Why Health Reform Will Bend the Cost Curve
Dec 31, 2009
This Commonwealth Fund analysis finds evidence that the cost-containing impacts of the Senate and House health reform proposals could be even greater than previous analyses have shown
Introduction: This Commonwealth Fund brief looks at the cost saving benefits of the Senate and House health reform bills that would benefit the general public. In addition to projecting reductions in the federal deficit, this analysis forecasts the reduction of insurance premiums by $2,000 per family, as well as a total savings of $683 billion in reduced health spending from 2010-2019. These saving are on top of the published decreases in the federal deficit.
An excerpt from the report: To judge the merit of health reform proposals, it is essential to understand the impact of the provisions on both the affordability of insurance coverage and overall health care spending. Most assessments of the current congressional health reform bills, however, have taken a federal budgetary perspective only. These include the estimates prepared by the Congressional Budget Office (CBO), which “scored” the federal budget impacts of the Affordable Health Care for America Act (H.R. 3962, the House bill)1 and the Patient Protection and Affordable Care Act (the Senate bill),2 finding in each case a modest deficit reduction in the first 10 years of implementation.
But the federal budget impact is not the same as the health system impact. Some of the federal funds would be used to reduce costs for people who already have health insurance coverage but struggle to afford it, while others would assist very small businesses with the cost of insurance premiums. To estimate health spending accurately, we need to separate out the costs into new health care spending and transfers of existing spending from the private sector to the government. Furthermore, CBO assigned very little savings to system reform efforts, rendering its overall analysis incomplete.
Read the full report here.