Cost and Coverage: The Impact of Implementing Various State Health Care Reform Proposals Nationally. Cost Impact

06/01/2008

A national combined health care reform initiative of this magnitude would have a net federal cost of $155.8 billion dollars and a net state savings of $2.4 billion, for a total program cost of $153.4 billion (Figure 12).  States would achieve a savings of $15.6 billion as a result of reduced spending on other state and local programs, but would incur expenditures totaling $9 billion for the increased enrollment in Medicaid and SCHIP.  Previously uncompensated care would be reduced by almost $26 billion.   

  Change in Health Spending
Figure 12. Summary of Public Program Costs under a Combined Reform Approach (in billions)
Net Public Costs $153.4
Change in Spending by Program  
Federal Government Costs $155.8
    Medicaid and SCHIP Programs $11.9
    Premium Subsidies $103.0
    Penalty for Remaining Uninsured $0.0
    Employer Assessments for not Offering Coverage ($2.9)
    Tax Revenue Loss from Mandatory Section 125 Plans $41.9
    Tax Revenue Loss/(Gain) Due to Wage Effects $1.9
State and Local Government Costs ($2.4)
    Medicaid and SCHIP Programs $9.0
    Other State and Local Programs ($15.6)
    Tax Revenue Loss from Mandatory Section 125 Plans $4.1
    Tax Revenue Loss/(Gain) Due to Wage Effects $0.1
Uncompensated Care  
Net Reduction in Uncompensated Care ($25.9)
Source: Lewin Group estimates using the Health Benefits simulation model (HBSM).

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