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ACA reduced risk for catastrophic health expenses by 30%, study finds

hest for lowest-income Americans who now qualify for Medicaid under the law.

For lower-income Americans, the Affordable Care Act has helped avoid catastrophic financial situations because of greater access and lower costs. Photo by TBIT/Pixabay
For lower-income Americans, the Affordable Care Act has helped avoid catastrophic financial situations because of greater access and lower costs. Photo by TBIT/Pixabay

Feb. 28 (UPI) -- While the Affordable Care Act has been controversial, and continues to be the subject of lawsuits, the appears to be protecting some Americans from financial disaster when they face unexpected health problems.

A new analysis published Friday by JAMA Network Open found that the law, also known as Obamacare, reduced the risk for "catastrophic health expenditures" among U.S. adults who experienced "traumatic injuries" by more than 30 percent.

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Having health insurance under the law also reduced out-of-pocket expenses by as much as 30 percent for some, the researchers observed.

"For this class of really unpredictable and potentially very expensive healthcare costs, the Affordable Care Act really is accomplishing one of its primary goals -- to protect families from catastrophic healthcare costs," study co-author Charles Liu, a general surgery resident at Stanford Hospital and Clinics in California, told UPI. "This is true even when you take premiums into account -- total spending including both premiums and out-of-pocket costs has gone down significantly for low-income families that had a family member with a traumatic injury."

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Since then-President Barack Obama signed the ACA into law in 2010, its impact on healthcare, and how it's paid for, in the United States has divided political opinion, typically along partisan lines. A decision on the law's constitutionality currently rests with the U.S. Court of Appeals for the 5th Circuit, after the Supreme Court refused to fast-track a decision last month.

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A number of recent studies have attempted to assess the economic effects of the law's Medicaid expansion component.

For the new research, Liu and his colleagues analyzed data from the Medical Expenditure Panel Survey. The data, collected from January 2010 to December 2017, covered American adults 19 to 64 years of age who had a hospital stay or emergency department visit for a traumatic injury, such as those sustained in a fall or motor-vehicle accident.

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Specifically, the researchers focused on the effects of the ACA on expenditures based on the law's income thresholds for eligibility.

Of the 6,288 cases included in the analysis, researchers found the impact of the ACA was greatest for lowest-income Americans -- those earning 138 percent of the federal poverty level or less -- who experienced 30 percent reductions in out-of-pocket spending, including 26 percent savings on health insurance premium costs.

In all, these lowest-income Americans -- many of whom qualified for Medicaid under the ACA's expanded eligibility provision -- were 39 percent less likely to experience "catastrophic health expenditures" as a result of suffering a traumatic injury.

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In addition, low-income Americans -- those earning 139 to 250 percent of the federal poverty level -- saw their insurance premium costs drop by roughly 22 percent, but were not protected from catastrophic health expenditures under the ACA.

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"Our study shows that the benefits have been uneven and there are still some gaps," Liu said. "For low-income folks who became eligible for Medicaid, protection against catastrophic costs from injury really has gotten better, but for too many Americans, a traumatic injury still leads to catastrophic or high-burden levels of out-of-pocket spending."

Indeed, based on their analysis, Liu and his colleagues estimated that 1 of every 11 Americans suffering a traumatic injury -- and one in five of those with the lowest incomes -- continued to experience catastrophic health expenditures annually, even under the ACA.

"There has been a lot of debate over trouble accessing care under the ACA, or healthcare costs going up under the ACA," Liu noted. "That was partly why we set out to do this study, to add some empirical evidence to this debate and to try to understand what American families have really been experiencing in terms of financial burden."

"Our study shows that when you look at everything together -- changes in premiums and changes in out-of-pocket costs -- spending and financial risk for families of adults who had a traumatic injury has gone down after the ACA was put in place," he said.

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