RAND Study: Health Care Bill Covers Most People At Lowest Government Cost

by Karoli on June 13, 2010 · 2 comments

in News

The Rand Corporation recently completed a comparison of 2000 different health policy scenarios and concluded that the Patient Protection and Affordable Care Act provides health insurance coverage to the largest number of people while keeping costs as low as possible.

That’s a remarkable conclusion from an organization that isn’t known for bias toward policy decisions made by Democrats.

Some specifics:

The study examined how the expected outcome of health care reform would have changed if components of the law were structured differently. For example, would more people receive coverage if companies with fewer employees were required to provide health insurance to workers or pay a penalty? And how might the cost to the federal government change if the income level for Medicaid eligibility was raised to a higher level?

Researchers simulated more than 2,000 different policy scenarios using the RAND COMPARE microsimulation model, which was designed by RAND to provide independent analysis about how different reform proposals would impact the American health care system.

The analysis 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.

For example, the RAND analysis 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. But this would require a combination of measures that would place a higher financial burden on the lowest-income segment of the nation’s population.

Rand also concluded that the alternatives were not likely to survive the political process:

“These alternative strategies strike us as politically challenging, if not untenable,” McGlynn said. “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.

This is the overlooked fact of health care reform. What passed is what could pass. We can have arguments until the cows come home about what should pass, or what the ideal is, but what we have is what was legislatively possible. In fact, I’d argue it was right on the edge of what was legislatively possible, especially when considered in light of the tight vote margins.

The Obama administration has not received much credit for actually achieving a goal progressives have held dear for 100 years or more. Whether this relates to disappointment over the compromises needed to secure passage, or idealistic expectations remains to be seen. The fact remains, this administration managed to move legislation through which was the absolute edge of what COULD be done. For that, they should be congratulated.

Rand Corp. Press Release

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