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Original Investigation
Health Care Reform
March 2018

Out-of-Pocket Spending and Premium Contributions After Implementation of the Affordable Care Act

Author Affiliations
  • 1Cambridge Health Alliance, Cambridge, Massachusetts
  • 2Department of Medicine, Harvard Medical School, Boston, Massachusetts
  • 3Department of Medicine, City University of New York at Hunter College, New York City, New York
JAMA Intern Med. 2018;178(3):347-355. doi:10.1001/jamainternmed.2017.8060
Key Points

Question  Was implementation of the Affordable Care Act associated with reduced spending on out-of-pocket medical expenses and household premium contributions among nonelderly adults?

Findings  In this nationally representative survey of validated spending data from 83 431 US adults, mean out-of-pocket spending decreased by 11.9% in the first 2 years after the insurance expansions, driven by reductions among persons eligible for the Medicaid expansion and those eligible for cost-sharing and premium subsidies on health insurance exchanges. Premium contributions increased by 12.1%, mainly owing to large increases in the higher-income group, whereas total health spending by households decreased in the Medicaid-eligible (lowest-income) group by 16.0%.

Meaning  Implementation of the Affordable Care Act was associated with reduced out-of-pocket spending for US medical care, particularly among those with lower incomes, but not with reduced premiums.


Importance  The Affordable Care Act (ACA) was associated with a reduced number of Americans who reported being unable to afford medical care, but changes in actual health spending by households are not known.

Objectives  To estimate changes in household spending on health care nationwide after implementation of the ACA.

Design, Setting, and Participants  Population-based data from the Medical Expenditure Panel Survey from January 1, 2012, through December 31, 2015, and multivariable regression were used to examine changes in out-of-pocket spending, premium contributions, and total health spending (out-of-pocket plus premiums) after the ACA’s coverage expansions on January 1, 2014. The study population included a nationally representative sample of US adults aged 18 to 64 years (n = 83 431). In addition, changes were assessed in the likelihood of exceeding affordability thresholds for each outcome and spending changes for income subgroups defined under the ACA to determine program eligibility at 138% or less, 139% to 250%, 251% to 400%, and greater than 400% of the federal poverty level (FPL).

Exposure  Implementation of the ACA’s major insurance programs on January 1, 2014.

Main Outcomes and Measures  Mean individual-level out-of-pocket spending and premium payments and the percentage of persons experiencing high-burden spending, defined as more than 10% of family income for out-of-pocket expenses, more than 9.5% for premium payments, and more than 19.5% for out-of-pocket plus premium payments.

Results  In this nationally representative survey of 83 431 adults (weighted frequency, 49.1% men and 50.9% women; median age, 40.3 years; interquartile range, 28.6-52.4 years), ACA implementation was associated with an 11.9% decrease (95% CI, −17.1% to −6.4%; P < .001) in mean out-of-pocket spending in the full sample, a 21.4% decrease (95% CI, −30.1% to −11.5%; P < .001) in the lowest-income group (≤138% of the FPL), an 18.5% decrease (95% CI, −27.0% to −9.0%; P < .001) in the low-income group (139%-250% of the FPL), and a 12.8% decrease (95% CI, −22.1% to −2.4%; P = .02) in the middle-income group (251%-400% of the FPL). Mean premium spending increased in the full sample (12.1%; 95% CI, 1.9%-23.3%) and the higher-income group (22.9%; 95% CI, 5.5%-43.1%). Combined out-of-pocket plus premium spending decreased in the lowest-income group only (−16.0%; 95% CI, −27.6% to −2.6%). The odds of household out-of-pocket spending exceeding 10% of family income decreased in the full sample (odds ratio [OR], 0.80; 95% CI, 0.70-0.90) and in the lowest-income group (OR, 0.80; 95% CI, 0.67-0.97). The odds of high-burden premium spending increased in the middle-income group (OR, 1.28; 95% CI, 1.03-1.59).

Conclusions and Relevance  Implementation of the ACA was associated with reduced out-of-pocket spending, particularly for low-income persons. However, many of these individuals continue to experience high-burden out-of-pocket and premium spending. Repeal or substantial reversal of the ACA would especially harm poor and low-income Americans.