ACA, Medicaid Expansion Reduced Income Inequality, SDOH By 10%

Affordable Care Act (ACA) expansion led to reduced income inequality, especially in states that enhanced Medicaid, according to a new study published in Health Affairs.

Additionally, the ACA reduced within-group and between-group income inequality based on the following social determinants of health: race/ethnicity, age, and family educational attainment.

The researchers’ evidence warns of a reversal in reduced inequality if efforts to repeal the ACA like California v. Texas come to fruition. Based on a projection that accounts for COVID-19, more than twenty million people would lose health insurance if the ACA were to be repealed.

To determine the law’s impact on income inequality, researchers from the Urban Institute compared income measures that incorporated the value of ACA’s health insurance expansion to baseline measures in a scenario without the ACA. Overall, the ACA, relative to a scenario without the ACA, reduced income inequality by 10.6 percent.

The ACA increased average income for all but the top three income percentiles. Those in the tenth percentile of the federal income level saw an 18.8 percent increase in income. Average income increased by 13 percent, 8.4 percent, and 8.4 percent for those in the twentieth, thirtieth, and fortieth income percentiles, respectively.

When breaking the data down into social determinants of health categories, the study revealed that the ACA reduced inequality across the board.

Inequality decreased by 8.5 percent overall between race/ethnic groups. In states with Medicaid expansion, researchers saw even larger inequality reductions (10.2 percent) for this category. In terms of age, between-group inequality declined by 5.3 percent overall and 8.1 percent in Medicaid expansion states. Lastly, educational attainment inequality declined by 9.3 percent between-groups.

Additionally, inequality decreased significantly within each social determinant of health category. Inequality decreased most within the race/ethnicity category for American Indians/Alaska Natives, Hispanics, and Black non-Hispanics.

Within age groups, the youngest cohort  ages 18 to 24 saw the largest decline in inequality at 23.5 percent in Medicaid expansion states. In contrast, adults ages 55 to 64 saw the largest decline in within group inequality (15.8 percent) in nonexpansion states. This reflects the age distribution of Medicaid enrollees who are generally younger, the researchers noted.

Within-group inequality declined for each educational attainment group. Once again, larger reductions were observed in Medicaid expansion states.

Through this analysis, the researchers warn of significant increases in uncompensated care costs if the ACA is repealed, particularly for those with low and middle incomes, who are chief beneficiaries of the law.

Additionally, eliminating the ACA could worsen other outcomes, such as self-reported health and access to primary care and prescription drugs.

“Prior studies found that through 2015, the ACA substantially increased the share of nonelderly people who reported having a personal physician (3.5 percentage points) and easy access to medicine (2.4 percentage points) and decreased the share who reported being in fair or poor health (3.4 percentage points) and who reported that they could not afford care (5.5 percentage points) relative to the pre-ACA trend.”

Additionally, from the third quarter of 2013 to the first quarter of 2017, there were significant increases in the number of adults who had a routine checkup in the past year. Rates of self-reported unmet medical needs and difficulties paying medical bills also both declined.

“Without the valuable components of health insurance coverage provided by the ACA, income inequality as measured inclusive of various health coverage benefits would revert to pre-ACA levels. The ACA reduced income inequality between racial/ethnic groups, age groups, and people of higher and lower educational attainment. Overturning the law would put these gains in serious jeopardy,” the researchers noted.