presentation: the affordable care act: seven years later · aca = affordable care act; chip =...
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The Affordable Care Act:Seven Years Later
Jason FurmanSenior Fellow, PIIE
Peterson Institute for International Economics | 1750 Massachusetts Ave., NW | Washington, DC 20036
The Century FoundationWashington, DCMarch 23, 2017
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
Uninsured Rate Has Fallen to the Lowest Level on Record
ACA = Affordable Care Act Note: Estimate for 2016 reflects only the first three quarters. Other estimates are full-year.Sources: National Health Interview Survey and supplemental sources described in Council of Economic Advisers, 2014, “Methodological Appendix: Methods Used to Construct a Consistent Historical Time Series of Health Insurance Coverage” (http://go.wh.gov/5oRwjJ).
2016
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Uninsured Rate, 1963–2016Percent
Creation of Medicare and
Medicaid
ACA First Open Enrollment
Both Younger and Older Adults, as Well as Kids, Have Seen Substantial Coverage Gains
ACA = Affordable Care Act; CHIP = Children's Health Insurance Program; CHIPRA = Children's Health Insurance Program Reauthorization Act Note: Estimates for 2016 reflect only the first three quarters. Estimates of the uninsured rate for 0-18 year olds have not yet been reported for 2016, so the uninsured rate for 0-18 year olds reported in Figure 4-5 was calculated by extrapolating the 2015 estimate using the percentage point change for 0-17 year olds, which has been reported. Similarly, estimates of the uninsured rate for 26-64 year olds were extrapolated using the percentage point change for the larger group consisting of 18 year olds and 26-64 year olds.Sources: National Health Interview Survey; Council of Economic Advisers calculations; author's calculations.
Children (<19)
Non-Elderly Adults, Except Young Adults (26-64)
Young Adults (19-25)
2016
0
5
10
15
20
25
30
35
40
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Uninsured Rates by Age, 1997–2016Percent Uninsured
CHIP Created Year Prior to
CHIPRA Enactment
Year of ACA DependentCoverage Expansion Year
Before First ACA
Open Enollment
Uninsured Rate Has Fallen for All Income Levels
Sources: National Health Interview Survey; Council of Economic Advisers calculations.
0
10
20
30
40
< 138 138 to 400 > 400
2013 2015
Non-ElderlyUninsured Rate by IncomePercent Uninsured
36% reduction
33% reduction
31% reduction
Income as a Percent of the Federal Poverty Line
States that Expanded Medicaid Have SeenMuch Larger Gains in Health Insurance Coverage
Note: States are classified by Medicaid expansion status as of July 1, 2015.Sources: American Community Survey; Council of Economic Advisers calculations.
CAKY
MA
NV
FL
TX
VA
0123456789
10
0 2 4 6 8 10 12 14 16 18 20 22 24
Decline in Uninsured Rate from 2013 to 2015 vs. Level of Uninsured Rate in 2013, by State
Decline in Uninsured Rate from 2013 to 2015 (Percentage Points)
Uninsured Rate in 2013 (Percent)
Medicaid Expansion States
Medicaid Non-Expansion States
Expanded Coverage is Improving Access to Care,Financial Security, and Health
Note: Sample limited to non-elderly adults. Percentage points denoted as p.p.Sources: Behavioral Risk Factor Surveillance System; Council of Economic Advisers calculations.
-1
0
1
2
3
4
5
6
7
0 2 4 6 8 10 12 14
Decline in Share Not Seeing a Doctor Due to Cost vs.Decline in Uninsured Rate, by State, 2013–2015
Decline in Share Not Seeing a Doctor Due to Cost, 2013–2015 (p.p.)
Decline in Uninsured Rate, 2013–2015 (p.p.)
Millions More Workers Are Now ProtectedAgainst Unlimited Out-of-Pocket Spending
Source: Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey 2016.
2016
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Share of Workers in Single Coverage Without anOut-of-Pocket Limit, 2006–2016
Percent of Enrolled Workers
Share of Workers in Single Coverage Without anOut-of-Pocket Limit, 2006–2016
Percent of Enrolled Workers
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
Projections of National Health Expenditures Have Fallen Sharply
ACA = Affordable Care Act Note: Pre-ACA projections have been adjusted to reflect a permanent repeal of the sustainable growth rate following the methodology used by Stacey McMorrow and John Holahan (2016, “The Widespread Slowdown in Health Spending Growth Implications for Future Spending Projections and the Cost of the Affordable Care Act, An Update,” Washington: Urban Institute, and Princeton: Robert Wood Johnson Foundation). For consistency, actuals reflect the current estimates as of the most recent projections release.Sources: National Health Expenditures Accounts and Projections; Council of Economic Advisers calculations.
Final Pre-ACA Projections
2019
Actuals and Most Recent Projections
17
18
19
20
21
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Projected National Health Expenditures, 2010–2019National Health Expenditures as a Percent of GDP
Health Care Prices Have Risen at the Slowest Rate in 50 Years Since the ACA Was Enacted
ACA = Affordable Care Act Sources: National Income and Product Accounts; author's calculations.
Health Care Goods and
Services
All Consumers Goods and
Services
Jan-2017
-2
0
2
4
6
8
10
12
14
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Health Care Price Inflation vs. Overall Inflation, 1960–2017
Year-Over-Year Inflation Rate
Health Care Spending Per Enrollee Has GrownExceptionally Slowly in Public & Private Sectors
Note: Medicare growth rate for 2005–10 was calculated using the growth rate of non-drug Medicare spending in place of the growth rate of total Medicare spending for 2006 to exclude effects of the creation of Medicare Part D. Inflation adjustments use the GDP price index.Sources: National Health Expenditure Accounts; National Income and Product Accounts; Council of Economic Advisers calculations.
6.5
4.7
0.5
3.42.4
-0.2
1.5
-0.3 -0.3
-3-2-1012345678
Private Insurance Medicare Medicaid
2000–2005
2005–2010
2010–2015
Real Per Enrollee Spending Growth, By Payer, 2000–2015
Average Annual Percent Growth
The Pace of Deductible Growth Has Been Similar to the Pace Prior to the ACA
ACA = Affordable Care Act; KFF/HRET = Kaiser Family Foundation/Health Research and Educational Trust Note: Inflation adjustments use the GDP price index, including a Congressional Budget Office projection for 2016.Sources: Medical Expenditure Panel Survey, Insurance Component; KFF/HRET Employer Health Benefits Survey 2016; National Income and Product Accounts; Council of Economic Advisers calculations.
KFF/HRET Employer Health Benefits Survey
Medical Expenditure Panel Survey, Insurance
Component
2016
0
300
600
900
1,200
1,500
2002 2004 2006 2008 2010 2012 2014 2016
Average Real Deductible in Employer-Based Single Coverage, 2002–2016
Average Real Deductible (2016 Dollars)
Continuation of 2002-2010 Trend
Continuation of 2002-2010 Trend
Cost Growth Has Slowed in Employer Coverage—Even More When Out-of-Pocket Costs Are Included
Note: Out-of-pocket costs were estimated by first using the Medical Expenditure Panel Survey to estimate the out-of-pocket share in employer coverage for 2000–2014 and then applying that amount to the premium for each year to infer out-of-pocket spending. The out-of-pocket share for 2015 and 2016 was assumed to match 2014. Inflation adjustments use the GDP price index. GDP price index for 2016 is a Congressional Budget Office projection.Sources: Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey 2016; Medical Expenditure Panel Survey, Household Component; Council of Economic Advisers calculations.
5.6
7.2
5.1 5.2 5.1
3.1 3.1 3.1
1.52.4
0
1
2
3
4
5
6
7
8
TotalPremium
EmployeeContribution
EmployerContribution
2000–2010
2010–2016
Growth in Real Costs for Employer-Based Family Coverage, 2000–2016
Average Annual Percent Growth
Premiums for Family Coverage
Worker Contribution + Estimated
Out-of-Pocket Cost
Total Premium + Estimated
Out-of-Pocket Cost
Alternative Payment Models Can Improve the Performance of the Health Care Delivery System
Note: The dates and percentages for the actual series are approximate.Source: Centers for Medicare and Medicaid Services.
Actual
Obama Administration
Goals
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Percent of Traditional Medicare Payments Tied to Alternative Payment Models, 2010–2019
Percent of Payments
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
The Quality of Care Received by Hospital Patients Has Improved Since 2010
Sources: Agency for Healthcare Research and Quality; Council of Economic Advisers calculations.
0
-2
-9
-17 -17
-21
-25
-20
-15
-10
-5
0
2010 2011 2012 2013 2014 2015
Cumulative Percent Change in Rate of Hospital-Acquired Conditions Since 2010, 2010–2015
Cumulative Percent Change in Rate of Hospital-Acquired Conditions Since 2010
Hospital Readmission Rates Have Fallen Sharply in Recent Years
Sources: Centers for Medicare and Medicaid Services; Council of Economic Advisers calculations.
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
The Private Sector Has Added 16.2 Million Jobs in 84 Consecutive Months of Job Growth Since the
Affordable Care Act Became Law
Sources: Bureau of Labor Statistics, Current Employment Statistics; author's calculations.
-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
2008 2010 2012 2014 2016
Monthly Gain in Private-Sector Payroll Employment, 2008–2017Job Gain/Loss
Feb-2017
Twelve-Month Moving Average
Almost All of the Net Increase In Employment Since the ACA Became Law Has Been in Full-Time Jobs
ACA = Affordable Care Act Sources: Bureau of Labor Statistics, Current Population Survey; author's calculations.
Full-Time Workers
Feb-2017
Part-Time Workers
-2
0
2
4
6
8
10
12
14
16
2010 2011 2012 2013 2014 2015 2016 2017
Change in Number of Full-Time and Part-Time Workers Since March 2010, 2010–2017
Millions of Workers
22
52
7782 82
0
10
20
30
40
50
60
70
80
90
100
Poor Fair Good Very Good Excellent
Panel A: Share with Any Wage or Salary Earnings Percent of Prime-Age Adults with Earnings
Self-Reported Health Status
People Reporting Better Health Have Higher Employment Rates and Earnings
Sources: Current Population Survey; Council of Economic Advisers calculations.
36,000 39,000
47,000
55,000 61,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Poor Fair Good Very Good Excellent
Panel B: Average Earnings, People With Earnings Average Wage and Salary Earnings
Self-Reported Health Status
Employment Outcomes for Prime Age Adults, by Health Status, 2015
The ACA, Along With Other Tax Policies, Has Contributed to Reducing After-Tax Inequality
ACA = Affordable Care Act Source: US Treasury, Office of Tax Analysis.
-1.0-0.8-0.6-0.4-0.20.00.20.40.60.8
Change in Share of After-Tax Income by Income Percentile: Changes in Tax Policy Since 2009 and ACA
Coverage Provisions, 2017 Change in Share of After-Tax Income (Percentage Points)
Income Percentile
CBO Estimates that the Affordable Care ActSubstantially Improved the Long-Term Budget
Outlook
CBO = Congressional Budget OfficeNote: CBO reports second-decade effects as a share of GDP. Amounts are converted to dollars using GDP projections from CBO's long-term budget projections.Sources: CBO; Council of Economic Advisers calculations.
-5,000
-4,000
-3,000
-2,000
-1,000
0
2016–2025 2026–2035
Deficit Reduction Due to the Affordable Care Act, 2016–2035
Change in the Deficit (Billions)
-$353 Billion
Reduction of Around $3.5 Trillion
The Life of the Medicare Trust Fund Has Been Extended by 11 Years Since the ACA Became Law
Source: Medicare Trustees.
2016
2016
2018
2020
2022
2024
2026
2028
2030
2032
2000 2002 2004 2006 2008 2010 2012 2014 2016
Forecasted Year of Medicare Trust Fund Exhaustion, 2000–2016
Year of Exhaustion of the Medicare Hospital Insurance Trust Fund
Outline
I. Coverage
II. Cost
III. Quality
IV. Economic Performance
V. Marketplace Stability
Marketplace Premiums Have Converged to CBO’s Prediction
CBO = Congressional Budget OfficeSource: Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (2013; 2016).
-16
1
-20
-15
-10
-5
0
5
10
2014 2017
Actual Marketplace Premiums vs. CBO ProjectionDifference as a Percent of CBO Projection
Some of the Large Premium Increases Likely Reflect Initial Underpricing by Insurers
Note: Premiums analyzed at the county level. Quintiles defined to have equal non-elderly populations. Data limited to states using HealthCare.gov in all years.Sources: Department of Health and Human Services; American Community Survey; Council of Economic Advisers calculations.
0
3
6
9
12
15
18
1 (Lowest) 2 3 4 5 (Highest)
Annual Change in Benchmark Premium, by Quintile of 2014 Benchmark Premium, 2014–2017
Median Annual Percent Change in Benchmark Premium, 2014–2017
Quintile of 2014 Benchmark Premium
States With Larger Premium Increases Have Not Seen Larger Decreases in Enrollment
Note: Figure includes states that used the HealthCare.gov platform in both 2016 and 2017. The black line portrays the estimated relationship from regressing the log change in plan selections on the log change in the benchmark premium. The red line portrays a relationship with the same intercept and a slope coefficient of -2. This slope coefficient would permit a death spiral if claims costs for enrollees discouraged by higher premiums were half or less the costs of other enrollees, a relatively extreme assumption. Sources: Department of Health and Human Services; Matt Fiedler, 2017, “New Data on Sign-ups Through the ACA’s Marketplace Should Lay “Death Spiral” Claims to Rest,” Washington: Brookings Institution (https://www.brookings.edu/blog/up-front/2017/02/08/new-data-on-sign-ups-through-the-acas-marketplaces-should-lay-death-spiral-claims-to-rest/).
-100
-80
-60
-40
-20
0
20
40
-10 0 10 20 30 40 50 60 70 80 90 100 110 120
Change in Marketplace Plan Selections vs. Change in Benchmark Premium, 2016–2017, by StatePercent Change in Plan Selections
Observed Relationship
Percent Change in Weighted Average Benchmark Premium
Relationship Required to Permit a "Death Spiral" Under
Pessimistic Assumptions
Most Marketplace Enrollees Are Fully Protected from Benchmark Premium Increases
Source: Council of Economic Advisers calculations.
$143 $143
$100 $150
0
50
100
150
200
250
300
350
Benchmark Premium= $243/Month
Benchmark Premium= $293/Month
Premium for the Benchmark Plan for an Individual Making $25,000 Per Year, 2017
Dollars per Month
Premium Tax Credit
Individual Contribution
The Affordable Care Act:Seven Years Later
Jason FurmanSenior Fellow, PIIE
Peterson Institute for International Economics | 1750 Massachusetts Ave., NW | Washington, DC 20036
The Century FoundationWashington, DCMarch 23, 2017