Indiana Program Shows Health Reform Without Individual Mandate is Costly
Milliman compared Indiana's HIP population against the typical commercial population and found much higher inpatient services, ER visits, and pharmacy costs. Milliman discovered the HIP population was more likely to have chronic diseases, such as asthma, depression, and diabetes, than the typical commercial population. The first people to enroll in the program in the first few months had a higher morbidity rate.
Milliman's research found that inpatient, outpatient, pharmacy, and physician expenditures peaked around the second and third months and then decreased over the year. This shows that the sickest, previously uninsured Hoosiers jumped at the new offering and received care immediately. Those in better health waited until later in the year to join.
Milliman found that inpatient use decreased in the seventh to ninth months of enrollment, outpatient costs dropped after the third month, and pharmacy costs increased steadily in the first nine months.
Damler warns that any health reform plan should take into account anti-selection. He also suggests that an individual mandate, which is in place in Massachusetts and has been debated as part of federal health reform, would have brought a "broader cross-section" to HIP from the start. He suggests that any health reform plan would be "difficult to protect against anti-selection in insurance without the use of some type of mandates."
Damler says an individual mandate coupled with personal responsibility and spending "appropriate levels" at the initial periods are keys to health reform's success.
Mandates have been debated by federal lawmakers, but there has not been broad support for requiring health insurance for all Americans.
However, as the Milliman study shows, if you are going to bring the healthy into the health insurance pool, policymakers will need to find ways to woo them into the water. Without demanding they buy coverage, don't expect the healthy (especially the young and healthy) to dip their toes into the health insurance waters.
Les Masterson is an editor for HealthLeaders Media.
- CFO Exchange: Smartphones Poised to Disrupt Healthcare, Says Topol
- Consumerism Drives Healthcare Branding, Rebranding Efforts
- CNO on Hospital Redesign: 'You Can't Over-Communicate'
- How Digital Strategy Shapes Patient Engagement at Boston Children's Hospital
- PA Ranks See 'Phenomenal Growth,' Lack of Diversity
- 3 Traits Personality Assessments Can't Reveal
- Half of All Primary Care, Internal Medicine Jobs Unfilled in 2013
- Carondelet to Pay $35M to Settle Fraud Allegations
- Antibiotic Overuse a 'Huge Threat' to Patient Safety, Says CDC
- CHS Hacked, 4.5M Patient Records Compromised