| Summary: |
This study examines the likely effects of the Affordable Care Act (ACA) on average annual
consumer health care spending, the risk of catastrophic medical costs, and average annual
consumer health spending and the risk of catastrophic medical costs for low-income individuals
in two large states: one in which Medicaid will not be expanded (Texas) and one in which
expansion appears unlikely but remains undecided as of August 2013 (Florida). The ACA will
have varied impacts on individuals’ and families’ spending on health care, depending on income
level and on estimated 2016 insurance status without the ACA. The authors find that average
out-of-pocket spending is expected to decrease for all groups considered in the analysis, although
decreases in out-of-pocket spending will be largest for those who would otherwise be uninsured.
People who would otherwise be uninsured who transition to the individual market under the
ACA will have higher total health care spending on average after implementation of the ACA
because they will now incur the cost of health insurance premiums. The authors also find that
risk of catastrophic health care spending will decrease for individuals of all income levels for the
insurance transitions considered; decreases will be greatest for those at the lowest income levels.
Case studies found that in Texas and Florida, Medicaid expansion would substantially reduce
out-of-pocket and total health care spending for those with incomes below 100 percent of the
federal poverty level, compared with a scenario in which the ACA is implemented without
Medicaid expansion. Expansion would reduce the risk of high medical spending for those
covered under Medicaid who would remain uninsured without expansion
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