The Affordable Care Act’s Insurance Marketplace Subsidies Were Associated With Reduced Financial Burden For US Adults

• DOI: 10.1377/hlthaff.2020.01106
• Publication Date: 2021-03-01T20:51:12Z
• Authors: Charles Liu; Hiroshi Gotanda; Dhruv Khullar; Thomas Rice; Yusuke Tsugawa
• Keywords: Adult; Insurance, Health; Health Insurance Exchanges; Medicaid; Patient Protection and Affordable Care Act; 1. No poverty; Humans; Cost Sharing; 0101 mathematics; 01 natural sciences; Insurance Coverage; United States

Research suggests that the Affordable Care Act (ACA) Medicaid expansions improved financial protection for the poor. However, evidence is limited on whether subsidies offered through the ACA Marketplaces, the law's other major coverage expansion, were associated with reduced financial burden. Using national survey data from the period 2008-17, we examined changes in household health care spending among low-income adults eligible for both Marketplace premium subsidies and cost-sharing reductions (139-250 percent of the federal poverty level) and middle-income adults eligible only for premium subsidies (251-400 percent of the federal poverty level), using high-income adults ineligible for subsidies (greater than 400 percent of the federal poverty level) as controls. Among low-income adults, Marketplace subsidy implementation was associated with 17 percent lower out-of-pocket spending and 30 percent lower probability of catastrophic health expenditures. In contrast, middle-income adults did not experience reduced financial burden by either measure. These findings highlight the successes and limitations of Marketplace subsidies as debate continues over the ACA's future.