Assessing health reform's impact on four key groups of Americans

Health Affairs

Volumn 29, Issue 9, 2010, Pages 1714-1724

  Newhouse, Joseph P ^a  

^a HARVARD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COST EFFECTIVENESS ANALYSIS; EMPLOYMENT; GOVERNMENT; GROSS NATIONAL PRODUCT; HEALTH CARE ACCESS; HEALTH CARE COST; HEALTH CARE FINANCING; HEALTH CARE POLICY; HEALTH CARE SYSTEM; HEALTH INSURANCE; HEALTH SERVICE; HUMAN; INCOME; MEDICAID; MEDICARE; PROSPECTIVE PAYMENT; REIMBURSEMENT; UNITED STATES;

CENTERS FOR MEDICARE AND MEDICAID SERVICES (U.S.); CHILD HEALTH SERVICES; CHILD, PRESCHOOL; FINANCING, GOVERNMENT; GUIDELINE ADHERENCE; HEALTH BENEFIT PLANS, EMPLOYEE; HEALTH CARE REFORM; HEALTH SERVICES ACCESSIBILITY; HUMANS; INSURANCE COVERAGE; MASSACHUSETTS; MEDICAID; MEDICARE; PATIENT ADVOCACY; STATE HEALTH PLANS; UNITED STATES;

EID: 79251557850     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2010.0595     Document Type: Article

References (34)

1. Author's calculations based on data from the Medical Expenditure Panel Survey (MEPS) 2007 Full-Year Consolidated Jobs and Person-Round-Plan Files
2. Holahan and Headen quote a CBO takeup rate among Medicaid eligibles of 57 percent. Holahan J, Headen I (Urban Institute, Washington, DC). Medicaid coverage and spending in health reform [Internet]. Washington (DC): Kaiser Commission on Medicaid and the Uninsured; 2010 May [cited 2010 Jun 14]. Available from: http://www.kff.org/healthreform/upload/Medicaid-Coverage-and-Spendingin-Health-Reform-National-and-State-By-State-Results-for-Adults-ator-Below-133-FPL-Executive-Summary.pdf
3. U.S. Department of Health and Human Services. Federal financial participation in state assistance expenditures; federal matching shares for Medicaid, the Children's Health Insurance Program, and aid to needy aged, blind, or disabled persons for October 1, 2010 through September 30, 2011. Fed Reg [serial on the Internet]. 2009 Nov 27 [cited 2010 Jul 9];74(227):62315-7. Available from: http://edocket.access.gpo.gov/2009/E9-28438.htm
4. McLaughlin CG, editor. Health policy and the uninsured. Washington (DC): Urban Institute Press; 2004.
5. Ku L, Jones E, Finnegan B, Shin P, Rosenbaum S (George Washington University, Washington, DC). How is the primary care safety net faring in Massachusetts? [Internet]. Washington (DC): Kaiser Commission on Medicaid and the Uninsured; 2009 Mar [cited 2010 Jul 9]. Available from: http://www.kff.org/healthreform/7878.cfm
6. Although some fear many employers who now offer insurance may drop it, the subsidy and penalty structure make that unlikely. For example, consider a single person with a $40,000 income and an insurance policy with a $5,000 premium. If the premium is entirely exempt from individual income tax, the current tax subsidy is $1,250 plus any subsidy from state income taxes. The new subsidy in PPACA would be slightly less, $1,200, and no subsidy is available for employees above 400 percent of the federal poverty level ($43,320 for a single person); in addition, employers with more than fifty employees that drop insurance pay a $2,000 penalty for each person who gets a subsidy.
7. These values, which come from the online insurance site ehealthinsurance. com, do not control for the characteristics of the policy. Although average deductibles are notably less in New York and New Jersey, the effect is not large enough to account for this difference in spending.
8. For data on per capita spending by state, see Centers for Medicare and Medicaid Services. National health expenditure data [various data tables] [Internet]. Baltimore (MD): CMS; [cited 2010 Jul 9]. Available from: http://www.cms.gov/NationalHealthExpendData/downloads/res-us.pdf
9. In lieu of a broker, large employers often employ a fee-based benefit consultant to advise them and to negotiate with insurers
10. Long SK, Masi PB. Access and affordability: an update on health reform in Massachusetts, fall 2008. Health Aff (Millwood). 2009;28(4): w578-87.
11. Centers for Disease Control and Prevention. Short-term effects of health-care coverage legislation- Massachusetts, 2008. MMWR [serial on the Internet]. 2010 Mar 12 [cited 2020 Apr 7];59(09):262-7. Available from: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5909a3.htm
12. Long SK, Stockley K. Sustaining health reform in a recession: an update on Massachusetts as of fall 2009. Health Aff (Millwood). 2010; 29(6):1234-41.
13. For example, WellPoint's analysis for California is that the premium of a younger, healthy individual will rise 106 percent, while that of an older, less healthy individual will fall 41 percent. WellPoint. Health care reform premium impact in California- December 2009 addendum [Internet]. City (ST): WellPoint; [cited 2010 Jul 9]. Available from: http://www.wellpoint.com/pdf/December_2009_Analysis_ California_Update.pdf
14. Similar analyses for other states are available on the WellPoint Web site
15. The subsidy is the lesser of the premium for the plan the family buys or the premium of the second-cheapest Silver plan (the Silver plan covers 70 percent of expected expenses). In the latter case, if the family buys a more expensive plan, it pays the entire additional premium.
16. The family's marginal individual income tax rate is 15 percent, and they pay 7.65 percent in payroll tax for Social Security and Medicare (not counting the employer's share).
17. Thirty percent of people working for pay are self-employed ("non-employee firms") or in firms with fewer than twenty paid employees. Another 15 percent are in firms with 20-99 paid employees. U.S. Census Bureau. Statistics about business size (including small business) from the U.S. Census Bureau [Internet]. Washington (DC): The Bureau; [cited 2010 Jun 14]. Available from: http://www.census.gov/epcd/www/smallbus.html
18. A little over 60 percent of those in firms with fewer than fifty employees are offered insurance (author's calculations). Some of the working poor will be eligible for Medicaid.
19. Cutler DM, Zeckhauser RJ. The anatomy of health insurance. In: Culyer AJ, Newhouse JP, editors. Handbook of health economics. Amsterdam: Elsevier; 2000. p. 563-644.
20. Frank RG, Glazer J, McGuire TG. Measuring adverse selection in managed health care. J Hlth Econ. 2000;19(6):829-54.
21. Newhouse JP. Pricing the priceless: a health care conundrum. Cambridge (MA): MIT Press; 2002.
22. Pope GC, Kautter J, Ellis RP, Ash AS, Ayanian JZ, Iezzoni LI, et al. Risk adjustment of Medicare capitation payments using the CMS-HCC model. Hlth Care Fin Rev. 2004; 25(4):119-41.
23. Fisher P. Beyond borrowing: meeting the government's financial challenges in the 21st century. Remarks to the Columbus (OH) Council on World Affairs [Internet]. Washington (DC): U.S. Department of the Treasury; 2002 Nov 14 [cited 2010 Jul 9]. Available from: http://www.ustreas.gov/press/releases/po3622.htm
24. What was $20 trillion in 2002 had become $36 trillion by 2008 and is undoubtedly even larger now. The $36 trillion figure is from Centers for Medicare and Medicaid Services. 2009 annual report of the boards of trustees of the federal Hospital Insurance and federal Supplementary Medical Insurance trust funds [Internet]. Baltimore (MD): CMS; 2009 [cited 2010 Jul 9]. p. 69. Available from: https://www.cms.gov/ReportsTrustFunds/downloads/tr2009.pdf
25. Reinhart CM, Rogoff KS. This time is different: eight centuries of financial folly. Princeton (NJ): Princeton University Press; 2009.
26. Those of a pessimistic bent can read the board's authority as rather circumscribed: "It is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing (including Parts A and B premiums), or would result in a change in the beneficiary premium percentage or low-income subsidies under Part D. Hospitals and hospices (through 2019) and clinical labs (for one year) will not be subject to cost reductions proposed by the Board." Kaiser Family Foundation. Side-by-side comparison of major health care reform proposals [Internet]. Menlo Park (CA): KFF; 2010 Jun 18 [cited 2010 Jul 9]. Available from: http://www.kff.org/healthreform/sidebyside.cfm
27. From 1997 to 1999, however, Medicare spending fell; the only time this has happened in the forty-four years of the program. Congressional Budget Office. The long term budget outlook: fiscal years 2010 to 2020. Washington (DC): CBO; 2010.
28. Chernew ME, Baicker K, Hsu J. The specter of fiscal Armageddon: health care and federal debt in the United States. N Engl J Med. 362(13): 1166-8.
29. For example, failure to reduce physician fees 21 percent this year and 4+ percent annually into the future, and limiting the Alternative Minimum Tax to just those taxpayers who pay the tax today
30. Weissman JS, Epstein AM. Falling through the safety net: insurance status and access to health care. Baltimore (MD): Johns Hopkins University Press; 1994.
31. Wenneker MB, Weissman JS, Epstein AM. The association of payer with utilization of cardiac procedures in Massachusetts. JAMA. 1990; 264(10):1255-60.
32. Weaver C. As Medicare pay shrinks, some California docs hike patient fees. Kaiser Health News [serial on the Internet]. 2010 Mar 16 [cited 2010 Jul 9]. Available from: http://www.kaiserhealthnews.org/Stories/2010/March/16/California-Docs-Hike-Patient-Fees.aspx
33. Ginsburg PB, Berenson RA. Revising Medicare's physician fee schedule- much activity, little change. N Engl J Med. 2007;356(12):1201-3.
34. Glazer J, McGuire TG. Multiple payers, commonality, and freeriding in health care: Medicare and private payers. J Hlth Econ. 2002; 21(6):1049-69.