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Insurance Expansion can Improve Compliance

Gains in coverage led to increased prescription drug use, lower out-of-pocket costs. (Volume 9, Issue 40)

Out-of-pocket healthcare spending has always been an issue for Americans, especially for those with chronic health problems who have an increased need for prescription drugs. Under the ACA, uninsurance rates among patients who used prescription drugs dropped 30% due to the introduction of insurance Marketplaces, increased Medicaid eligibility, and an individual mandate to enroll. However, the question of how new enrollees, particularly those with chronic health conditions, used this new coverage requires an answer.

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Researchers tackled this question by looking at the number of prescriptions patients filled and the out-of-pocket spending for 6.7 million prescription drug users before and after implementation of the ACA. They identified individuals with five chronic conditions: diabetes, hormone therapy for breast cancer, depression or anxiety, asthma or COPD, and high cholesterol or triglycerides. They then looked at users’ prescription fills as a measure of utilization.

What they found was an increase in prescription drug use for people who gained insurance coverage, particularly those with at least one of the five study chronic conditions. For those that gained private insurance, there was a 28% increase in prescription filling and a 29% reduction in out-of-pocket spending. Those who gained Medicaid coverage showed even greater effects with an 80% increase in prescription filling and 58% reduction in out-of-pocket costs.

This study has important implications about ACA’s coverage expansion in a population of prescription drug users that have significant health care needs. Gains in coverage correspond to large increases in prescription use particularly among those with chronic conditions. This may reflect the fact that people are now able to treat newly diagnosed conditions or treat pre-existing conditions. Prior research has shown that increased out-of-pocket costs for drugs actually decrease compliance, which lead to worse health outcomes overall. By decreasing these financial barriers, as the ACA does, we could improve the use and adherence of drugs in the management of chronic medical conditions. Although this would require an increase in health plan and Medicaid spending, the costs may potentially be offset by reductions in long-term healthcare spending.

This Policy Prescriptions® review is written by Gail Tan as part of our collaboration with Baylor College of Medicine’s Health Policy Journal Club Elective. Ms. Tan is a first year medical student.


A growing body of literature describes how the Affordable Care Act (ACA) has expanded health insurance coverage. What is less well known is how these coverage gains have affected populations that are at risk for high health spending. To investigate this issue, we used prescription transaction data for a panel of 6.7 million prescription drug users to compare changes in coverage, prescription fills, plan spending, and out-of-pocket spending before and after the implementation of the ACA’s coverage expansion. We found a 30 percent reduction in the proportion of this population that was uninsured in 2014 compared to 2013. Uninsured people who gained private coverage filled, on average, 28 percent more prescriptions and had 29 percent less out-of-pocket spending per prescription in 2014 compared to 2013. Those who gained Medicaid coverage had larger increases in fill rates (79 percent) and reductions in out-of-pocket spending per prescription (58 percent). People who gained coverage who had at least one of the chronic conditions detailed in our study saw larger decreases in out-of-pocket spending compared to those who did not have at least one condition. These results demonstrate that by reducing financial barriers to care, the ACA has increased treatment rates while reducing out-of-pocket spending, particularly for people with chronic conditions.

PMID: 27534776 

Mulcahy, AW, et al. Health Affairs. 2016; 35 (9): 1725-33.