Families’ out-of-pocket medical costs fell after the Affordable Care Act, but not their premiums: Harvard researchers

New study is the first to estimate nationwide changes in household medical spending after the ACA, finds cost burden shifted slightly from poorer to richer Americans

FOR IMMEDIATE RELEASE: Monday, January 22, 2018 at 11:00 a.m. EST

Contact: Clare Fauke,, 312-782-6006

Families' out-of-pocket medical expenses decreased in the first two years after the Affordable Care Act was implemented, but their premium payments rose, according to a new study by researchers at Harvard Medical School and the City University of New York at Hunter College published today in JAMA Internal Medicine. The savings on annual out-of-pocket expenses averaged $74 (12 percent), with poorer individuals seeing the biggest drop (21.4 percent) while those with higher incomes saw no change. In contrast, higher-income households bore the brunt of premium increases (23 percent), while premiums for other income groups didn't change significantly. Overall, households’ premiums rose by an average of $232 (or 12 percent). The findings indicate that the ACA shifted the spending burden from low- to higher-income households, and from out-of-pocket spending to spending on premiums.

The study analyzed national data on 83,431 non-elderly adults. The researchers compared households’ medical spending during the two years before and after the full implementation of the ACA in 2014. They assessed out-of-pocket outlays (any medical spending not covered by insurance) and premium contributions made by household members. In addition to analyzing how much families spent, the study examined “high-burden spending,” such as paying more than 10 percent of income (or 5 percent for low-income households) for out-of-pocket expenses. Premiums were considered “high-burden” if they exceeded 9.5 percent of income (the affordability threshold specified in the ACA). 

High-burden out-of-pocket spending fell by 20 percent overall, with the most substantial decrease seen among poorer individuals. In contrast, middle-income households (those with incomes between 250-400 percent of poverty) saw a 28 percent increase in high-burden premium spending, while other income groups experienced little change in this measure.

“Our findings suggest that the Affordable Care Act reduced out-of-pocket costs for many Americans,” said the study’s lead author, Dr. Anna Goldman, a primary care doctor at Cambridge Health Alliance and fellow at Harvard Medical School. “But the ACA didn't stem the steady rise in families' premiums. Overall, the law helped ease families' medical cost burden, but there is plenty of room for progress.”
“It's not surprising that the ACA's effects were modest,” continued Dr. Goldman. “Only 6.5 percent of Americans gained coverage through the ACA, while about 28 million remained uninsured. Moreover, efforts to make the ACA’s financing budget-neutral limited the generosity of subsidies and may have reduced the law’s potential to reduce medical spending.”

Dr. Steffie Woolhandler, a distinguished professor of public health at CUNY's Hunter College and lecturer in medicine at Harvard Medical School noted: “The ACA helped smooth out spending, and made it more predictable. Fewer families were left with high out-of-pocket costs when they were sick, but paid more in upfront premiums. But the law fell far short of what many nations with single-payer systems have achieved: universal, comprehensive, and affordable coverage.”

“We’re worried that recent moves by the administration and Congress to undermine the ACA will erase the gains we observed, or worse,” said senior study author Dr. Danny McCormick, an associate professor of medicine at Harvard Medical School and primary care physician at Cambridge Health Alliance. “The repeal of the ACA mandate, weakening of insurance standards, and erosion of Medicaid will punish many lower-income Americans,” concluded Dr. McCormick.

Out-of-Pocket Spending and Premium Contributions after Implementation of the Affordable Care Act” by Anna L. Goldman, M.D., M.P.A., Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., David H. Bor, M.D., and Danny McCormick, M.D., M.P.H., JAMA Internal Medicine, published online ahead of print January 22, 2018.


Physicians for a National Health Program ( is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.