ACA Impact on Medicare Beneficiaries Linked to Reduced Costs, Improved Health

The Affordable Care Act (ACA) led to reductions in out-of-pocket costs and improvements in health among adults entering Medicare. | Image Credit: zimmytws - stock.adobe.com

Adults with low socioeconomic status who transitioned to Medicare experienced reductions in out-of-pocket medical costs and improvements in health under the Affordable Care Act (ACA), particularly in states that expanded Medicaid coverage, according to a study published in JAMA Health Forum.¹

For over 3 decades, most high-income countries including the US have experienced worsened all-cause midlife mortality rates,² despite the fact that they have improved life expectancy for more than 100 years, with a steady pace of almost 2.5 years per decade. Increased midlife mortality rates were linked to rises in cardiovascular conditions, along with despair-related causes such as substance use or suicide. Notably, women aged 25 to 44 years in the US had higher all-cause mortality rates in 2019 compared with 1990.

Alongside these mortality trends, Americans are reporting reduced daily health-related functioning, especially among individuals with limited educational attainment and low socioeconomic status, ultimately exacerbated by the COVID-19 pandemic.¹

Experts have previously discussed the impact health insurance has on patients’ access to care services along with improved health-related outcomes.³ Improvements are especially recognizable across populations of adults aged 65 years or older, as Americans have become eligible for Medicare coverage at age 65, even before the ACA was implemented.¹ Medicaid expansion was introduced as part of the ACA 10 years ago, giving states the option to include coverage for low-income adults aged 19 to 64 years.³ Current research shows that Medicaid expansion has led to improved access, financial security, and economic benefits for states and providers.

This increased access to care for midlife adults could enable their providers to better detect, improve, and manage health risks while potentially preventing costly outcomes like emergency department (ED) visits over the long term.¹ The cross-sectional analysis of the Health and Retirement Study (HRS), linked with Medicare enrollment and claims data, examined whether the ACA’s coverage expansions to midlife adults led to changes in health, use of health care, and out-of-pocket costs after they enrolled in Medicare at age 65.

The final HRS analytic sample was composed of 2782 adults with low income who recently entered Medicare after age 65. There were 938 older adults in the linked Medicare claims analysis; 59.1% identified as women and 40.9% identified as men. Race and ethnicity were reported as Hispanic (10.8%), non-Hispanic Black (10.8%), non-Hispanic White (75.7%), and other (2.8%). Educational attainment consisted of a high school education or below (57.5%), some college (24%), and a college degree or above (18.5%).

Adults who entered Medicare after the ACA were less likely to report using medications for chronic diseases, had fewer annual hospitalizations, and had decreased self-reported out-of-pocket costs over 2 years. There were no significant differences noted in health status, outpatient or ED visits, or Medicare costs between treatment and comparison cohorts.

Using a difference-in-differences analysis, the study found that adults aged 65 to 68 years in Medicaid expansion states experienced significantly greater reductions in self-reported limitations in daily living activities and out-of-pocket medical costs compared with their counterparts in states without Medicaid expansion. These improvements were observed among individuals who were exposed to the ACA's effect because Medicaid expansion took place before they turned 65 years old.

The study authors note that their small sample size limits the statistical power. Additionally, fee-for-service claims were the only Medicare claims available for assessment of utilization measures, so the authors could not assess the outcomes of those who selected Medicare Advantage.

In discussing the policy implications of these findings, the researchers note that enhanced Marketplace subsidies under the Inflation Reduction Act are set to expire in 2025, necessitating Congressional action to maintain them. Prior policy recommendations have advocated for reducing the Medicare eligibility age to facilitate continuous health insurance coverage for individuals who leave the workforce before reaching the traditional eligibility age of 65, which could serve to expand access to health care in these midlife yearsin addition to what has been accomplished by the ACA reforms.

“Insurance coverage and financial assistance should be preserved and enhanced to improve health and health care access among vulnerable middle-aged and older adults,” study authors concluded.

References

1. Tipirneni R, Roberts ET, Levy HG, et al. Health care utilization and costs for older adults aging into Medicare after the Affordable Care Act. JAMA Health Forum. 2025;6(1):e245025. doi:10.1001/jamahealthforum.2024.5025
2. Dowd JB, Doniec K, Zhang L, Tilstra A. US exceptionalism? International trends in midlife mortality. Int J Epidemiol. 2024;53(2). doi:10.1093/ije/dyae024
3. Advancing health care access and affordability: key takeaways from the 2024 legislative session. National Conference of State Legislatures. November 18, 2024. Accessed January 16, 2025. https://www.ncsl.org/health/advancing-health-care-access-and-affordability-key-takeaways-from-the-2024-legislative-session