ACA Case Studies

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of the stool: government subsidies to make insurance affordable for lower income families. Under the ACA, these subsidies come in two forms. The first is an expansion of the Medicaid program to all individuals with incomes below 133 percent of the poverty line (which is $10,830 for individuals and $22,050 for a family of four). The second is tax credits to offset the cost of private non-group insurance. These tax credits are designed to cap the share of income that individuals have to spend to get insurance, beginning with a cap at 3 percent of income at 133 percent of the poverty level and rising to a cap of 9.5 percent of income at 300 percent of the poverty level (and remaining at 9.5 percent until 400 percent of the poverty level).…show more content…
There are dozens of other provisions in the ACA that are not reviewed here as well, on topics ranging from incentives for improving the quality of health care, to a new social insurance program for long-term care, to incentives to increase primary care provision, and so on. III. THE MASSACHUSETTS CASE STUDY Projecting the impacts of a fundamental reform such as that described above is an enormous challenge. The effects of the ACA will depend on dozens of behavioral responses by firms and individuals (as well as state governments). There are several decades of empirical 8 research in health economics that can help inform our understanding of these behavioral responses; Gruber (2002) provides a review of some of that evidence. But this past evidence is by necessity based on changes to the existing health insurance environment, and may not be fully indicative of the impacts of a fundamental change in the environment as sweeping as ACA. A. The Massachusetts Experiment Fortunately, our understanding of the impacts of the ACA can be further informed by…show more content…
B. Results The results of the Massachusetts reform have been encouraging along a number of dimensions.3 First, there has been a dramatic expansion of health insurance coverage in the state. The data vary across sources, with state-level data from the Current Population Survey (CPS) showing a 60 percent decline in the uninsured since 2006 — over a period of time where the share of the national population without insurance was rising by 6 percent — and data collected by the state’s Division of Health Care Finance and Policy showing a decline of 70 percent.4 Either number indicates a sizeable reduction in the number of uninsured, with Massachusetts having by far the lowest uninsurance rate in the nation. A major concern with such a large expansion in access to care is that it will cause congestion on the supply side of the market. Indeed, many have argued that we have a chronic shortage of primary care physicians in the United States and that expanding coverage will only worsen that shortage. This has not been the case in Massachusetts, however. A recent study

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