A study of medical bills under the Patient Protection and Affordable Care Act (ACA) determined that most households will be able to afford premiums and related expenses after paying bills for food, child care, transportation and other necessities, according to the Commonwealth Fund. The mission of The Commonwealth Fund is to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

Approximately 8.5 to nine percent of American families living closest to the poverty line could not afford basic necessities and typical medical bills proposed by the health reform law.  The ACA requires individuals to purchase insurance by 2014, although with occasional exceptions.  The ACA restricts household out-of-pocket costs and subsidizes plans available through insurance exchanges to people with low-incomes.  Fewer households in high cost-of-living states could afford healthcare expenses, according to the Commonwealth Fund study.  The report included projections of spending on necessities, premiums and out-of-pocket costs for households between the federal poverty line and 500 percent of the threshold.  Those insured by safety net or state run insurance exchanges were not factored into the study.

Even with implementation of the ACA, some families across all income levels would continue to struggle to afford coverage because of steep out-of-pocket costs.  According to the report, 17 percent of families of four earning up to $44,700; approximately 25 percent of families earning between $44,700 and $67,050, would struggle with healthcare costs.  The data examines costs in 2014, the first year the ACA will be fully implemented and the start of state-based health insurance exchanges.  The law provides federal subsidies for the lowest-income people to buy insurance.  Americans with incomes between 133 and 399 percent of the poverty level are eligible for income-based tax credits.  Some low-income people will be eligible for subsidies to make up for out-of-pocket costs.  Americans who make less than 133 percent of the poverty level are eligible for Medicaid.

“The Affordable Care Act is very good news for millions of Americans who are struggling to afford health care, going without health insurance, or skipping the care they need because they can’t afford it,” said Commonwealth Fund President Karen Davis. “The new law makes health insurance and health care affordable for nearly all families, and introduces delivery system reforms that have the potential to greatly improve quality and efficiency.  If implemented well, new entities like accountable care organizations may bring even greater savings and affordability than this report predicts.”

Although the Commonwealth report is positive about the likelihood that more families will be able to afford health insurance, Craig Pollack, M.D., M.H.S., assistant professor of medicine at Johns Hopkins, and Katrina Armstrong, M.D., from the University of Pennsylvania, are not as upbeat about the ACA.  The physicians warn that as a result of certain provisions in the ACA, wealthy hospitals and physician practices might “cherry-pick” similar institutions and create Accountable Care Organizations (ACOs).  In this way, they can avoid poor and minority-heavy patient populations who will be treated elsewhere to cut costs.  ACOs encourage patients to seek care within their own network, which highlights the disparities between networks.

According to Pollack, hospitals and physician practices that treat too many minorities may be unable to join ACOs and will fall further behind in the cost and quality of care that is likely to occur in such networks.  “There is ample evidence of racial and ethnic disparities in healthcare,” Pollack said.  “Hospitals and private practices that care for greater numbers of minorities tend to have larger populations of Medicaid and uninsured patients.  These patients have less access to specialists, and their hospitals and practices tend to have fewer institutional resources than their counterparts.”