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Effect of the Affordable Care Act Preventive Services Provision on Utilization and Out-of-Pocket Costs

Tuesday, June 14, 2016
Lobby (Annenberg Center)

Author(s): Joel Segel; Jeah Kyoungrae Jung; Chelim Cheong

Discussant:

Effect of the Affordable Care Act Preventive Services Provision on Utilization and Out-of-Pocket Costs

            An important component of the Affordable Care Act (ACA) is the provision that all private health plans cover a range of preventive care services with no cost sharing. This part of the law went into effect on March 23, 2010, although some additional preventive services for women such as contraceptive coverage went into effect on August 1, 2012. One exception to this provision for private insurance plans was for grandfathered plans, defined as plans that were in place before March 23, 2010 and made no significant changes to coverage. Since 2011 the number of grandfathered plans has been steadily decreasing although the percent of workers who are covered by grandfathered plans varies considerably by location and time.

            Initial studies have found somewhat limited effects of the coverage provisions on utilization particularly for cancer screening. Two potential factors explaining this are that many plans may have remained grandfathered leading to no change in cost sharing and the fact that many preventive services already offered low cost sharing thereby limiting the potential for changes in utilization.          

            Using 2007-2013 Medical Expenditure Panel Survey (MEPS) data, we estimate the effect of the ACA preventive care provisions on utilization, out-of-pocket spending, and the probability of having no out-of-pocket spending. Within the publicly available data we examine spending changes for mammography, well visits, vaccination, prescription smoking cessation, prenatal care, contraception, and drug/alcohol treatment. In addition we examine utilization for each of the preceding services as well as cervical cancer screening, PSA testing, colorectal cancer screening, blood pressure screening, and cholesterol screening. However, we are also in the process of obtaining restricted access data to further estimate changes in out-of-pocket spending for the latter set of services.

            Consistent with prior studies, preliminary results generally show modest, and often not statistically significant increases in the various types of preventive care utilization. A potential explanation for the modest effects is that we see relatively small decreases in the out-of-pocket price paid by individuals, with nearly all changes under $10 on average. Despite this, the proportion of individuals facing zero out-of-pocket costs increases significantly suggesting that one of the main, initial effects of the law is to reduce modest baseline cost-sharing to zero. Finally, we find one of the other potential factors affecting the rate of preventive care utilization is whether a plan is grandfathered or not. We find statistically significantly higher rates of utilization in regions that have fewer individuals covered by grandfathered plans. Overall this suggests that changes in preventive care utilization have been modest following the ACA because of relatively modest cost sharing at baseline but that utilization rates may continue to increase as more individuals move out of grandfathered plans and into plans with no cost sharing for preventive services.