The Center's work on 'Health Policy' Issues

The Center works to ensure that federal and state health insurance programs provide coverage that meets the health care needs of low-income children and families, as well as seniors and people with disabilities. The Center also works to remove barriers preventing eligible families from gaining access to health coverage.

Projected Health Spending Has Fallen Since 2010, Even With Health Reform’s Coverage Expansions

January 28, 2015 at 11:20 am

The Congressional Budget Office (CBO) now projects that federal health spending — including the costs of health reform’s coverage expansions — will be about $600 billion less over 2011-2020 than CBO projected in January 2010 without health reform (see figure).

In other words, projected health spending over the decade has fallen by $600 billion since 2010, despite $1 trillion in additional spending for premium tax credits and expanded Medicaid to help cover 27 million more Americans.

The decline in projected spending, which continues a pattern of downward revisions to CBO’s projections in recent years, stems from several factors.  One is health reform’s cuts in payments to Medicare providers and health plans.  Another is the recession, which has reduced the demand for health care services by slowing income growth.

But CBO and other experts have also concluded that a substantial part of the health care cost slowdown reflects structural changes in the health care system.  Professional associations, hospitals, and doctors are taking steps to curb costly and ineffective procedures and treatments.

CBO’s new report says, “Although views differ on how much of the slowdown is attributable to the recession and its aftermath and how much to other factors, the slower growth has been sufficiently broad and persistent to persuade [CBO and the Joint Committee on Taxation] to significantly lower their projections of federal health care spending.”

Health reform itself has most likely contributed to the slowdown as well.  As Kaiser Family Foundation President Drew Altman has written, “Even though its direct effects on system-wide costs may be limited so far, I believe Obamacare is having a significant indirect effect, although cause and effect and the magnitude are hard to prove. . . .  [It] is entirely likely that Obamacare has played and will continue to play a role in the slowdown in health-care cost growth and accelerating market change.”

To be sure, federal health spending — even if cost growth remains moderate — will keep rising as more baby boomers become eligible for Medicare and Medicaid.  Making the U.S. health care system more efficient thus remains a major budget challenge.  But CBO’s latest projections show that we’ve already made substantial progress.

Ending Subsidies in Marketplace States Would Hurt Diverse Group

January 26, 2015 at 1:31 pm

I recently cited studies from the Urban Institute and RAND Corporation showing that millions more Americans would be uninsured and premiums would rise significantly if the Supreme Court overturns health reform subsidies for people getting coverage through the federal marketplace.  A follow-up Urban report tells us more about the 8.2 million people estimated to lose coverage.  Of those losing subsidies and becoming uninsured:

  • 81 percent are full- or part-time workers;
  • 62 percent live in the South;
  • 61 percent are white, non-Hispanic; and
  • 60 percent have incomes below twice the poverty line.

Importantly, the report points out that “[e]stimates presented in this analysis reflect effects at a point in time, and therefore understate the number of people who would be affected over the course of a year and over multiple years, as individuals’ employment and income fluctuate.”  (Emphasis added.)

One reason why many of the people losing tax credits would end up uninsured is that they don’t have an offer of employer coverage.  Urban estimates that almost two-thirds of those now receiving tax credits have a family member who works at a small firm (fewer than 50 workers) and just over a quarter have a family member who is self-employed.  About 15 percent of those receiving tax credits are between ages 55 and 64, many of them likely early retirees.  These aren’t static categories, of course; people retire, start a business, and change jobs all the time.

Before health reform, many Americans found health coverage expensive or even unavailable — especially older people not yet eligible for Medicare and those with chronic conditions or a history of illness.  It’s critical that the Supreme Court not turn back the clock for millions of people who need help getting coverage, now and in the future.

Medicaid Eligibility for Low-Income Adults Lags Badly in Non-Expansion States

January 22, 2015 at 12:51 pm

The 23 states that haven’t expanded Medicaid as part of health reform have very limited Medicaid eligibility for non-elderly low-income adults, the latest annual survey of state health program officials from Georgetown University’s Center for Children and Families and the Kaiser Family Foundation finds.  That’s a key reason why 4 million uninsured adults remain in a “coverage gap” in non-expansion states, with incomes too high for Medicaid but loo low for subsidies to buy coverage through health reform’s marketplace.

By and large, non-expansion states have kept Medicaid eligibility for low-income adults at the very low income levels in place before health reform took effect.  In the typical non-expansion state, parents only qualify for Medicaid if they have incomes less than 45 percent of the poverty line, or less than $9,000 a year for a family of three, according to the report.  And in nearly every non-expansion state, non-disabled non-elderly adults without children don’t qualify for Medicaid no matter how low their income is.  (See chart.)

By comparison, in the 27 states and the District of Columbia that have expanded Medicaid, non-elderly adults with incomes below 138 percent of the poverty line ($27,000 for a family of three) are eligible for Medicaid.

Most of the 4 million adults in the coverage gap either work or are in a family with a worker, the Kaiser Family Foundation previously reported.  Research shows that for most low-wage workers, their employer either doesn’t offer coverage or doesn’t offer coverage that they can afford.

States that have expanded Medicaid have enjoyed especially large gains in insurance coverage since health reform’s major coverage expansions took effect in January 2014.  For states like Idaho, Utah, and Montana, which are seriously considering expanding Medicaid this year and have very limited Medicaid eligibility, the Medicaid expansion offers a surefire way to achieve similar progress.

Medicaid-Eligible Children Grow Up to Earn More and Pay More in Taxes

January 21, 2015 at 12:01 pm

People eligible for Medicaid in childhood earn more as adults, and thus contribute more in federal taxes, than other low-income people who weren’t eligible, a recent promising study published by the National Bureau of Economic Research (NBER) finds.  And those benefits, which help offset the cost of providing Medicaid coverage, grow with each year of eligibility.

These findings are the most recent evidence of Medicaid’s wide-ranging benefits to the nation as well as enrollees.  Nearly 30 million Medicaid enrollees — half of all people with Medicaid coverage — are age 18 or under.

Analysts from the Treasury Department and Yale University examined IRS data for people born just before Congress expanded Medicaid coverage for children in the mid- to late 1980s.  These people contributed $186 more in total taxes through age 28 for each additional year they were likely Medicaid-eligible as children.

Other findings from the study suggest potential explanations:  People with more years of likely Medicaid eligibility received less from the Earned Income Tax Credit, had lower mortality rates, were more likely to attend college, and (among women) had higher wages, for example.

Because of their increased tax contributions, “we conclude that the government recoups 14 cents for each dollar that it spent on Medicaid for children by the time they reach age 28,” the authors conclude.  By age 60, they add, the government recoups 56 cents on the dollar.

Although more research is needed to confirm these findings, the NBER-published study — the first to examine the long-term economic impacts of additional years of Medicaid eligibility — contributes to a larger body of research on Medicaid’s positive impacts both in and beyond health care.

Recent research in Oregon, for example, shows that enrolling in Medicaid improves access to health care and reduces medically related financial hardships.  Studies have also shown the long-term health benefits of expanding Medicaid, such as a national study finding that people more likely to be eligible for prenatal and infant care through Medicaid were healthier in young adulthood.

Fewer People Having Trouble Paying Medical Bills

January 20, 2015 at 3:55 pm

Fewer people skipped needed health care due to its cost or reported trouble paying medical bills in 2014, a new survey finds.  These improvements, the first since the Commonwealth Fund began asking these questions roughly a decade ago, came as health reform’s major coverage expansions took effect in 2014.

Among the survey’s findings:

  • The number of people ages 19-64 without health insurance showed a statistically significant drop for the first time in the history of the biennial survey, from 36 million in 2012 to 29 million in 2014. The share of the population without insurance fell from 19 to 16 percent.
  • The share of people who failed to get needed health care because of cost fell from 43 percent in 2012 to 36 percent in 2014. This means fewer people said they skipped a recommended test, didn’t fill a prescription, avoided visiting a doctor or clinic when having a health problem, or failed to see a specialist for needed follow-up care.
  • The number of adults who reported problems with medical debt (such as difficulty paying bills) fell from an estimated 75 million in 2012 to 64 million in 2014.  The share of the population reporting these problems fell from 41 to 35 percent.
  • Critics of health reform suggested it would harm young adults, but the opposite appears to be the case. People ages 19-34 made the biggest coverage gains of any age group between 2012 and 2014, with those with incomes below about $47,000 for a family of four seeing the greatest improvement.

As the survey report notes, the gains in health coverage—and the related reductions in people’s financial problems — may partly reflect an improving economy.  However, the coverage gains were far greater in the recovery from the 2007-09 recession, just as health reform took effect, than in the recovery from the previous (2001) recession, our analysis of Centers for Disease Control and Prevention data shows — a sign that health reform’s coverage expansions also played an important role.

Health reform enabled millions of people to obtain more affordable coverage in 2014, through both the Medicaid expansion in many states and the creation of insurance marketplaces that provide federal subsidies to reduce people’s premiums and cost-sharing charges.  Health reform also improved access to coverage by barring health insurers in the individual market from denying coverage or charging higher premiums to people with health problems, and it limited how much insurers could charge older people compared to younger people.

Even before 2014, the law began improving access to coverage, including by requiring most insurance plans to cover adult dependents up to age 26 beginning in 2010.

Millions of Americans still have trouble affording health care, and we need to do more to address that problem.  But, in part due to health reform, the situation is looking up.