rapidly rose in both percentages and numbers over the period 2003-2010. Their analysis shows growing numbers of working-age adults who have such high out-of-pocket costs relative to their income that they are underinsured. The authors found that an estimated 29 million people, 16 percent of the adult population, were underinsured, up from 16 million, or about 9 percent, in 2003.

She said that these measures are based on the The Commonwealth Fund’s Biennial Health Insurance Survey with a dual frame landline and cell phone sample of 4,000 nonelderly persons. The underinsured were defined as spending 10 percent or more of their income on medical expenses, or 5 percent or more if their incomes were under 200 percent of poverty, or deductibles equal to 5 percent or more of income.

The Affordable Care Act (ACA) will significantly expand and improve health insurance coverage with the expansion in Medicaid, income-related premium tax credits, basic health care plans if states opt to implement one, and reduced cost-sharing to limit the risk of high out-of-pocket costs and also enable timely access to health care.

There are remaining risks, however. Households with low and moderate incomes may still be at risk of high costs depending on the design of health plans and the choices people make among health plans available to them, state health care spending growth, exemptions in the law of certain plans, grandfathered plans, and self-insured plans. Also, state implementation decisions, especially with respect to the exchanges, and state enforcement of insurance market reforms may affect the risk of high costs.

The Insurance Affordability Programs that will be available under the ACA beginning in 2014—Medicaid, the Children’s Health Insurance Program, the basic health plan, premium tax credits, and the cost-sharing protections for qualified health plans in the exchanges—will go a long way toward reversing the trends on underinsurance and on the uninsured, particularly for people with incomes under 250 percent of poverty for whom the protections are the greatest.

But even for higher income households, the limits on out-of-pocket spending, market reforms against underwriting the essential benefit package, and guaranteed issue and no preexisting condition exclusions will also offer new protections. Schoen and her colleagues estimated that the ACA could reduce the number of underinsured adults by 70 percent.

Some work published in a Commonwealth Fund issue brief of the ACA’s insurance expansions found that 90 percent of households with median out-of-pocket spending would have sufficient room in their budgets for both premiums and out-of-pocket costs after full ACA implementation (Gruber and Perry, 2011). Using data from the Medical Expenditure Panel Survey (MEPS) and the Consumer Expenditure Survey, they established a standard for necessities and then assessed whether there was sufficient



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