The study found that overall the Affordable Care Act will have a varied impact on health spending by individuals and families, depending primarily on their income and whether they would have been uninsured in 2016 without the program.
People who will be newly insured and do not qualify for government subsidies are those who are most likely to see increased total spending as they begin paying premiums for health coverage. Uninsured people who become newly insured under Medicaid will see the largest drop in spending.
Studying Florida and Texas in detail, researchers also estimated consumer spending in states that have chosen to not expand Medicaid. Compared to a hypothetical case in which Medicaid is expanded, the study found that overall health spending will increase for low-income people who remain uninsured or purchase private health insurance in the individual insurance market.
"Among the groups we studied, a clear benefit of the Affordable Care Act is that it will reduce the risk of facing catastrophic medical costs," said Christine Eibner, a study author and a senior economist at RAND, a nonprofit research organization. "Consumers with the lowest incomes will see the most-dramatic reductions of their risks."
Researchers used an updated version of the RAND COMPARE microsimulation model, which predicts the effects of health policy changes at state and national levels, to estimate how the Affordable Care Act is likely to change the out-of-pocket costs (co-pays and deductibles) as well as overall care spending (including plan premiums) for people who will become newly insured and people who will change their source of health coverage.
The study also examined the likely impact of the Affordable Care Act on out-of-pocket spending and the risk of facing catastrophic health costs for low-income people in Texas and Florida, two states that have decided not to expand Medicaid under the Affordable Care Act.
Among the study's findings:
The research was sponsored by the Commonwealth Fund.
The report, "Effects of the Affordable Care Act on Consumer Health Care Spending and Risk of Catastrophic Health Costs," is available at www.rand.org. Other authors of the study are Sarah A. Nowak, David M. Adamson and Evan Saltzman.
RAND Health is the nation's largest independent health policy research program, with a broad research portfolio that focuses on health care costs, quality and public health preparedness, among other topics.
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