Health Affairs: Healthcare reform package strikes a balance in price/scope

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The only alternatives to the federal healthcare reform that would have covered more Americans at a lower cost to the federal government were politically untenable, and would have included substantially higher penalties for those who don't comply with mandates, lower government subsidies and less-generous Medicaid expansion, according to research published in the June edition of Health Affairs.

The healthcare reform law provides health insurance coverage to the largest number of Americans while keeping federal costs as low as reasonably possible, according to lead author Elizabeth A. McGlynn, senior researcher at RAND, a nonprofit research organization in Santa Monica, Calif., and colleagues.

The analysis estimated that 28 million Americans will be newly insured by 2016 under the provisions of the Patient Protection and Affordable Care Act (PPACA) and examined how the expected outcome of healthcare reform would have changed if components of the law were structured differently.

Simulating more than 2,000 different policy scenarios using the RAND Compare micro-simulation model, the researchers found that only a few policy scenarios would produce better results than expected under the new health reform law and those scenarios represent only small improvements over what will be expected by 2016.

McGlynn and colleagues found that an additional 4 million people would be insured with no additional cost to the federal government if the penalty for individuals who fail to purchase health insurance increased to $1,200 annually per person from $750 in the law.

The analysis also showed that a combination of strategies could cut federal spending by $20 billion annually without decreasing the number of newly insured. This would require a combination of measures that would place a higher financial burden on the lowest-income segment of the nation's population, according to the authors.

“The process by which Congress considers legislation rarely affords the public an opportunity to examine how the outcomes might change if components of the law were structured differently,” the authors concluded. "These alternative strategies strike us as politically challenging, if not untenable. On balance, the new law appears to have landed on a distinctive plain of the policy frontier where the costs and coverage levels achieved were reasonable enough to secure passage of the law."