This blog was originally posted on the Georgetown Center on Health Insurance Reforms’ CHIRBlog.

This March, we had to reconcile the anniversary of a landmark health law with the anxiety and grief caused by the growing novel coronavirus (COVID-19) pandemic. As we celebrate the 10^th year of the Affordable Care Act (ACA), we also look to researchers to help us understand the gaps in our health care system highlighted by this pandemic. This month, we focus on studies that examine the capacity for states to handle the COVID-19 pandemic, the potential cost to employers and their employees, and the achievements of the ACA.

Baumgartner, JC, et al. Assessing Underlying State Conditions and Ramp-Up Challenges for the COVID-19 Response. The Commonwealth Fund, March 25, 2020.

The COVID-19 pandemic is requiring states to respond to the growing health care emergency in unprecedented ways. The Commonwealth Fund analyzed state-level data to evaluate health system capacity and other factors that may impact outcomes across states. The data were broken down into three categories:

• Clinical risk factors of the state’s adult population;
• State health system capacity and resources; and
• Insurance coverage and cost-related access barriers for adults.

What It Finds

• An estimated 43 percent of the adult population in the U.S. may be at heightened clinical risk amid the COVID-19 pandemic due to age and underlying health conditions, ranging across states from a low of 36 percent of the adult population in Utah to a high of 53 percent of the adult population in West Virginia.
• Under a surge scenario, where physicians who don’t participate in direct medical care move into patient care to meet increased demand, the U.S. as a whole would have 6.6 physicians per 100,000 residents. This varies greatly across states. Nevada and Texas are the worst off, at 2.2 and 4.2 physicians per 100,000 residents respectively, while Washington, DC and Massachusetts have greater capacity, at 26.5 and 19.5 physicians per 100,000 residents, respectively.
• There are 74 million people across the U.S. who are either uninsured or underinsured. States with a higher proportion of residents without coverage or with greater exposure to out-of-pocket costs may have poorer outcomes and a higher mortality rate, especially if their residents are less likely to seek treatment after infection.
• The combination of clinical capacity, insurance coverage rates, and at-risk adults puts states like Arizona, Georgia, Nevada, and Texas in a challenging position in their response to COVID-19.

Why It Matters

The COVID-19 pandemic has already caused far-reaching health and economic damage to individuals and families around the world. In the U.S., many states are struggling to control the spread of the virus. Enacted and pending federal legislation aims to address issues regarding capacity and other economic consequences, but gaps remain. Existing disparities among state health insurance coverage rates exacerbate differences in state preparedness, disproportionately affecting consumers in states that have not expanded Medicaid or rely on the federal marketplace platform. Policymakers should pay close attention to data indicators to develop adequate and effective responses at the state and federal level.

Rae M, et al. Potential Costs of Coronavirus Treatment for People with Employer Coverage. Kaiser Family Foundation, March 13, 2020.

Most non-elderly adults in the U.S. get their health insurance through their employer. Researchers at the Kaiser Family Foundation’s Peterson-KFF Health System Tracker examined and estimated the potential cost to employer health plans and their enrollees for treatment related to COVID-19 by looking at typical spending for hospital pneumonia admissions in 2018.

What It Finds

• The average total cost of treatment – the amount paid by an employer plan and the enrollee’s out-of-pocket costs – for a pneumonia-related hospital admission without complications or comorbidities was $9,763. For pneumonia-related admissions with major complications or comorbidities, the average total cost was $20,292.
• Among inpatient admissions for respiratory conditions requiring ventilator support for 96 hours or more, the median total cost of treatment was $88,114.
• Out-of-pocket spending for an inpatient admission for pneumonia among large employer plan enrollees averaged $1,300 for stays with major complications or comorbidities and $1,464 for stays without complications. Researchers believe this data underestimates out-of-pocket costs for COVID-19-related inpatient admissions because average deductibles in 2020 are higher than in 2018. Furthermore, because the virus hit relatively early in the year, fewer patients would have met their deductible.
• There is also evidence that the practice of out-of-network balance billing is on the rise. Researchers estimate that 18 percent of pneumonia-related in-network hospital admissions with major complications in 2018 resulted in an out-of-network bill. 

Why It Matters

In a country where most people do not have enough money on hand to cover a $1,000 emergency, the COVID-19 pandemic exposes millions to not just to a potentially severe illness, but serious financial hardship as well. Even with job-based health insurance, the out-of-pocket costs associated with inpatient admissions for respiratory illnesses are high. This, coupled with an economic downturn causing mass unemployment means that millions will be even more vulnerable to the high cost of health care. While many insurers have taken major steps to curb the cost of COVID-19 for their enrollees, major gaps remain, such as the potential for balance billing and loopholes to federal requirements.

Glied S, Collins S, and Lin S. Did the ACA Lower Americans’ Financial Barriers to Health Care? Health Affairs, March 1, 2020.

Researchers at New York University and the Commonwealth Fund teamed up to review studies on the law’s achievement in addressing barriers to insurance coverage, access to health care, and financial protection.

What It Finds

• Compared to 2009 forecasts, 30 million more people have insurance today, and the uninsured rate is roughly half of those projections.
• Coverage expanded in all demographic groups, and populations with pre-existing conditions like cardiovascular disease, cancer survivors, and people with disabilities saw major improvements in accessing both health coverage and care due to ACA reforms.
• The ACA reduced both marriage and job “lock,” decreasing the amount of people who need to stay in a job or marriage as a means to keep or afford their health insurance.
• Coverage through the ACA’s marketplaces resulted in better access to care, such as a lower probability of cost barriers to care and a greater chance of having a primary care doctor.
• Out-of-pocket spending declined among those with the highest annual spending for populations enrolled in individual coverage as well as those with incomes below 400 percent of the federal poverty level (FPL).

Why It Matters

Assessing the impact of the ACA’s coverage provisions helps us evaluate whether it worked as intended, and to find areas for improvement. Based on an extensive literature review, the ACA has accomplished its goals by significantly increasing coverage and decreasing financial barriers to health care. As the law faces yet another challenge in federal court, policymakers should look to research that illustrates the consequences of ending reforms that led to such widespread improvement.

Beeuwkes Buntin M and Graves J. How the ACA Dented the Cost Curve. Health Affairs, March 1, 2020.

The ACA set out to make health care more affordable at both the individual and national level. Researchers at the Vanderbilt University School of Medicine assessed how the ACA directly and indirectly impacted spending across various payers.

What It Finds

• After the ACA’s enactment, from 2010 to 2018, average annual health spending grew 4.3 percent nationally, compared to 6.9 percent between 2000 to 2009 (before the ACA’s enactment).
• The ACA lowered per-beneficiary Medicare Advantage spending from approximately 109 percent of fee-for-service Medicare spending to 100 percent between 2010 and 2019.
• In 2019, the federal government spend an average of $4,620 per person under age 65 on Medicaid, and $6,490 per person on subsidies for private marketplace plans.
• Recent administrative and legislative actions have resulted in a six percent premium increase for individual health insurance plans in 2019.
• Spending in the employer-sponsored insurance segment accounts for more than double the spending of fee-for-service Medicare. Researchers note that employers face significant barriers to fully embracing ACA-inspired cost-containment efforts, such as value-based payment models.
• Insurers have a renewed interest in lowering costs through narrower or tiered provider networks, due in part to the ACA’s regulations on plan design.

Why It Matters

Measuring the extent to which the ACA reduced health care spending is difficult, due to broader economic forces and post-implementation policy changes. Although health spending slowed in the eight years after the ACA was enacted (compared to the decade prior), there is evidence that spending is on the rise, primarily due to increases in commercial market provider prices. However, some of the payment and delivery system reform efforts in Medicare and Medicaid launched by the ACA have shown seeds of promise, as have initiatives in the commercial insurance market to narrow provider networks. Going forward, it remains to be seen what sort of impact COVID-19 will have on national health spending trends.