New Report Shows Costs, Benefits of Varied Healthcare Reforms

Kerry Dooley Young

October 17, 2019

A new report offers estimates on eight potential paths for expanding access to healthcare in the United States. It shows how a Medicare-for-all approach could either be the most expensive or the cheapest option.

With a "single-payer lite" approach, national health spending would theoretically be cut by almost $210 billion in 2020, to $3.29 trillion, according to the report, which was prepared by researchers at the nonprofit, left-leaning Urban Institute. The Commonwealth Fund, which supported this work, released the report on Wednesday.

The single-payer-lite approach was the least costly with respect to total national health spending. However, it would raise expenses for the federal government. Under the single-payer-lite approach, the federal government's share of the nation's medical bills would rise to $2.81 trillion from a current 2020 estimate of $1.284 trillion.

The savings from the single-payer-lite model would come from cuts in payments for medical services and reduced administrative expenses. These would more than offset the expenses associated with expanding coverage and the lowering of cost-sharing requirements, the report states.

This single-payer-lite model would not cover people living illegally in the United States, thus leaving uncovered 10.8 million immigrants who would be unable to provide needed legal documents.

The single-payer-lite plan would also build on the services the Affordable Care Act (ACA) of 2010 deems necessary for insurance plans.

Enhanced Model

A "single-payer-enhanced" model would be the most expensive plan. With that plan, the 2020 estimate of national health spending would rise by $720 billion to $4.217 trillion, according to the report.

The single-payer-enhanced model envisions covering all people living in the United States through a government-run plan. This model would add new benefits beyond what traditional Medicare now provides, such as dental care.

The federal government's cost would rise from $1.284 trillion in the current system to $4.129 trillion, with a national program administering almost all healthcare expenses.

The single-payer theoretical models in the report share features with Medicare-for-all bills proposed by Sen. Bernie Sanders (I-Vt), who is seeking the Democratic presidential nomination for 2020. The theoretical single-payer models would push private insurers out of the healthcare system, a goal largely shared by Sanders.

The report does not advocate specific plans, according to the Commonwealth Fund. It is intended to aid in discussions about approaches for helping more people afford medical care.

The theoretical nature of this approach is signaled in the report's use of 2020 for a model year.

Congress is not likely to act on any sweeping changes to the US healthcare system before the 2020 election, said Joseph Antos, a researcher at the right-leaning American Enterprise Institute, who reviewed the Urban Institute study at the request of Medscape Medical News.

Antos said the researchers from the Urban Institute had produced a good report using economic assumptions that most analysts would use. The report shows the power of price controls on spending, although lawmakers would face significant pushback if they attempted to cut medical payments at the level envisioned in the report, he said.

"What would actually happen is political pressure to make payments more palatable to organized healthcare, so spending would climb up as Congress does what it does," Antos told Medscape Medical News.

Six More Models

The Urban Institute report also presents six models that are based on the current US mix of private and public plans.

The least costly of these models would add a public option and potentially impose limits on payments for medical care. Under this model, the report pegs 2020 national health spending at about $3.497 trillion to $3.498, little changed from the current baseline. But the federal 2020 spending estimate would rise to $1.33 trillion to $1.45 trillion from a baseline of $1.284 trillion.

These models call for a nationwide expansion of Medicaid, as the ACA originally envisioned. Fourteen states have not yet opted to use the federal money provided by the ACA to raise income limits for Medicaid.

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