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House Reform Bill Would Decrease Uninsured by 24 Million: RAND Study

Cheryl Clark, for HealthLeaders Media, January 11, 2010

By 2019, 24 million fewer people would be uninsured if the House version of the health reform bill is retained in final legislation, and those still left out of coverage will be younger, healthier, and wealthier than if changes don't occur, according to a simulation model issued by the RAND Corp.

"Our findings show that the policy changes in the House bill would extend health coverage to a substantial number of currently uninsured Americans," said Elizabeth A. McGlynn, co-leader of the RAND COMPARE project, an ongoing analysis of reform provisions and associate director.

The project drew these additional conclusions about the impacts of the Affordable Health Care for America Act, (H.R. 3962):

  • Compared with the projected status quo in 2019, about 12 million more people would be enrolled in employer-sponsored health insurance, 10 million more would be enrolled in Medicaid, and 8 million more enrolled in non-group insurance, including the proposed health insurance exchange's three options—basic, enhanced, and premium.
  • Among those who would purchase insurance through the exchange in 2019, "the vast majority (95%)" would choose the basic plan, with the remaining few split between the enhanced and premium plans.
  • Personal health spending would increase by 3.3%, to $753 billion cumulatively between 2010 and 2019.
  • Federal subsidies between 2010 and 2019 would amount to $445 billion to help those who don't receive employer-sponsored health coverage comply with the individual mandate. Approximately 53% of 25 million people who purchase insurance through the exchange in 2019 would receive this subsidy.
  • Medicaid spending is projected to increase by $559 billion between 2010 and 2019, a 21% increase over projected trend in status quo.
  • Those not complying with the individual mandate would pay penalties totaling $75 billion between 2013 and 2019. Employers not complying with the employer mandates would pay $108 billion in penalties during that period.
  • For the employer market, average insurance premiums in 2019 will be at least 2% lower than projected in the status quo.
  • However, there will be an increase in insurance premiums for non-group policies. The increase is higher in the first few years after the reform takes effect, but becomes negligible by 2019, with an average increase through the period of about 4%, according to RAND.

The RAND analysis was limited just to those portions of H.R. 3962 that focused on insurance coverage.

The bill as now worded calls for a "guaranteed issue," which means that insurance companies must sell health plans to anyone who wants to buy them, and price can vary only on the basis of age, family composition, and geography. The most expensive policy can be only twice as expensive policy.

The RAND analysis noted that in the absence of a penalty levied on people who did not comply with the individual mandate, 4.9 million fewer people would obtain coverage. But increasing the penalty from 2.5% of adjusted gross income to 3.5% would increase coverage by less than 1 million.

"Our results are consistent with the aggregate estimates from the Congressional Budget Office (CBO), although CBO projects a more rapid decrease in the rate of uninsured than we assume in our model," the analysts wrote.

The CBO also estimated that about 6 million fewer people will remain uninsured in 2019, which the analysts attributed to the fact that they estimated a lower average take-up rate for Medicaid.


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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