Summary by The Market Institute of an Urban Institute policy analysis.
The publication of this summary does not constitute an endorsement of the positions presented.
A Urban Institute Policy Analysis, dated February 18, 2014, argues that disruption to Americans’ health coverage is inevitable in any scenario of healthcare reform. In the case of Obamacare, 84% of Americans have seen their health insurance been disrupted in order to extend insurance to the 16% of people without it. However, it is not possible to reform the American healthcare system without disruptions across coverage. Furthermore, the ACA’s disruption is far more modest than any other coverage expansion strategy that has been presented. Single-payer proposals on the left and market based proposals on the right would both disrupt health coverage even more than the current model.
Unlike previous healthcare reform proposals, like the Clinton Administration’s in the early 1990’s, the ACA fundamentally does not alter coverage for the millions of workers that are covered under their large employers. Analysis of ESI (Employer Sponsored Insurance) has shown that Obamacare will have a negligible impact on coverage. Policies in the ACA address limitations of the individual market, requiring insurers to accept everyone, regardless of health status; prohibiting rate variation based on health status and gender and limiting rate variation based on age; requiring coverage of “minimum essential health benefits” defined to cover the range of services health professionals typically provide; and prohibiting annual and lifetime dollar benefit caps. By creating a broad risk pool, these policies enable people to contribute when they are healthy so they can receive benefits when they get sick.
The left’s proposal of a single payer system, which would essentially create a public insurance pool, but coverage would undoubtedly be less generous and more costly for some Americans and more generous and less costly for others. Such a shift would disrupt 170 million people who currently rely on ESI, along with the 11 million people in the individual market. Conservatives’ proposal of a flat tax credit for purchasing individual health insurance would disrupt the coverage of millions of Americans who depend on ESI. Disruption is inherent in any approach that corrects the risk segmentation of unregulated markets and the ACA is the best avenue at mitigating disruption.
Read full UI Policy Analysis: http://www.urban.org/publications/413027.html
