FROM INCREMENTAL TO COMPREHENSIVE HEALTH INSURANCE REFORM: HOW VARIOUS REFORM OPTIONS COMPARE ON COVERAGE AND COSTS

By: The Urban Institute
Authors: Linda J. Blumberg, John Holahan, Matthew Buettgens, Anuj Gangopadhyaya, Bowen Garrett, Adele Shartzer, Michael Simpson, Robin Wang, Melissa M. Favreault, Diane Arnos
Published: October 2019
Financed by: The Commonwealth Fund
Legislation analyzed: None. Analyzes eight potential health reforms, including two versions of single-payer healthcare.


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Author's Summary

One single-payer approach would leave no one uninsured and largely eliminate consumers’ out-of-pocket medical costs but would require much greater federal spending to finance. The modeled “enhanced” single-payer system would cover everyone, including undocumented immigrants. The reform would include benefits more comprehensive than Medicare’s—including adult dental, vision, hearing, and long-term services and supports—with no premiums or cost sharing. All current forms of insurance for acute care would be eliminated, including private insurance, Medicaid, and Medicare, and everyone residing in the US would be covered by a new public insurance program. Providers would be paid rates closer to Medicare’s. Health spending by employers would be eliminated, and household and state health spending would decline considerably while federal spending would increase significantly.

Coverage and costs:
This reform option covers the entire US population. National spending on health care would grow by about $720 billion in 2020. Federal government spending would increase by $2.8 trillion in 2020, or $34.0 trillion over 10 years.

A second single-payer approach can be constructed with lower federal and system-wide costs. In addition to the enhanced single-payer plan above, researchers examined a single-payer “lite” plan that is similar to the enhanced version but includes cost sharing for out-of-pocket expenses based on income, adds fewer new covered benefits, and only covers legally residing US residents. Single-payer “lite” lowers total national health spending, decreasing health spending by households, employers, and state governments and increasing federal government spending by less than the enhanced single-payer reform.

Coverage and costs:
This reform plan achieves universal coverage for people legally present in the US, covering 25.6 million people who were uninsured. However, the plan leaves all 10.8 million undocumented immigrants without coverage (due to the elimination of private insurance). National spending on health care would decrease by $209.5 billion, or 6 percent, in 2020. Federal government spending would increase by $1.5 trillion in 2020, or by $17.6 trillion over 10 years.