Impact of the Affordable Care Act (Obamacare) in the United States (2009-2017)

Effect of the Affordable Care Act
Overview of the Affordable Care Act
The ACA in other states
Affordable Care Act glossary
Medicaid • Obamacare lawsuits • Republican effort to repeal the ACA
The data on this page was the most current data available as of October 2017.

The impact of the Affordable Care Act of 2010 (ACA), also known as Obamacare, was debated among politicians, policymakers, and other stakeholders. The ACA was signed into law in 2010 by President Barack Obama (D). The law facilitated the purchase of health insurance through a system of health insurance exchanges, tax credits, and subsidies. Initially, states were required to expand eligibility for Medicaid under the law; a 2012 ruling by the United States Supreme Court made the Medicaid expansion voluntary for states. The law also required insurers to cover healthcare services within a standard set of benefits and prohibits coverage denials based on preexisting conditions. Under the law, all individuals were required to obtain health insurance.

This article presents data that researchers collected and analyzed, as well as reports they released based on that data, as they attempted to understand the ACA's impact. See the following sections for more information:

1. Health insurance: This section provides information on health insurance coverage overall, enrollment in Medicaid, and enrollment through the health insurance exchanges.
2. Consumer costs: This section provides information on the average premiums and deductibles paid by consumers.
3. Government spending: This section provides information on federal and state spending for Medicaid, tax credits and subsidies, and uncompensated care costs.
4. Market reactions: This section provides information on health insurer participation in the exchanges, narrow networks, and direct primary care.
   
   

For more information about the Affordable Care Act, click here.

Health insurance[edit]

Insurance coverage overall[edit]

Following the passage of the Affordable Care Act (ACA) in 2010, the nation as a whole saw a decline in the number of individuals without health insurance, particularly following the first open enrollment period for the health insurance exchanges in 2013 and the first state Medicaid expansions in 2014. According to the Census Bureau, between 2013 and 2014, the number of uninsured individuals declined by 18.8%, from 45 million to 36.7 million people. The uninsured rate was 16.3% in 2010, 14.5% in 2013, and 11.7% in 2014. By 2016, about 8.6% of the country lacked health insurance.^[1][2][3]

In 2016, about 27.3 million individuals in the United States were uninsured. The line graph below displays the percentage of the United States population that lacked health insurance for each year between 2004 and 2016—six years before and after the Affordable Care Act. These figures are compared with Massachusetts and Texas, the states with the lowest and highest percentages of uninsured individuals, respectively. Hover over the lines to view the data points; the solid line represents the United States while the pink dotted line represents Massachusetts and the gray dotted line represents Texas. The table below the graph displays figures on the uninsured population for the years 2013 and 2016 in the United States, Massachusetts, and Texas.

The Affordable Care Act expanded insurance coverage primarily in two ways: by expanding eligibility for state Medicaid programs and by providing tax credits for people to purchase private insurance. The RAND Corporation described the gains in coverage between 2013 and 2015 in the following way:

Click to view a larger version.

The law also provided for the establishment of small business insurance exchanges, called Small Business Health Options Program Marketplaces, or SHOPs. The launch of the federal online website for SHOPs was delayed by one year, from November 2013 to November 2014. As of July 2015, 85,000 Americans were insured through a SHOP. According to data analyst and blogger Charles Gaba, who ran the website ACASignups.net, the federal government did not include SHOP enrollment in its official ACA enrollment reports.^[6][7][8][9]

Medicaid expansion[edit]

The provision for expanding Medicaid went into effect nationwide in 2014. As of September 2017, Medicaid expansion had been approved in 31 states. Of these states, six had obtained a waiver from the Centers for Medicare and Medicaid Services (CMS) to expand via an alternative method, such as assisting low-income individuals with paying premiums for private insurance. Nineteen states had not expanded Medicaid at that time.^[13]

Even if a state did not expand Medicaid, it could have seen an increase in enrollment in the program due to the ACA's requirement to acquire health insurance. In fiscal year 2015, annual Medicaid enrollment in the United States increased by 14.6%, compared to 9.5% in 2014 and 2.1% in 2013.^[14][15]

Nationwide, average monthly Medicaid enrollment amounted to about 75 million in May 2017. Before the Affordable Care Act, average monthly enrollment amounted to 58.6 million, according to the Kaiser Family Foundation. This represented a difference of 30.2%.^[13][16]

Health insurance exchanges[edit]

Nationwide, enrollment in plans offered on the exchange amounted to about 10.3 million in 2017. Of individuals enrolled, 84% were eligible for premium tax credits, which averaged $371 per month. In addition, 57% were eligible for reductions in their cost-sharing responsibilities (labled as CSRs in the graph below), meaning their plans covered more of their costs. The table below provides these figures for the United States, along with Massachusetts and Texas, the states with the lowest and highest percentage of uninsured individuals in 2017, respectively.^[17][18][19]

Co-ops[edit]

The Affordable Care Act also created a new type of nonprofit health insurance company to offer insurance on the exchanges: the Consumer Operated and Oriented Plan, or co-op. The law stipulated that no representative from an insurance company or association could serve on a co-op board and that no co-op could accept outside investor funding. Co-ops were also required to sell most of their plans in the individual or small employer market; one-third of their plans could be offered in the large employer market. Co-ops received start-up funding through low-interest government loans; some also received solvency loans. Twenty-three co-ops were ultimately established nationwide and collectively received $2.4 billion in loans.^[20]

By the end of 2015, 12 of the 23 co-ops had closed. The closed co-ops had collectively received over $1 billion in government loans. According to HealthInsurance.org, an online guide to health insurance, over 1 million people were enrolled in co-ops during 2015 and about 500,000 were impacted by the closures at the end of the year. Individuals who had purchased insurance through these co-ops had to change insurers. Of the remaining co-ops, only one (Maine) was operating with a positive net income in 2015, thus raising the possibility that more co-ops would fail. Over the next year and a half, six more co-ops closed, and as of September 2017, four co-ops remained in operation.^[20]

For more on the co-ops and why they closed, click here.

Consumer costs[edit]

Premiums[edit]

The studies and analyses below were conducted by various organizations to examine premiums for health insurance plans in the individual market, where most of the ACA's changes took place. Different studies using similar data may find varying results due to variances in the methodologies used by the organizations conducting the studies.

2016 to 2017[edit]

The Kaiser Family Foundation (KFF) analyzed the change from 2016 to 2017 in average premiums for benchmark plans offered in major cities in each state, as estimated for a 40-year-old non-smoker earning $30,000 per year. According to KFF, premiums were "expected to increase faster in 2017 than in previous years due to a combination of factors, including substantial losses experienced by many insurers ... and the phasing out of the ACA’s reinsurance program." While the organization did not provide a nationwide average of the change in average premiums, it did note the states with the largest and smallest changes:^[21]

The table below provides data on the change in monthly premiums and tax credits for Boston, Massachusetts and Houston, Texas, major cities in the states with the lowest and highest percentage of uninsured individuals in 2017, respectively.

2015 to 2016[edit]

Commonwealth Fund
The Commonwealth Fund examined premiums for all plans offered on the exchanges. The organization found that premiums increased by an average of 6% nationwide from 2015 to 2016. The state-by-state changes ranged from a 37% increase in Tennessee to an 8% decrease in Texas. The table below shows average 2016 premiums by plan metal level in the United States, as analyzed by the Commonwealth Fund. These figures are compared to Massachusetts and Texas, the states with the lowest and highest percentage of uninsured individuals in 2017, respectively.^[22]

Kaiser Family Foundation
For premium changes from 2015 to 2016, an analysis of benchmark plans from the Kaiser Family Foundation found an average increase of 10.1% on the exchanges. The average increase weighted by 2015 enrollment amounted to 3.6%, although enrollment data was not available for all cities studied when the organization conducted its analysis. The unweighted changes in premiums ranged from a 38.4% increase in Nashville, Tennessee to a 10.6% decrease in Seattle, Washington.^[23]

PricewaterhouseCoopers
An analysis from PricewaterhouseCoopers of premium changes from 2015 to 2016 found that average premiums for benchmark plans offered on the exchanges rose by 4.2%. The state-by-state changes in premiums ranged from a 35% increase in Oklahoma to 10% decreases in Indiana and Washington.^[24]

Analysis[edit]

2018 premiums[edit]

According to the American Academy of Actuaries, the major drivers of premium changes from 2017 to 2018 were the underlying growth in healthcare costs and regulatory uncertainty. The organization issued a report stating that costs for healthcare services and prescription drugs were expected to rise between 5 and 8% in 2018. In addition, the report listed four areas of regulatory uncertainty impacting health insurance premiums in 2018:^[29]

• uncertainty related to whether cost-sharing reduction reimbursements would continue to be paid
• uncertainty related to enforcement of the individual mandate
• uncertainty related to how the shorter open enrollment period (November 1, 2017, to December 15, 2017) and stricter rules for special enrollment periods will impact the risk pool
• uncertainty related to potential legislative changes to the ACA

Other drivers of premium changes included state programs to reimburse insurers for high-cost enrollees that could put downward pressure on premiums, changes in the composition of the risk pool, and the reinstatement of the ACA's fee on health insurers.^[29]

2017 premiums[edit]

According to the American Academy of Actuaries, the major drivers of premium changes from 2016 to 2017 were the underlying growth in healthcare costs, the end of the reinsurance program, and the availability of more complete information on the health status of the risk pool. Although increases in the cost of healthcare services were expected to be lower than in previous years, insurers were uncertain about whether this trend would continue. In addition, the end of the federal reinsurance program, which had reimbursed insurers for high-cost enrollees, put upward pressure on premiums.^[30]

Other drivers of premium changes included a suspension of the ACA's fee on health insurers, putting downward pressure on premiums, a change in the legal definition of small employer, and narrower provider networks.^[30]

Initial premiums[edit]

According to an article by PolitiFact, premium increases in the individual market were expected by healthcare policy analysts. The article suggested that increases could be due to the following reasons:^[31][32]

• A requirement for plans offered on the exchanges to cover a standard set of benefits that weren't covered before.
• Two provisions known as guaranteed issue and community rating that prevented denial of coverage to individuals with pre-existing conditions and also prohibited differing premium rates based on those conditions and other observable characteristics, such as gender. These two provisions were expected to result in rate increases for everyone to cover associated costs.
• Higher-than-expected medical loss ratios, meaning insurers paid more for claims than expected, or in some cases paid more in claims than they received in premium revenue.^[33]

According to the Robert Wood Johnson Foundation, prior to 2014's implementation of the requirement to cover a standard set of benefits, less than half of people with individual coverage were in plans that covered those benefits. The organization found that new benefits likely resulted in an increase in the number of claims filed with insurers and thus an increase in costs requiring an increase in premiums.^[33]

Premiums for employer-sponsored insurance[edit]

The Henry J. Kaiser Family Foundation (KFF) found that 2013 to 2014 increases for employer-sponsored insurance (both small and large group) were smaller than those in the individual market: average single coverage premiums increased nationwide by 2%; KFF stated that this "difference [was] not statistically significant," meaning premiums were essentially unchanged. Meanwhile, average family coverage premiums increased by 3%. From 2014 to 2015, the organization found an increase of 4% for both single and family coverage, "continuing a fairly long period (2005 to 2015) where annual premium growth has averaged about 5%."^[34][35]

According to subsequent KFF reports, employer-based coverage premiums increased by 2.9% for single plans and 3.4% for family plans from 2015 to 2016, and by 4% for single plans and 3% for family plans from 2016 to 2017. State-based data was not available in any of the reports.^[36][37]

Deductibles[edit]

2016[edit]

According to the Kaiser Family Foundation, in 2016, average deductibles in the 37 states with federally facilitated or partnership exchanges were as follows:^[38]

• $5,765 for combined medical and prescription drug deductibles on bronze plans (89% of bronze plans had combined deductibles)
• $3,064 for combined deductibles on silver plans (56% of silver plans had combined deductibles)
• $3,198 for separate medical deductibles on silver plans (44% of silver plans had separate medical and prescription drug deductibles)
• $1,136 for separate medical deductibles on gold plans (57% of gold plans had separate deductibles)
• $409 for separate medical deductibles on platinum plans (73% of platinum plans had separate deductibles)

2015[edit]

In 2014, the publication Modern Healthcare estimated that 60 to 80% of health plans on the exchanges would be high deductible health plans in 2015. For 2015, the Internal Revenue Service (IRS) considered plans with deductibles of at least $1,300 for single coverage and $2,600 for family coverage to be high-deductible plans. According to the Kaiser Family Foundation, in 2015, average deductibles in the 37 states with federally facilitated or partnership exchanges were as follows:^[39][40][41]

• $5,328 for combined medical and prescription drug deductibles on bronze plans (91% of bronze plans had combined deductibles)
• $2,556 for combined deductibles on silver plans (55% of silver plans had combined deductibles)
• $3,453 for separate medical deductibles on silver plans (45% of silver plans had separate medical and prescription drug deductibles)
• $1,431 for separate medical deductibles on gold plans (63% of gold plans had separate deductibles)
• $418 for separate medical deductibles on platinum plans (62% of platinum plans had separate deductibles)

Government spending[edit]

Overall[edit]

In 2016, the Congressional Budget Office (CBO) estimated the net cost to the federal government of the subsidies, taxes, and penalties associated with the health insurance coverage provisions of the ACA to be $8.9 trillion between 2017 and 2026. This was $1.4 trillion higher than if the ACA had never been enacted. The October 2017 report stated that the CBO would no longer estimate the specific impact of the ACA on the federal budget because "generating such estimates is becoming more difficult and less meaningful" as time went on.^[42]

For states, the primary changes in spending associated with the ACA were on Medicaid and uncompensated care. States that ran their own exchanges were also responsible for financing them, which The Washington Post reported in 2015 could cost these states $28 million to $32 million per year.^[43][44]

Medicaid[edit]

See also Medicaid

Spending on Medicaid expansion[edit]

On January 1, 2017, states began contributing 5% of the total cost of covering expansion enrollees; this amount increased to 6% in 2018. Some states that covered childless adults through Medicaid before the Affordable Care Act were already contributing some state funds to their coverage before January 1, 2017. For individuals who had been eligible for Medicaid prior to the expansion but chose to enroll afterward, the federal share of their costs remained at pre-ACA levels.^[45]

In its spring 2017 report, the National Association of State Budget Officers collected data from states on spending for individuals enrolled in Medicaid under the expanded eligibility provisions of the ACA. The organization found that about $78 billion was spent nationwide on Medicaid expansion enrollees during 2016, with 95.1% of this spending being funded by the federal government. The table below provides these figures as broken down into state funds and federal funds for the United States, as well as Massachusetts, the state with the lowest percentage of uninsured individuals in 2017. Information was collected only from states that had expanded Medicaid; Texas, the state with the highest percentage of uninsured individuals, is marked with N/A because that state did not expand Medicaid.^[45]

Projected Medicaid spending[edit]

Between 2012 and 2016, the Congressional Budget Office (CBO) released a series of reports that estimated the impact of the Affordable Care Act (ACA) on state Medicaid spending over the following 10 years:^{[43][46][47][48][49][50]}

• March 2012: The CBO estimated that between 2012 and 2022, total state spending for Medicaid would be $73 billion higher than it would have been without the ACA.
  • The Center on Budget and Policy Priorities calculated this to represent a 2.8% difference.
• July 2012: The CBO revised its estimates due to the Supreme Court ruling that Medicaid expansion must be made voluntary on the part of the states. That estimate put the impact of the ACA on state Medicaid spending at $41 billion.
• February 2014: The CBO estimated Medicaid spending would be $70 billion higher between 2015 and 2024 than without the ACA.
• April 2014: The CBO reduced its estimate for the impact of the ACA on state Medicaid spending to $46 billion, where it remained in its March 2015 estimate for 2016 through 2025.

In the CBO's March 2016 estimate of the impact of the ACA on the federal budget, the agency stated it would no longer estimate the impact of the ACA on government spending as compared to no ACA because "generating such estimates is becoming more difficult and less meaningful" over time. The March 2016 report did not estimate the effects on state spending.^[42]

Total Medicaid spending, 2012-2016[edit]

During fiscal year 2016, combined federal and state spending for Medicaid in the United States totaled about $553.5 billion. Spending on the Medicaid program increased by about 33.3% between fiscal years 2012 and 2016. The table below compares these figures to those for Massachusetts and Texas, the states with the lowest and highest percentages of uninsured individuals in 2017, respectively.^{[51][52][53][54][55]}

Tax credits[edit]

The Kaiser Family Foundation estimated the total amount of premium tax credits received during 2017 by residents in each state. The organization calculated this estimate by multiplying the total number of enrollees by the average tax credit received. Federal spending on cost-sharing reductions was not calculated. Nationwide, the federal government provided an estimated total of $38.8 billion in federal tax credits during 2017. The table below shows this amount compared to the amount of tax credits provided to residents in Massachusetts and Texas, the states with the lowest and highest percentages of uninsured individuals in 2017, respectively.^[56]

Uncompensated care[edit]

Uncompensated care is the sum of healthcare services provided to patients without reimbursement; this includes both charity care and bad debt. In 2013, total government spending for uncompensated care nationwide amounted to $53.3 billion. The federal government paid $32.8 billion, while state and local governments paid $19.8 billion. Due to the expansion of insurance coverage options (Medicaid in some states and health insurance exchanges in every state), states could see a reduction in their spending for uncompensated healthcare. According to a 2015 report from the U.S. Department of Health and Human Services, in 2014, uncompensated care costs declined by $5 billion in states that expanded Medicaid and by $2.4 billion in states that did not. State-level data was not available.^[57][58]

According to a separate report from the American Hospital Association, uncompensated care costs nationwide amounted to $35.7 billion in 2015. This was a decline of $7.1 billion from 2014, when the organization estimated uncompensated care costs amounted to $42.8 billion.^[59]

Market reactions[edit]

Health insurance exchanges[edit]

To learn more about these issues in detail, see Ballotpedia's full page on the health insurance exchange issues.

During 2015 and 2016, the following events related to the Affordable Care Act's health insurance exchanges occurred:

• Over half of the nonprofit insurance co-ops established under the law, which sold plans on the exchanges, had closed by October 2015.
• Three major nationwide insurers scaled back their presence on the exchanges for 2017.
• Insurers requested an average 24.6% premium increase for their 2017 exchange plans.

The health insurance exchanges were created under the ACA to serve as a platform where individuals without employer-sponsored insurance can browse and purchase plans. The law also provided for the establishment of insurance co-ops to compete with larger insurers on the exchanges. Twenty-three co-ops were created under the law, but many were in a precarious financial position after their first year. Policy analysts primarily attributed these early financial struggles to premiums that were set too low, benefits that were too generous, and enrollment that grew too quickly. By the end of 2015, half had been deemed insolvent by state regulators and closed. Five others closed in 2016, leaving six in operation by October 2016.^{[60][61][62][63]}

In addition to the co-ops, other insurers also lost money on their exchange plans—two-thirds of those participating in the exchanges were unprofitable in 2014, according to the Commonwealth Fund. During 2016, three major insurers—UnitedHealthcare, Humana, and Aetna—announced intentions to withdraw from most exchanges in 2017 due to their losses. Due to these exits and other exits of smaller statewide insurers, consulting firm Avalere found that about 36% of ACA markets would have just one carrier offering plans in 2017.^[64]

Insurers nationwide also requested estimated average premium increases of 24.6% for plans offered in the individual market in 2017, which they said were necessary to continue to pay medical claims for enrollees who were unhealthier than expected. This figure included premiums for plans sold both on and off the exchanges. On October 25, 2016, the U.S. Department of Health and Human Services announced that in the 38 states using the Healthcare.gov platform, premium rates for benchmark plans would rise by an average 25% in 2017. These increases were attributed to rising medical costs, the end of the transitional reinsurance program, and a pool of enrollees who were sicker than expected.^[65][66][67]

Number of insurers on exchanges[edit]

In July 2017, the Centers for Medicare and Medicaid Services (CMS) issued a press release stating that fewer health insurers had applied to offer plans on the health insurance exchanges for 2018, 141 compared to 227 applying to offer plans for 2017. The press release followed announcements from Humana and Aetna that they would not offer any health plans on any state exchange in 2018. In addition, in 2016, UnitedHealthcare had announced that it would exit all but three exchanges in 2017. The insurers said their decisions to exit the markets were based on financial losses and regulatory uncertainty regarding the cost-sharing reduction reimbursements.^{[68][69][70][71][72]}

Nationwide, an average of 4.3 insurers per state offered plans on the exchanges in 2017, compared to an average of 5.6 insurers in 2016, six in 2015, and five in 2014. The table below displays the number of health insurers that offered plans on each state's exchange for each year between 2014 and 2017. This information is provided for Massachusetts and Texas, the states with the lowest and highest percentages of uninsured individuals in 2017, respecitvely.^[73]

Narrow networks[edit]

The Affordable Care Act required insurers to design plans that offered a standard set of health benefits, termed by the law as essential health benefits. The law also prohibited them from denying coverage to individuals with pre-existing conditions or from varying a person's premium for any reason other than age, tobacco use, and location. These provisions limited the ways insurers could design plans that feature lower premiums. One way insurers could keep premiums down was to offer plans with limited or narrow networks, meaning they contracted with fewer providers for services in exchange for lower prices. The Robert Wood Johnson Foundation found that in 2014, 41% of silver-level plans, the most common type sold on the state exchanges, offered narrow networks. In a separate study, management consulting firm McKinsey & Company found that in 2014, 39% of plans offered on the exchanges had narrow hospital networks; in 2015, they found that this figure had increased to 45%.^[29][74][75]

Although they could allow insurers to offer lower premiums, narrow networks restrict consumers' choice of providers by design. According to Kaiser Health News, this could sometimes cause consumers to drive long distances for care, impede their access to providers, or result in high out-of-pocket costs for necessary care because the provider is out of network. Some state regulators enacted legislation requiring insurers to offer wider provider networks, sometimes referred to as network adequacy standards. As of November 2015, just over half of states applied network adequacy standards to plans offered on their exchanges.^[76][77][78]

Direct primary care[edit]

See also: Direct primary care

In 2012, there were 4,400 direct primary care practices in the United States, up from 146 in 2004.

Direct primary care, a type of retainer-based healthcare, is a healthcare model that emerged as an alternative to the system of paying for healthcare with health insurance. In a direct primary care arrangement, patients contract directly with their primary care physicians, paying a flat monthly, quarterly, or annual fee—also called a retainer—that covers all primary care visits and services over the time period. According to the Heritage Foundation, doctors switch to direct primary care practices due to concerns about "doctor shortages, narrow networks, and ... third-party reimbursement." In 2004, the U.S. Government Accountability Office identified 146 retainer-based practices, which included direct primary care as well as other types of retainer-based healthcare, such as concierge medicine. In 2010, the National Opinion Research Center found that this number had increased to 756. In 2012, the American Academy of Private Physicians counted 4,400 direct primary care practices.^[79][80]ref>National Opinion Research Center, "Retainer‐Based Physicians: Characteristics, Impact, and Policy Considerations," March 2010</ref>^[81]

In direct primary care, the physician's practice does not accept insurance; instead, a monthly fee of typically $100 or less is charged and covers all services. Alongside the arrangement with their primary care physician, individuals often have a supplementary insurance plan that covers specialist and catastrophic care. Direct primary care practices often see fewer patients than traditional practices, and their physicians tend to spend more time with their patients in appointments.^[81][82][83]

The Affordable Care Act contained a provision allowing direct primary care plans to be sold on the health exchanges along with a wraparound insurance plan. Under the law, direct primary care on its own did not constitute insurance. However, in 2005 the West Virginia Insurance Commission investigated a concierge medicine practice for potentially violating state insurance laws. As of November 2015, 15 states had either introduced or enacted legislation clarifying that direct primary care was not subject to insurance laws and removing them from liability.^{[80][84][85][86]}

Historical data[edit]

Medical loss ratio rebates[edit]

Insurance coverage overall[edit]

Health insurance exchange enrollment[edit]

Recent news[edit]

The link below is to the most recent stories in a Google news search for the terms Affordable Care Act United States. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

See also[edit]

• Federal policy on healthcare, 2017-2020
• Medicaid
• Healthcare policy in the United States

Effect of the Affordable Care Act in the 50 states[edit]

Click on a state below to read more about how the Affordable Care Act has affected that state.

Footnotes[edit]