Assessing Effects of the Affordable Care Act’s Marketplaces on Adults with Chronic Conditions

Research Objective: Before the Affordable Care Act (ACA), people with chronic conditions were typically denied coverage or faced high, experience-rated premiums or preexisting condition exclusions in the nongroup market. Expanding access to nongroup coverage for these individuals while keeping premiums affordable was thus a key objective of the ACA. Recent policies threaten to undermine ACA provisions designed to include healthier and sicker individuals in a single risk pool, yet relatively little is known about the medical needs of people with nongroup coverage who would be affected by these policies. For this study, we examined the health status and health care experiences of adults covered by nongroup plans within and outside of the Marketplaces.

Study Design: The study draws on 2012-2015 Medical Expenditure Panel Survey (MEPS) data and focuses on adults ages 18 to 64. We analyzed changes over time in nongroup coverage for this age group. We then estimated changes between pre- and post-ACA implementation periods in the treated prevalence of chronic conditions among adults with nongroup coverage, based on diagnosed conditions that were linked to health care provider visits and prescription drug fills. We also compared treatment for chronic conditions by coverage type (Marketplace, other nongroup, employer-sponsored, and public); other measures of interest included disability status, service use, spending, and sources of payment for care. Because open enrollment periods vary by coverage type, the analysis focused on service use and treatment occurring in the last six months of the year among those with continuous coverage during that period.

Key Findings: The share of nonelderly adults reporting nongroup coverage more than doubled following ACA implementation, with all enrollment growth occurring through the Marketplaces. Between the pre- and post-ACA implementation periods, there were increases in the shares of nongroup enrollees who were treated for multiple chronic conditions and who were in the top decile of spending for this age group. These changes were driven primarily by the poorer health of adults with Marketplace coverage, many of whom were uninsured prior to ACA implementation. In 2014-2015, nearly 45 percent of Marketplace enrollees were treated for a chronic condition during the reference period, compared with 35 percent of those with non-Marketplace nongroup coverage and 38 percent of those with employer coverage. Relative to other privately insured adults, those with Marketplace coverage were more likely to have been treated for multiple chronic conditions and had higher service use, and most of their spending was covered by private insurers.

Policy Implications: The Marketplaces expanded coverage for adults with chronic conditions, but their higher service use has contributed to rising nongroup premiums. Policymakers seeking to address this challenge face a choice between proposals that aim to strengthen the ACA’s risk pooling arrangements and proposals to concentrate the risk of high costs among those with the greatest medical needs. The outcome of these policy decisions will have a significant impact on a vulnerable population of adults who depend on Marketplace coverage to treat their chronic conditions.