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The Commonwealth Fund and The Urban Institute looked at eight reform scenarios, including ones that build on the Affordable Care Act and expand to universal coverage or single payer. Two scenarios that continue to utilize private insurance show that, conceptually, broad coverage can be achieved without increasing spending.
“This study is important because it shows that there are several health reform approaches that have the potential to increase the number of people with health insurance, make health care more affordable, and slow cost growth,” David Blumenthal, MD, president of The Commonwealth Fund, said during an Oct. 15 conference call introducing the report.
He called the details that separate the varying models “central to the national debate on health care and health insurance coverage as the 2020 campaign season progresses.”
All the scenarios presented in the report have a foundation in various current Democratic health care reform proposals, although no one specific proposal or legislation is profiled within the eight scenarios presented.
“Our hope is that this extensive analysis will clarify for voters and policy makers the implications of the policy choices before us,” said Sara R. Collins, PhD, the vice president of health care coverage and access at The Commonwealth Fund, during the call.
The first of these scenarios, dubbed “Universal Coverage I: Private and Public Options,” includes continued use of private insurance but also involves a public option and is the first of four options presented in the report to achieve universal coverage by actively enrolling people who are not enrolled in a private plan for one year in the public option with income-scaled premiums. This option would not utilize the ACA employer mandate and would remove the “firewall” that prevents individuals with access to employer-sponsored coverage from accessing financial assistance and seeking individual coverage from the insurance marketplace.
Dr. David Blumenthal
This scenario, as with all but one of the scenarios analyzed in the report, covers all essential benefits as defined in the Affordable Care Act. The only single-payer option that does not cover all of these essential benefits still provides coverage for medically necessary care, including dental, vision, hearing, and long-term services.
The Universal Coverage I scenario does not have any penalties for not carrying insurance, but all legal residents that forgo voluntary coverage from an employer or the marketplace will be automatically enrolled in coverage for which they are responsible for a premium payment.
There would be no expanded access to short-term, limited duration plans as the automatic enrollment to those not voluntarily covered by an employer or in the marketplace would make coverage universal. Federal government spending under this plan increases government health care spending in 2020 by $122.1 billion and $1.5 trillion over 10 years. However, total national spending in this scenario would decrease by $22.6 billion or 0.6% in 2020, compared with current law.
“Universal Coverage II: Enhanced Subsidies” is similar to Universal Coverage I in all other respects other than that it includes more generous premium and cost-sharing subsidies. These additional offerings would push federal government spending up $161.8 billion more in 2020, compared with current law, and to $2 trillion more over the next 10 years, while showing a minimal decrease in total national spending of less than 1% compared with current law.
The other two options that would move toward providing everyone with health insurance include a single payer system that covers all ACA essential health benefits, features no premiums, has income-related cost sharing, and covers all legal residents. Private insurance in this scenario is prohibited, and provider payments would be similar to those received in Medicare. Federal government spending would increase in 2020 by $1.5 trillion, compared with current law, and $17.6 trillion over the next 10 years. However, total national spending would decrease by $209.5 billion, or 6%, in 2020 compared with current law. These savings would come from lower provider payments and administrative costs that outweigh increased costs associated with near universal coverage and lower cost-sharing requirements.
A second single payer scenario broadens the benefits and would cover all residents in the United States, including undocumented residents. It would have no cost-sharing requirements.
The “optimal levels at which the payments for hospitals and doctors and other providers should be paid are really unknown at this time,” said Linda Blumberg, PhD, fellow at The Urban Institute’s Health Policy Center and one of the report authors, during the call.
Providing total coverage for all people in the United States is estimated to increase federal spending by $2.8 trillion in 2020 compared with current law, and $34 trillion over 10 years, with much of this increase accounted for by the shift in existing state and private spending to the federal government. At the same time, total national spending would increase by approximately $720 billion in 2020 compared with current law. Even though employer, household, and state spending would decrease, these savings would not be enough to offset increases in federal spending as well as the increased consumption of health care that comes with more generous benefits. The offsets from lower administrative costs and lower provider payments also would not offset higher spending.
The report only looks at health care spending and does not present any suggestions on revenue to offset the spending.
SOURCE: Blumberg LJ et al. “From Incremental to Comprehensive Health Insurance Reform: How Various Reform Options Compare On Coverage and Costs.” The Commonwealth Fund and The Urban Institute. 2019 Oct 16.