Political Issues

The Affordable Care Act Protects 2 Million People From ‘Catastrophic’ Medical Debt Every Year

Erin Bunch

Photo: Getty Images / W+G Creative

New research shows that the Affordable Care Act (ACA), also known as Obamacare, has protected 2 million people from experiencing “catastrophic” health expenditures each year since its implementation in 2010.

The data, published in Journal of the American Medical Association, notes that the World Health Organization (WHO) defines catastrophic expenditures as bills exceeding 40 percent of the income left over after survival costs such as food and housing have been paid. The research also shows that these savings presented in the lowest-income quarter of the population. What’s more, the data revealed that those in that lowest income bracket who were privately insured (not through the ACA) actually had the highest rate of catastrophic spending among the demographic. In other words, Obamacare does more to protect folks from medical debt than private insurance.

This is no small win; medical costs are a huge burden in this country. In fact, a 2019 study showed that 60 percent of people who file for bankruptcy do so because of medical debt. And at a time when millions have lost their private insurance due to unemployment—not to mention their income—medical expenses can be more devastating than ever. The situation is further precarious because we’re in a pandemic, too, meaning that there is an added health risk at present that could be costly.

Given these factors, one could argue that having the option of coverage through the ACA is more important than ever. And yet, President Trump has asked the Supreme Court to overturn it—the case is scheduled to go before the court on November 10.

President Trump has long promised a replacement for ACA, and the announcement of his plan finally came on Thursday as “President Trump’s Healthcare Vision for America.” Basically, the “vision” purports to protect coverage for people with pre-existing conditions but will rely on congress to figure out how to do so if the ACA is overturned. It also directs congress to end surprise billing—when you visit a hospital inside your insurance network and some of the doctors treating you are out of network—by January 1. Finally, it pledges to send $200 prescription drug discount cards to 33 million Medicare beneficiaries in the next few weeks, though experts are not optimistic about the feasibility of this promise. (The ACA already makes covering people with pre-existing conditions the law.)

In other words, there is no real plan that would replace ACA were it to be overturned, meaning that 21 million people would lose insurance altogether. And unless Congress acts as Trump’s encouraging—but not forcing—them to act, 133 million people with pre-existing conditions would find their insurance threatened. It also means, based on this new research, that 2 million more people next year could potentially face catastrophic medical expenses—in the midst of a global pandemic. This would happen within the demographic already struggling the most to make ends meet. As usual, all eyes on the Supreme Court.

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