Obamacare Could Save Some Of The Poorest Americans $1,429 Per Year: Study

Obamacare will dramatically reduce the cost of health care for some of the poorest Americans, a new study finds.

Out-of-pocket health care costs will drop from $1,463 to just $34 per year in 2016 for the approximately 11.5 million Americans who get insurance through the Affordable Care Act’s expansion of Medicaid, a study released Tuesday by the RAND Corporation found. President Obama's health care reform law will also reduce the likelihood that this group will face catastrophic medical costs -- defined as 10 percent of income -- by 40 percent, according to the study.

“The lowest income individuals benefit the most,” Christine Eibner, a senior economist at RAND and one of the authors of the study, said.

The study, which analyzed data on Americans’ current health care spending and used economic models to predict how it might change with the law, comes the same day that Americans can begin shopping for health insurance on the online exchanges set up by Obamacare.

House Republicans are attempting to derail the law by refusing to pass a bill funding the government without provisions to defund Obamacare. So far, Senate Democrats have rejected these proposals, resulting in a government shutdown.

Americans who make up to 133 percent of the poverty level are eligible for coverage under the Medicaid expansion, but only if their state approved it. About half of states rejected using Obamacare funds to expand Medicaid on political grounds.

For those low-income Americans living in states that rejected the expansion, the cost of health care will be dramatically higher than if they lived in a state with the expansion. Texans eligible for coverage under the Medicaid expansion would pay just $28 per year in out-of-pocket health care costs if Republican Gov. Rick Perry hadn’t rejected it, the RAND study found.

Now that group will likely remain uninsured and therefore pay $1,831 per year on average for care, according to the study.

“Without expansion these individuals will be paying much more out of pocket for health care,” Eibner said. “It makes a substantial difference for this population.”

Out-of-pocket health care costs will also fall for some people who don't qualify for Medicaid. Those at or near poverty can qualify for tax credits to cut the cost of private health insurance. And for people who earn about about $28,725 per year, or up to 250 percent of poverty, additional help is available to reduce out-of-pocket expenses like deductibles.