New Report: Increasing Health Insurance by Reducing ACA Crowd-Out

New data show a large share of Affordable Care Act spending went to people who already had health insurance.

NEW YORK, NY (1/23/18) – It is usually the case that public health-care entitlements in the U.S. have been designed to supplement rather than to supplant privately purchased health insurance. However, as a new report by Chris Pope demonstrates, a large share of the entitlement funds disbursed under the Affordable Care Act (ACA) have gone to individuals who already had private coverage.

This displacement of private-sector spending by public-sector activity is called “crowd-out.” While the ACA has reduced the number of Americans without health insurance, its spending has been poorly-targeted to fill gaps in care, and 28 million remain uninsured.  

Pope’s other findings include:

• About 40% of the entitlement funds disbursed under the Affordable Care Act have gone to individuals who already had private coverage.
• If states reduced ACA crowd-out by only 25%, this would provide an additional $10 billion per year for them to extend health insurance coverage to the currently-uninsured.

Pope argues that Congress should consider block-granting the ACA’s entitlement funding to states in proportion to the total number of low-income individuals in each state. Even a small reduction in crowd-out could allow states to finance an expansion of coverage.

Click here to read the full report.