ACA Will Have Little Effect On Costs Or Coverage In Near Term For Most People

Approximately 230 million people, about 70 percent of the U.S. population, will see very little change in their premiums due to the Patient Protection and Affordable Care Act (ACA), according to a study by the American Institute for Economic Research (AIER). These are mostly individuals who are covered by employer-sponsored health insurance or public assistance programs.

Many of those who purchase insurance on the individual market and the uninsured are likely to see significant changes in premium costs, however. AIER estimates that more than 50 million people will likely face higher premiums, while more than 30 million will likely see lower or very low premiums.

“The ACA is one of the most confusing and controversial pieces of legislation in years,” said Stephen Adams, president of AIER. “We conducted this study to provide Americans with an objective, non-partisan analysis of how the law will affect them. The good news for most people is that the ACA will have little effect on their costs or coverage, at least in the near term. But, for those who are affected, it’s important to have an unbiased understanding of what might change.”

Employer plans. Workers who are dropped from their employers’ small or large group plans are likely to experience significant cost increases, the study found. These people must purchase insurance in the individual market where they pay full premium costs and lose the benefit of sharing costs with their employer. It is not likely that a large number of people will be in this position because employers who drop insurance will have more difficulty competing for workers, according to the study.

Many small group plans face conflicting pressures from the ACA, the study noted. For many small group plans, the ACA’s stricter limits on medical underwriting will help hold down premium costs. But they also will face upward price pressure from the additional administrative costs associated with complying with the ACA and the costs of higher take-up rates by employees.

Medicaid gap. AIER also estimates that nearly 6 million people will fall into the Medicaid gap, a quirk in the law created when 25 states declined to expand national eligibility standards for Medicaid. This gap includes people with incomes that are too low to be eligible for subsidies under the ACA, but are too high to qualify for Medicaid in their state.

“Implementation of important parts of the law has been delayed, so it’s hard to predict the law’s impacts with any precision,” Adams added. “It’s unknown how many employers will stop offering plans because of the law, for instance, or whether enough people will sign up for individual insurance to keep premiums in check. These are some of the aspects of the law that will need to be monitored over the next few years.”

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