National health spending projections: The estimated impact of reform through 2019

Health Affairs

Volumn 29, Issue 10, 2010, Pages 1933-1941

  Sisko, Andrea M ^a   Truffer, Christopher J ^b   Keehan, Sean P ^b   Poisal, John A ^c   Clemens, M Kent ^b   Madison, Andrew J ^b  

^a CENTERS FOR MEDICARE AND MEDICAID SERVICES   (United States)

^b CMS Office of the Actuary   (United States)

^c National Health Statistics Group   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; ECONOMICS; FORECASTING; GROSS NATIONAL PRODUCT; HEALTH CARE COST; HEALTH CARE POLICY; UNITED STATES;

FORECASTING; GROSS DOMESTIC PRODUCT; HEALTH CARE REFORM; HEALTH EXPENDITURES; UNITED STATES;

EID: 78751486325     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2010.0788     Document Type: Article

References (19)

1. Truffer CJ, Keehan S, Smith S, Cylus J, Sisko A, Poisal JA, et al. Health spending projections through 2019: the recession's impact continues. Health Aff (Millwood). 2010;29(3): 522-9.
2. Relevant changes in law include the Department of Defense Appropriations Act of 2010, the Temporary Extension Act of 2010, the Continuing Extension Act of 2010, and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. The Defense Appropriations Act included provisions that prompted an update to our previous 2009 estimates.
3. This anticipated shift reflects our assumption that families will generally make a rational financial decision regarding coverage, based on their income and Medicaid/exchange- subsidy eligibility status. Furthermore, we expect that some employers of mainly low-wage workers will drop coverage to give employees an opportunity to access heavily subsidized and likely richer coverage from the exchanges and that, in return, the employer would pay the less costly legislated penalty amount.
4. Foster RS. Estimated financial effects of the "Patient Protection and Affordable Care Act," as amended [Internet]. Baltimore (MD): Centers for Medicare and Medicaid Services; 2010 Apr 22 [cited 2010 Jul 2]. Available from: http://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf
5. The Office of the Actuary released memoranda describing estimates of the financial, coverage, and national health spending impacts of HR 3200, HR 3692, HR 3590, and the final Affordable Care Act, as amended, as well as memoranda describing the estimated impact on Medicare of HR 3590 and the final Affordable Care Act, as amended. Links to all of these memos are available at Centers for Medicare and Medicaid Services. Estimated impact of health care reform proposals [Internet]. Baltimore (MD): CMS; 2010 May 4 [cited 2010 Aug 24]. Available for download from: http://www.cms.gov/ActuarialStudies/05_HealthCareReform.asp
6. Centers for Medicare and Medicaid Services. Summary of data, assumptions, and methodology underlying OACT's estimates for national health reform proposals [Internet]. Baltimore (MD): CMS; 2010 Sep 3. Available for download from: http://www.cms.gov/ActuarialStudies/05_HealthCareReform.asp
7. Centers for Medicare and Medicaid Services. Projections of national health expenditures: methodology and model specification [Internet]. Baltimore (MD): CMS; 2010 Feb 4 [cited 2010 Aug 23]. Available from: http://www.cms.gov/NationalHealthExpendData/downloads/projections-methodology.pdf
8. Office of Management and Budget. Mid-session review [Internet]. Washington (DC): OMB; 2010 Jul 23 [cited 2010 Aug 23]. Available from: http://www.whitehouse.gov/omb/budget/MSR/
9. Linehan K. Keeping health insurance after a job loss: COBRA continuation coverage and subsidies [Internet]. Washington (DC): National Health Policy Forum; 2010 Jun 24 [cited 2010 Aug 23]. (Issue brief no. 837). Available from: http://www.nhpf.org/library/issue-briefs/IB837_COBRA_06-24-10.pdf
10. High-risk insurance pools will be jointly run by the federal government and state and local governments; therefore, their impact will be seen in the "other public" category in the National Health Expenditure Accounts, rather than in private health insurance. A minor offset to private health insurance is associated with another immediate reform: the federal reinsurance program in support of employersponsored early retiree health benefits. Although the program substitutes federal spending for employer private insurance costs, it has no net impact on total national health spending.
11. By 2019, half of new health insurance exchange enrollees will have had individually purchased insurance prior to enrollment; the remaining new enrollees will be largely the formerly uninsured and some former enrollees in employersponsored insurance. This distribution reflects the full transition of employer and individual behavior following the coverage expansions in 2014.
12. Beginning in 2018, the Affordable Care Act will impose a tax on employer- sponsored health plans on the value that exceeds the standard threshold amounts of $10,200 for individual coverage and $27,500 for family coverage (note that some employers will have different thresholds based on the age-gender mix of their workforce, the types of occupations employed, and the existence of qualified retirees). The threshold amounts may be adjusted upward if health care costs rise more rapidly than expected prior to 2018.
13. Freezing the federal poverty level at the 2008 rate to prevent erosion of eligibility was the most notable outcome of the non-Affordable Care Act legislative actions.
14. The Affordable Care Act permits states to expand Medicaid eligibility earlier than 2014 through state plan amendments. However, it is unlikely that many states will greatly expand eligibility before 2014.
15. In practice, it is highly unlikely that Congress will allow this cut to become effective, as other such reductions have been avoided since 2002.
16. The board is required to develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries. Its proposals will become law unless overridden by congressional intervention.
17. This estimate is based on the use of $1 billion in authorized implementation funds, plus additional estimated funding that would likely be necessary to continue to fulfill Affordable Care Act-mandated functions. This estimate does not include any other potential federal administrative costs from other Affordable Care Act provisions that were not specified in the legislation.
18. Kingsdale J. Health insurance exchanges- key link in a better-value chain. N Engl J Med. 2010 [published online ahead of print].
19. Kingsdale J. Establishing a health insurance exchange: testimony before Joint Hearing of the Senate and Assembly Health Committees [Internet]. Sacramento (CA): State of California; 2010 May 12 [cited 2010 Jul 22]. Available from: http://senweb03.senate.ca.gov/committee/standing/health/California_Testimony_of_Jon_Kingsdale.pdf