Many Californians Have Lower Insurance Costs Thanks to Health Reform

Californians who purchase their own health insurance spent less on health care in the first year of the Affordable Care Act’s full implementation, showing that the federal law has had an effect, a new report finds.

Those who bought insurance through the individual marketplace spent nearly $2,500 less on health care in 2014, the year health reform created the state exchange known as Covered California, according to the California Health Care Foundation report.

The median out-of-pocket spending for families with individual coverage was $7,345 in 2013, but it dropped to $4,893 in 2014.

Much of the decrease is due to insurance tax credits and subsidies that were available in 2014, researchers found.

The new law appears to have also helped families who have high health costs and spend more than 10 percent of their household income on care. About 42.9 percent of Californians reported that they spent at least that much in 2013, but a year later the percentage had fallen to 34.5.

Nationally health care spending among those with individual coverage declined as well, but in California the cost savings was more pronounced, researchers found.

In 2014, 2.2 million Californians had individual health coverage and 51 percent of them purchased it through Covered California. Of those who enrolled in Covered California plans, 90 percent were eligible for tax credits and more than half were eligible for additional subsidies, according to the report.

Although health reform has helped lower insurance costs, they remain too high for many families, the researchers said.

“Even with the substantial declines in their spending, more than one in three with individual coverage still spent more than 10 percent of their income on health care,” the report states. “Cost was the top reason reported by California’s uninsured for not obtaining coverage in 2014.”

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