What have we learned about the ACA over the last year?
In his State of the Union address, President Obama stated “in the past year alone, about ten million uninsured Americans finally gained the security of health coverage.” The Affordable Care Act’s key coverage provisions (Medicaid expansion and the insurance exchanges) have been in effect for more than a year and are responsible for the increased coverage Obama highlighted. But what else can be said about health insurance reform?
The big ACA news from last year is the lack of bad news, but avoiding a disaster is a low bar. While they might not have gotten the most headlines there were some notable successes, too. More than 9 million people are estimated to be net newly insured and millions more have new insurance options. The Congressional Budget Office’s estimates for coverage were shockingly close to the actual enrollment despite the flawed roll-out. Premiums have remained stable or even declined in most places. In a big departure from the trend of the 2000s, medical inflation has been roughly the same as overall inflation. A recent study by researchers at the Urban Institute found no change in the number of people receiving insurance from their employers since the implementation of the new health law.
That said, the Affordable Care Act has not solved all of the nation’s health insurance problems. There are still tens of millions of uninsured people. The goals of the law, to increase insurance affordability and coverage, still have some way to go. Several states have elected not to expand Medicaid, which means many people will remain uninsured. Likewise, affordability will remain an issue. A new study from RAND researchers finds, somewhat counter-intuitively, that increased insurance competition may actually result in higher consumer costs by increasing the number of high deductible plans.
In addition to this mix of good and the bad news, there are some things that are not yet known. With only one year of full implementation of the coverage provisions, more issues may arise. For instance, the Affordable Care Act was assumed to reduce “job lock,” when people stay in a job they would quit if they did not need health insurance. A study by economists Craig Garthwaite and Matthew Notowidigdo of Northwestern University, and Tal Gross of Columbia University looked at the employment effects when people in Tennessee lost public insurance. Their analysis implies that we should expect the ACA to allow a lot of people to retire early or work part-time. The employment data may or may not show this happening.
While economists are measuring the impact on job lock, there are other questions that health care researchers will be tackling over the next few years. How do Medicaid costs compare in states such as Arkansas that expanded Medicaid through a private option? Will the insurance markets remain stable as some of the ACA’s components such as reinsurance and risk corridors phase out? What additional reforms are needed to improve access to care, increase affordability, and raise quality? All of these issues will be important for researchers and policymakers to grapple with as they calculate the promise of the Affordable Care Act to reduce health insurance inequality in the United States.