Report: Coverage will expand dramatically; costs will not

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By Consumers Union on Monday, August 1st, 2011

One of the most common questions surrounding the new health reform law was whether it could expand health insurance coverage without breaking the bank. Fortunately, a new report from actuaries in the Center for Medicare and Medicaid Services (CMS) estimates that it can.

In fact, as economist and lead author Sean P. Keehan noted in introducing the report, the Affordable Care Act is expected to allow an additional 30 million Americans to gain access to coverage while only increasing healthcare expenditures one-tenth of one percent (0.1) more than without the plan.

According to healthcare writer Merrill Goozner in Business Insider,  the cost of this massive coverage expansion will add only “a sliver to overall spending, and that increase is about half the projected growth rate of a year ago.”

While this is grounds for optimism on its own, it’s important to note that the actuaries did not include in their estimates the potential cost savings from numerous changes in the way healthcare will be delivered under the new law. As White House Deputy Chief of Staff Nancy-Ann DeParle wrote, “We know these new provisions will save money for the healthcare system, even if today’s report doesn’t credit these strategies with reducing costs.”

We’ll be watching closely as these provisions are developed to make sure the final products protect consumers and maximize cost savings. Stay tuned for more updates.

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