Did Marketplace Coverage Really Offer Financial Protection? Financial Gains from the Affordable Care Act’s Private Insurance Policies for the Previously Uninsured

October 9, 2019

While the Affordable Care Act (ACA) expanded health coverage to millions of Americans, more than half of the people eligible for the law’s private insurance marketplace remained uninsured. Today, most of those who were uninsured when the ACA passed are still uninsured.

In a new working paper, Roosevelt Fellow Naomi Zewde suggests why: For a quarter of uninsured adults, it would be cheaper to file for bankruptcy than to meet the lofty deductibles of the ACA’s private insurance policies. Moreover, the catastrophic expenses that these high-deductible policies cover offer limited financial protection for the uninsured. Most uninsured people have few assets and usually can’t afford most of the hospitalization costs they face, while for-profit hospital consortiums enjoy being the main beneficiaries of high deductibles.

To promote financial security and increase ACA marketplace enrollment for uninsured Americans, policymakers must consider alternatives to this high-deductible, catastrophic coverage—and create a health care system that serves all Americans.