There is much political debate about whether the Affordable Care Act (ACA) has improved healthcare for Americans. The Wharton University scholarly podcast Knowledge@Wharton recently featured Wharton health care management professor Atul Gupta discussing this topic. Gupta, who penned a paper titled “Estimating Effects of Public Insurance Expansion for Adults: Evidence from California Hospitals” with Mark Duggan and Emilie Jackson of Stanford University, used California ERs and hospitals from 2008-2015 as the backdrop to support their collective thesis.
The focus of the study was how the ACA’s expansion of Medicaid affected access to healthcare coverage. “Without going into the details, people who are below 21 had access to Medicaid coverage even before the Affordable Care Act, whereas people who were just over 21 aged out of Medicaid,” said Gupta. “They lost Medicaid coverage just because of the way the Medicaid rules were set up. But with the Affordable Care Act, this false discontinuity was eliminated. This gives us a nice, neat little experiment where people who are over the age of 21 now suddenly have access to Medicaid because of the Affordable Care Act. This allows us to answer this question of what happens when people suddenly get access to insurance coverage.”
Here’s what the study found:
The number of people ages 21 to 23 covered by Medicaid increased about 20%, but the decrease in uninsured was not of the same magnitude because people who are gaining Medicaid coverage were earlier covered by other forms of gaining insurance coverage, including county indigent programs. About 40% of the Medicaid expansion is going towards replacing county indigent insurance. This has resulted in county tax dollars being replaced by federal tax dollars.
There was a fairly robust change in where people were getting their health care. As people gain insurance coverage, they were more likely to choose private hospitals. This is a sign that once people have choices, they tend to choose better quality hospitals. “That’s a good sign because that suggests that people are now going to move towards higher-quality hospitals,” said Gupta.
It is too soon to find robust evidence of improvement in the quality of health. A review of mortality rates or a change in the share of hospitalizations that were potentially avoidable did not indicate any robust improvements, but did show some suggestive improvements. “I think the story really over there is that we might only have short-term effects right now because we only have two years of data post the expansions” said Gupta. “It’s possible that in the long term, some of these effects will become more visible in the data. Also, these effects are probably not large enough right now. For that reason, they’re pretty noisy.”
Gupta said this research was continuing to further examine the impacts of the ACA on health. However, he believes the healthcare law has already demonstrated value to Americans. “Even if we don’t find improvements in health outcomes, the fact that people are now able to choose better providers, better hospitals, better physicians — that’s a source of value.” said Gupta.
To listen to the podcast episode, click here.
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