Because a small fraction of individuals account for a large share of total health expenditures, insurers gain more by excluding high-cost people from coverage than by efficiently managing the care of enrollees. The incentives for insurers to avoid high-cost and high-risk enrollees affect not only the likelihood of health insurance coverage for the high-risk population, but also the cost and accessibility of coverage overall in the small-group and nongroup private health insurance markets. This paper identifies public policies that might address these problems in private health insurance markets more effectively and delineates the advantages and disadvantages of each.

In this paper and brief, the authors discuss alternative ways that health reform could be financed. They analyze different options including several proposals for delivery system reforms and for reduction in Medicare and Medicaid payments. They estimate the cost savings that could occur due to the introduction of a public plan option. Finally, they explore a range of revenue options.

From the report:

In this paper, we argue that there are many realistic sources of savings and many sources of revenue that could be used to support health reform. In some cases, policy initiatives plausibly would improve quality and patient experience with care while reducing spending. However, all of the measures could negatively affect some stakeholders financially and will likely be opposed by them because of that. Nevertheless, health reform will only happen if we are willing to take advantage of a variety of savings opportunities and revenue sources, thus spreading the costs broadly and minimizing burden on any single group. In this paper we show that it is possible to obtain more than enough savings or revenue to fully finance comprehensive health care reform.

In delineating an array of savings and financing strategies, we assume a health reform approach consistent with the broad outlines being actively considered by Congress and the Obama administration. The plan would have a Medicaid expansion for all those with incomes less than 100 percent of the federal poverty level; those currently on Medicaid and CHIP with higher incomes would obtain coverage in the new health insurance exchange (described below). There would be an individual mandate for all individuals to obtain health insurance coverage. The plan would have an insurance exchange offering private health insurance plans to individual and small employer purchasers (fewer than 50 workers).1

The Urban Institute Health Policy Center (2009). How we can pay for health reform. Berenson, Robert A., Holahan, John, Blumberg, Linda J., Bovbjerg, Randall R., Waidmann, Timothy, Cook, Allison & Williams, Aimee.

Full report: http://www.urban.org/uploadedpdf/411932_howwecanpay.pdf

This report outlines state data on economic impact, health coverage of the non-elderly population, poor and low-income uninsured, Medicaid and CHIP eligibility and health care financing.

From the report:

Pursuing national health care reform remains a priority for the President, Congress and the public. Policy-makers have committed to passing comprehensive legislation by the end of the year. Expanding coverage to the uninsured as well as addressing health care cost and quality issues have emerged as the dominant drivers for systematic reform. Leading health reform proposals rely on a combination of public and private approaches to expand coverage, control costs and improve quality with shared responsibilities across employees, employers, government, consumers and insurers.

In the absence of strong federal leadership, states began to expand coverage to reform their health care systems to address the growing number of uninsured residents in their state. By 2008, Massachusetts, Maine and Vermont enacted universal coverage plans for all of their residents and some other states have proposed comprehensive reform. However, state fiscal capacity, structural deficits and now a worsening economy and severe state budget shortfalls have limited states’ ability to further advance coverage initiatives. While we can learn from the experiences of pacesetting states to inform future federal action, the fiscal crisis makes it difficult for many states to achieve health care reform on their own.

As the health reform debate progresses, the impact of reform on individual states will vary based on their economic situation, current health insurance coverage, and health care expenditures. This analysis pulls together key information related to state variation.

The Henry J. Kaiser Family Foundation. (2009). State variation and health reform: a chartbook.

Full report: http://facts.kff.org/chartbooks/State%20Variation%20and%20Health%20Reform.pdf

This report from the Kaiser Family Foundation examines the impact of the economic recession on hospital emergency departments. 

From the report:

The Henry J. Kaiser Family Foundation, The Kaiser Commission on Medicaid and the Uninsured. (2009). Emergency departments under growing pressure. Paradise, Julia & Dark, Cedric.

Full report: http://www.kff.org/uninsured/upload/7960.pdf

This study examines the effect of the Medicare Prescription Drug Benefit (Part D) on other Medicare spending.  The study concludes that, for people who previously had little or no prescription coverage, savings on other medical care approximately offset the costs of extending prescription coverage to Medicare enrollees.  However, the study also found that medical spending increased in the group with the most generous prescription coverage.

Zhang, Yuting, Ph.D., Donohue, Julie M., Ph.D., Lave, Judith R., Ph.D., O'Donnell, Gerald, M.S., & Newhouse, Joseph P., Ph.D. The effect of Medicare Part D on drug and medical spending. The New England Journal of Medicine, 361:1, 52-61. http://content.nejm.org/cgi/content/short/361/1/52

Authors: Yuting Zhang, Ph.D., Julie M. Donohue, Ph.D., Judith R. Lave, Ph.D., Gerald O'Donnell, M.S., & Joseph P. Newhouse, Ph.D.

On June 29, the Center for American Progress released a report outlining a plan to ensure that a $1.2 trillion health care reform proposal remains deficit neutral.  The plan, endorsed by former senator Tom Daschle and Center for American Progress President John Podesta, supports taxing employer health benefits.  Authored by Harvard University economics professor David Cutler and Georgetown University public policy professor Judy Feder, the report proposes holding national health care spending to a set growth rate and initiating fail-safe proposals for the following year if cost growth exceeds the pre-set limit.

From the report:

Center for American Progress. (2009). Financing health care reform: a plan to ensure the cost is budget neutral. Cutler, David M. & Feder, Judy.

Full report: http://www.americanprogress.org/issues/2009/06/pdf/financing_health_reform.pdf