In its first year, the Affordable Care Act is not only extending health-care coverage to more Americans, but it’s also reducing their financial distress related to medical bills.
A new study from The Commonwealth Fund found that the share of American adults who reported trouble in paying their medical bills slipped to 23 percent last year, or 43 million people — the first time in a decade that the percentage has dropped. By comparison, the percentage of Americans with trouble paying medical bills in 2012 stood at 30 percent, or roughly 55 million people:
Making it easier for people to deal with their health care costs was one of the goals of the President’s signature health care law, which opened up federal and state-run exchanges to provide uninsured individuals with access to affordable health insurance plans. The Commonwealth survey, which began in 2001 and has been conducted every two years since then, also found that the percentage of Americans who were contacted by a collection agency for unpaid medical bills declined to 15 percent last year, down from 18 percent in 2002.
Cost isn’t as much as a barrier to seeking out medical care, either, said the Commonwealth Fund, a nonpartisan philanthropic organization focused on improving the health care system. The number of Americans who said they didn’t seek out needed health care because of its cost declined for the first time since 2003. About 66 million Americans reported problems getting care because of cost last year, down from 80 million in 2012:
In a press release, the researchers described the findings as “remarkable.” This marks the first time since 2005, when the Commonwealth Fund started surveying people on these questions, that the number of Americans struggling to afford medical care hasn’t increased.
“Health insurance really provides people with a financial means to get care,” Sara Collins, a vice president at the Commonwealth Fund and one of the people who worked on the study, told the New York Times. “We don’t know yet that the law is improving people’s health, but this is a first indication that people are affording care that they weren’t able to get in the past.”
The new findings, which also documented a drop in the number of Americans without health insurance, are in line with other recent reports that have shown significant declines in the uninsured rate under Obamacare. The number of Americans without health insurance was reduced by about 25 percent last year, which means that between eight million and eleven million people have gained new coverage.
Among the groups that saw the greatest boost in health care coverage last year were young adults and families with incomes less than 200 percent of the federal poverty level, or about about $47,100 for a family of four. New coverage options for young adults include extended age limits for remaining on a parent’s policy and expanded eligibility for Medicaid, with the latter also helping low-income families.
While the report found improvement by many measures, not everyone benefited equally. Americans living in Republican-led states that rejected the Medicaid expansion are lagging in health insurance coverage compared with those in states that widened access to the program. In states that expanded Medicaid, only 19 percent of families with incomes below $24,000 lacked insurance last year, compared with 35 percent in states that didn’t expand the program.
Even with the significant gains documented under Obamacare, the high cost of health care remains an issue for millions of Americans. According to the Commonwealth survey, there are still about 66 million adults who reported skipping out on care last year because they couldn’t afford it. For uninsured and underinsured individuals, an unexpected illness or injury can quickly result in financial ruin. About 43 million Americans have an overdue medical charge on their credit reports, and medical debt ranks as one of the leading causes of bankruptcy in the United States.
Still, the new report provides pretty clear evidence that the Affordable Care Act is addressing many of the core problems in the health care system, including rising prices. As the New York Times reports, “financial distress was a clear target of the health law,” and the new data suggest that the ACA is moving toward this goal.
Unfortunately, much of this progress could be undermined depending on the outcome of a pending Supreme Court case against the Affordable Care Act. The case, King v. Burwell, seeks to prevent the government from providing tax credits in the 37 states with federally-run marketplaces, essentially cutting off millions of people from affordable coverage under the health law. Previous analyses have calculated that the cost of insurance in those states would increase by an average of 76 percent if federally-run marketplaces were no longer permitted to extend tax credits. In some states, monthly premiums could jump by nearly $400.