New data show major improvements in health care access, affordability, and quality under the Affordable Care Act

New studies released this week show Americans are experiencing slower growth in health care premiums, increased access to coverage, and higher quality of care under the Affordable Care Act (ACA).

• More Affordable: The average premium for families with employer-sponsored health plans grew just 3.4 percent in 2016, according to the Kaiser Family Foundation and Health Research and Educational Trust survey, extending a period of unusually slow growth since 2010. The White House Council of Economic Advisers calculates that the average family premium is $3,600 lower in 2016 than if premiums had grown at the same rate as the pre-ACA decade.
• Greater Access: New Census data show that the uninsured rate dropped in every state in the country between 2013 and 2015. In total, 20 million Americans have gained coverage thanks to provisions of the ACA, and the uninsured rate is at its lowest level ever.
• Better Quality: Hospital readmissions dropped 8 percent between 2010 and 2015. In 2015, that drop translated into about 100,000 times Medicare beneficiaries avoided an unnecessary return to the hospital. Cumulatively since 2010, Medicare beneficiaries have avoided 565,000 readmissions. 

“Affordability, access, and quality are how we measure success in the health care system,” said Secretary Sylvia Mathews Burwell. “This week’s data show our country is making progress on all three under the Affordable Care Act.”

Making Health Care More Affordable

An independent analysis released this morning by the Kaiser Family Foundation finds that the average family premium for the 150 million Americans with employer-sponsored health plans increased by only 3.4 percent in 2016. Since 2010, the average family premium has increased an average of 4.7 percent per year, compared to 7.9 percent from 2000 to 2010 – a 40 percent reduction in growth. That slowdown is saving American families $3,600 in 2016, compared to if premium growth had continued at pre-ACA rates.

Workers’ contributions to premiums have also increased an average of 4.7 percent per year since 2010, compared to 9.5 percent during the previous decade. Meanwhile, another Kaiser study found that total enrollee cost sharing (counting deductibles, coinsurance, and copayments) increased an average of 4.1 percent per year from 2010-2014, compared to 7.1 percent from 2004-2010.

Other metrics of health care cost growth have also slowed sharply since the ACA was enacted. For example, health care prices have grown at the slowest rates in 50 years, and Medicare spent $473 billion less from 2009 to 2014 than it would have if previous spending trends had continued. As independent experts have noted, the ACA has contributed to the health care cost slowdown through Medicare provider payment reforms that have had spillover benefits for the rest of the health care system; through direct incentives for health care providers to improve quality and reduce costs, for example by reducing hospital readmissions and hospital-acquired infections; and by laying the groundwork for more fundamental delivery system reform. 

Expanding Access to Coverage

Last week, new data showed that the national uninsured rate fell to a record low of 8.6 percent in the first quarter of 2016, following the Health Insurance Marketplace’s third open enrollment season. Yesterday, the Census Bureau released its first detailed data on how the ACA’s coverage expansions impacted insurance coverage in 2015, including data on trends in insurance coverage in every state in the country. The Census’ national data confirmed earlier estimates that rapid gains in insurance coverage continued in 2015. Notably, the new Census data show that the uninsured rate fell in every state in the country from 2013 to 2015.

The dramatic drop in the uninsured rate reflects the combined effects of the ACA’s coverage reforms, including the creation of the Health Insurance Marketplace, tax credits that help families afford coverage, the end of coverage exclusions for people with pre-existing conditions, letting young adults remain enrolled on their parents’ plans, and 31 states’ decision to expand Medicaid coverage. If the 19 remaining states adopted the ACA’s expansion of Medicaid, an additional 4.1 million residents would gain coverage, according to Urban Institute estimates.

These gains are on top of other improvements in access to coverage and care thanks to the ACA. For example, no matter where they get their health insurance, consumers now have access to free preventive services, and their plans now have limits on out-of-pocket costs and no annual or lifetime limits on coverage.

Improving the Quality of Care

Beyond gains in affordability and access, the ACA is also helping deliver better outcomes for patients. For example, hospital readmission rates have fallen sharply as new incentives put in place by the ACA took effect. New data released yesterday by the Centers for Medicare and Medicaid Services show that hospital readmissions dropped in 49 states plus the District of Columbia since 2010. That means that Medicare beneficiaries avoided about 100,000 readmissions just in 2015, compared to if readmissions had stayed constant at 2010 rates.  

Programs that prevent unneeded readmissions are just one part of the Administration’s broader strategy to improve the health care delivery system by paying providers based on the results they achieve, unlocking health care data, and finding new ways to coordinate care and improve quality. Thanks primarily to the ACA, more than 30 percent of traditional, or fee-for-service, Medicare payments now flow through alternative payment models that reward quality over quantity. This is helping to catalyze a system-wide shift toward better care, smarter spending, and healthier people.