The Affordable Care Act (ACA) has lowered out-of-pocket expenses for low-income surgery patients, but has not lowered costs for middle-income surgery patients, according to new research.

  • After assessing the rates of catastrophic spending both before and after the ACA was implemented, low-income surgery patients saw their costs decline by one-third, but middle-income patients did not see any significant changes in their out-of-pocket costs.
  • One theory about why some patients paid catastrophic costs is not every patient took advantage of the marketplace subsidy, even if they were eligible.
  • Researchers defined catastrophic spending as the money surgery patients spent on premiums and out-of-pocket costs that are 20% or more of their household income.

As the healthcare policy debate includes a conversation about rising out-of-pocket costs for families, investigators recently found that the Affordable Care Act (ACA) has lowered out-of-pocket expenses for low-income surgery patients. However, the same benefit was not observed for middle-income patients.

Obtaining insurance through the ACA was associated with better financial protection among low-income surgical patients eligible for both cost-sharing and premium subsidies, but not for middle-income patients eligible for only premium subsidies.1

“Surgery can be a uniquely expensive [experience], and sometimes can be unexpected,” says Charles Liu, MD, MS, a study co-author and general surgery resident at Stanford Hospital in Palo Alto, CA. “For the low-income group, [costs] went down by one-third, but it still was unexpectedly high. For the middle-income group, we did not find any significant change in their out-of-pocket spending or their risk of catastrophic health expenditures.”

Liu and colleagues studied data on patients across the United States. “Using a national database, we looked at folks who got subsidies to buy ACA insurance through marketplaces, and looked at whether they had better financial protection if they had surgery,” explains Liu, a fellow with the National Clinician Scholars Program at the University of California, Los Angeles. “We looked at adults who had any kind of surgical procedure, and we looked at people who had surgical procedures at inpatient hospitals and also outpatient surgeries.”

Investigators assessed rates of catastrophic spending both before and after the ACA was implemented, and they controlled for other potential reasons that could explain spending and policy.

“We found that for low-income people, those who made 130 to 250% of the federal poverty level, who would be eligible to get premium subsidies through Obamacare exchanges — they were significantly more protected from catastrophic expenses from surgery after the ACA,” Liu says.

The study also revealed that despite receiving some help from the ACA in reducing out-of-pocket surgery costs, many patients in the United States experience catastrophic health expenditures after surgery, Liu says.

“About one in six low-income adults still have catastrophic spending after they have surgery,” he says. “One in 10 middle-income patients continue to have catastrophic spending after surgery.”

Low-income, using federal poverty definitions, is defined as individuals earning less than $30,150 per year and families of four earning less than $61,500 per year. The middle-income range is $48,240 to $98,400.

The study authors defined catastrophic health spending as expenditures on both premiums and out-of-pocket costs, amounting to at least 20% of the family income for the year. Catastrophic spending decreased by more than one-third among low-income patients from families earning between $30,000 and $62,000 a year, Liu says.

The study’s findings suggest surgeons should be aware of this problem and how it could affect their patients, Liu says. “As a physician, most of the time we’re not aware of the patient’s financial burden because we have no way of knowing exactly what a patient’s insurance status is and what their burden ends up being,” he explains. “This is a problem for a sizable number of Americans who have surgery.”

When surgeons counsel patients on the timing of a procedure, surgeons should keep in mind the ways they might be unintentionally harming patients economically, Liu adds. “Obviously, if a hospital or group has the resources to charge people on a sliding scale or have a payment plan, then that’s wonderful,” Liu says.

Researchers did not study data related to Medicaid expansion in some states, and state demographic data was not available to them, Liu notes.

“Subsidies are the same in California and South Carolina, which is why we chose to study those folks in those income ranges,” Liu says. “This is not looking at the effect of Medicaid.” The study included surgery cases from all states, making it a nationally representative population. There are several theories about why some patients experienced catastrophic costs from surgery. One idea is that not every patient took advantage of the marketplace subsidy, even if they were eligible, Liu explains.

“Some people are eligible, but did not go on HealthCare.gov and didn’t find a plan,” he says. “One thing we were interested in understanding is just how effective these subsidies are. Maybe the subsidies are too small.”

Investigators researched real experience in paying out-of-pocket expenses and what role policy played. Liu and colleagues saw significant improvement when the ACA marketplaces were rolled out in 2014, but concluded work remains when it comes to making surgery more affordable for low- and middle-income patients. “A lot of folks in the United States end up experiencing a catastrophic effect,” Liu says.

The authors did not investigate specific details, but the results suggest surgery centers, hospitals, local governments, and others should invest more in helping people take advantage of the health insurance benefits available to them, Liu offers.

“Good, solid insurance coverage is good for everyone; it protects patients, and is good for providers,” he adds. “If you’re a small surgical center, it’s difficult to sustainably take care of uninsured or Medicaid patients and still make ends meet.”


  1. Liu C, Maggard-Gibbons M, Weiser TG, et al. Impact of the Affordable Care Act insurance marketplaces on out-of-pocket spending among surgical patients. Ann Surg 2020; Mar 26. doi: 10.1097/SLA.0000000000003823. [Online ahead of print].