The potential savings that can be achieved through health reform vary markedly, depending on whether or not a public insurance plan option is included and how it is structured, according to a new analysis from The Commonwealth Fund. The report compares three different scenarios: one that includes a public plan option in which healthcare providers would be paid at rates that fall midway between current Medicare rates and private plan rates, among other payment reforms; one that includes a public plan option that links payments more closely to Medicare rates; and one that includes no public plan, relying exclusively on private plans.
Cumulative health system savings between 2010 and 2020, compared with projected trends for that period, would range from a high of $3.0 trillion under the approach that includes a public plan paying providers at Medicare rates in competition with private plans, to $2.0 trillion for a public plan paying providers at rates midway between current Medicare and private plan rates, to $1.2 trillion in the private plan scenario, according to the study.
Under all three scenarios, near universal coverage would be achieved. Assuming reforms start in 2010, the number of uninsured Americans would drop to 4 million by 2012 (1 percent of the population) and remain low. Without reform, the number uninsured is expected to rise to 61 million by 2020.
Hospital and physician revenues would continue to grow under all three scenarios, but at a slower rate. Reforms that insured everyone and raised Medicaid’s payment rates to Medicare’s would infuse new revenues and eliminate the need for implicit cross-subsidies built into current charges to private insurers, according to the study.
