA, which was enacted in 2010.

To see how effective the law was in achieving that goal, researchers from the Johns Hopkins University School of Medicine in Baltimore, Maryland, looked at 2 decades worth of data on healthcare expenses.

They focused on expenses known to be more frequently paid by patients rather than insurers. These included physician services, dental services, nonprescription medications, and prescription medications.

In the study, published in the Journal of the American Medical Association, researchers reported that while per capita out-of-pocket healthcare spending increased between 2000 and 2018 from $1,028 to $1,148, the average annual growth rate of such spending significantly decreased following passage of the ACA.

And while total per capita health expenditures increased from $6,649 to $10,627 in the same time period, “compared with the pre-ACA period, out of pocket spending increased at a slower rate for almost all healthcare services during the post-ACA period,” the researchers found.

“We speculate that ACA-imposed spending limits for [high-deductible health plans] account for substantial [out-of-pocket] savings,” the researchers wrote. “Furthermore, access to coverage for individuals who were previously uninsured may account for additional [out-of-pocket] savings.”

Collins said that the ACA also likely reduced out-of-pocket spending simply by giving health insurance coverage to uninsured people who otherwise would have had to cover the entire cost of care for themselves. 

Prescription drug costs

The researchers found that out-of-pocket spending on most types of healthcare slowed, and that such expenses for prescription medications “decreased rapidly from 2010 to 2018.”

“We hypothesize that the reasons for these findings include increased prevalence of prescription to nonprescription switches for medications, increased number of clinicians using nonprescription medications as first-line management, and loss of patent protection for name-brand drugs,” Dr. Amit Jain, an associate professor of orthopedic surgery at Johns Hopkins and corresponding author on the study, told Healthline. 

However, there was an increase in how much people paid for physician services since the passage of the ACA.

This is possibly due to “surprise billing” for services delivered by out-of-network doctors working in hospitals listed as being “in network” by insurers.

A law recently passed by Congress sought to address surprise billing practices.

Collins said lowering the ceiling on high-deductible health plans would be one way to further reduce out-of-pocket spending on healthcare.

Such plans, which can have annual deductibles of $10,000 or more, have proliferated since passage of the ACA, she said.

As more people with lower incomes have been made eligible for state Medicaid coverage under optional provisions of the ACA, the burden of out-of-pocket expenses has shifted to people who receive high-deductible health insurance through employers, Collins said.

Broader application of the ACA could help relieve this burden, Jain said.

“The [ACA] aimed to increase access to care. Unfortunately, not all states chose to comply, resulting in persistent inequities in access, which contribute to increasing out of pocket costs as a whole,” he said.

“A mandate to expand insurance access to previously uninsured patients across all states could help improve care access and ultimately reduce net out-of-pocket expenditures. Further, new laws that aim to limit out-of-network billing and surprise billing will further reduce out-of-pocket cost burdens for patients,” Jain said.