With 45.7 million uninsured Americans in 2007, up from 38.4 million in 2000 (U.S. Census Bureau, 2008), health care reform is taking center stage as one of the top priorities for governors, state legislatures, and Congress. In the absence of a cohesive and actionable national health care reform agenda, many states are exploring opportunities to reform their health care systems in order to expand coverage. The Massachusetts health care reform effort is likely the most widely known, both because of the expansiveness and innovation involved, but many other states have considered and/or implemented less extensive and complex reforms as well. States are trying, and in some cases succeeding, to reduce the ranks of the uninsured among their residents. While health care reform may, indeed, occur one state at a time, transformation on a national scale should not be overlooked.
In this paper, we will present the findings of an analysis that explores the coverage and cost impacts of implementing various state health care reform proposals nationally. While there is no shortage of ideas for how to expand coverage, the analysis was limited to looking at five different reform options:
- A health insurance premium subsidy program,
- An employer mandate to implement Section 125 plans,
- An employer mandate to provide coverage,
- An individual mandate to have coverage, and
- A national implementation of certain combined features of the Massachusetts reform initiative.
For each of these options, we will discuss how a reform of this nature will affect both those who have coverage and those who do not, as well as the cost to Federal, state, and local stakeholders.
The Office of the Assistant Secretary for Planning and Evaluation (ASPE) contracted with The Lewin Group to model and analyze the cost and coverage impacts of implementing various state health care reform proposals nationally. The Lewin Group used their proprietary Health Benefits Simulation Model (HBSM) for the analysis. All modeling done for the various analyses were performed assuming full implementation of the reform(s) in the year 2010.
The HBSM model is a micro-simulation model of the U.S. health care system. The model is a fully integrated platform for simulating policies ranging from narrowly defined Medicaid and SCHIP coverage expansions to broad-based reforms such as changes in the tax treatment of health benefits. HBSM was created to provide comparisons of the impact of alternative health reform models on coverage and expenditures for employers, governments and households. The model facilitates comparisons of alternative health reform initiatives by using uniform data and assumptions. For example, take-up rates for Medicaid, SCHIP and various subsidy proposals are simulated using uniform take-up equations and modules. Uniform methods are also used to simulate changes in health services utilization attributed to changes in coverage status and cost-sharing parameters. This uniform approach assures that it can develop estimates of program impacts for very different policies using consistent assumptions and reporting formats.
A more detailed description of the model is available in The Lewin Group’s full report to ASPE, “The Cost and Coverage Impacts of Selected Health Reform Options Available to States.” For a copy of the report, please contact Carrie Shelton or Thomas Musco, in ASPE’s Office of Health Policy, at (202) 690-6870.