In this second installment of a two-part briefing, the impact of the Affordable Care Act on healthcare spending by businesses and consumers during the past eight years is assessed
No single piece of legislation during the Obama Administration generated more controversy than the Affordable Care Act (ACA), which became law in 2010. It was touted by proponents within and without the administration as the needed solution to the nation’s healthcare problems.
The two biggest problems with healthcare in the United States are probably the sustained year-over-year growth in total healthcare spending and the large number of Americans who lack adequate health insurance. At the time that the ACA was signed into law by President Obama, there were assurances that this law would help solve both problems.
Thus, at the end of the Obama Administration’s eight years in office, both academic experts and journalists are writing their assessment about how the ACA has changed healthcare in the United States. This is a high-interest subject for medical laboratories and pathology groups, hospitals and health systems, and physicians.
Changes in Spending by Business and Consumers
Dark Daily recently published a story about total healthcare spending in the United States during the Obama Administration. (See Dark Daily, “Changes in Healthcare Spending During Obama Administration,” December 28, 2016.) Now, in this second of the two-part series, Dark Daily looks at the trends in healthcare spending over the years of the Obama administration by two separate groups in the United States: businesses and consumers.
Since 2010, businesses have not seen an easing in the cost of the health benefits they provide to employees. In fact, the percentage of companies offering health insurance to their employees was just 56% in 2016, according to the Kaiser Family Foundation. Along with the 55% figure from 2014, these are the two years with the lowest percentage of employer health coverage since 1999.
At the same time, the year-over-year increase in healthcare costs continues to climb at disturbing rates. A recent Wall Street Journal (WSJ) article stated: “Healthcare costs at large US businesses are expected to rise 6% in 2017, according to an annual survey of 133 major companies offering coverage to more than 15 million Americans by the National Business Group on Health, or NBGH, a nonprofit association that focuses on employer-provided healthcare.”
There was another interesting milestone achieved in 2016 that involved consumers. The WSJ noted that, for the first time in the nation’s history, more than 51% of all workers covered by employer-provided health insurance will have an annual deductible of more than $1,000. This is for health plans covering a single person. Last, year, just 46% of single people with employer-provided health insurance had a deductible in excess of $1,000.
This is a significant development for clinical laboratories and anatomic pathology groups. It means that labs must become better at collecting most, or all, of the bill for lab tests directly from these patients. However, few labs have procedures and systems in place to collect payments from patients when they come to the lab to provide specimens.
Premiums Rise as the Affordable Care Act Shuffles Insurance Markets
Trends in data from Section One of the Kaiser Family Foundation’s “2016 Employer Health Benefits Survey” show annual premium increases in both single coverage and family coverage plans across the past eight years. In 2008, the average single coverage premium was $4,704 with family coverage priced at $12,680. Results from 2016 show an increase to $6,435 and $18,142 respectively.
The news isn’t all bad. Although consumers and businesses rarely welcome any premium increases, the Kaiser Family Foundation notes that premium rates are increasing at a slower rate than during previous administrations. “The 27% premium growth in the last five years (2010 to 2015) is significantly smaller than the 69% premium growth seen between 2000 and 2005,” the KFF report states. This, however, could be due to other consumer costs increasing instead.
Consumers Facing Higher Deductibles and Increased Payments for Cost Sharing
Using data from the Truven Health Analytics MarketScan Commercial Claims and Encounters Database, the Peterson-Kaiser Health System Tracker reported an increase in the size of deductibles since 2008. During the first six years of the two Obama terms, average deductibles grew from $163 to $353—an increase of 116.6%. (See “Payments for Cost Sharing Increasing Rapidly Over Time,” April 12, 2016.)
The Peterson-Kaiser report noted, “While average payments towards deductibles are still relatively low in the context of total household budgets, they have increased quite rapidly. Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers are showing concern about their out-of-pocket costs for care.”
This increase is further compounded by the fact that more people are now subject to deductibles. This trend was reported in Section Seven of the KFF Employer Benefits Survey, which notes that the number of workers enrolling in plans requiring a deductible also has increased. In 2008, only 65% of all survey respondents reported having an annual deductible. By 2015, that number grew to 82%.
These trends combine to show how spending has shifted toward consumers and businesses in the past eight years. When costs rise, consumers avoid tests and office visits that they deem unnecessary, which will not only impact health spending, but determine what laboratories might encounter heading into the next administration.