Daily Archives: March 23, 2011

Simulating the Effects of Health Reform on the Uninsured

With all of the back-and-forth over health reform, it sure would be nice if we knew just how things would turn out as a result of the new law. After all, if we could demonstrate with some certainty that it would actually do a lot of good for a lot of people, some of its detractors might be silenced. At the same time, if it looked like things weren’t going to pan out, then perhaps the law ought to be repealed. Unfortunately, predicting the future is a difficult thing to do, but that doesn’t stop us from trying.

Enter Mark Hall, a professor from Wake Forest University, and Matthew Buettgens, an analyst at the Urban Institute. Using the Urban Institute’s Health Insurance Policy Simulation Model, Hall and Buettgens attempt to predict the future of the uninsured under health reform. Such simulations rely heavily on assumptions, and some of the assumptions are stronger than others. HHS is still writing regulations, for example, so what exactly those may contain is still a pretty open-ended question. But there is evidence to support some of the assumptions. For example, we can look at the experience of states, like Massachusetts, that have passed a similar law to see what has happened there, and we can base our assumptions on a body of prior research and theory that can help predict how people will respond to a variety of incentives.

Of course, this is where the mutual fund disclaimer enters: Evidence of past performance is not a guarantee of future returns. That’s certainly a valid caution, but when it comes to predicting the future, the past is often the best information we have. In fact, it’s the only thing we know with certainty. Anyone who makes claims about what will happen that aren’t based at least in part on what has happened before, may as well be blindly throwing darts.

Now, I’m not going to delve into the details of Hall and Buettgens’ work, for fear of losing some of you along the way, but you can read their report here. The take-home message is simple: Health reform will cover most, but not all, of the currently uninsured. Among those who remain uninsured, a little more than one-in-five would be undocumented immigrants who are exempt from the individual mandate and ineligible for federal assistance. Another two-in-five would be Medicaid eligible, but not yet enrolled, underscoring the importance of outreach and eligibility assistance efforts. Of the remainder, some would be exempt from the mandate for a variety of reasons, while others would be subject to the penalty for not having coverage, even though many of them would be eligible for a federal subsidy of their premiums.

Overall, health reform will lead to a reduction in the number of uninsured, but the full effect will take time as people will have to be educated about their options, purchase coverage, or be enrolled in Medicaid. It would be interesting to look at a multi-year projection, to see how reductions in the uninsured change over time as implementation rolls out. It’s pretty safe to assume–based on the experience in Massachusetts–that even a decade after full-implementation, we still won’t have reached everyone, for a myriad of reasons. But that’s to be expected, and shouldn’t dissuade the effort. After all, in two states I care about, Georgia and North Carolina, Hall and Buettgens project that the proportion of the population that is uninsured will fall by 12.6% and 10.4%, respectively. But percentages are a statistic. Numbers are people. And combined, nearly 2 million Georgians and North Carolinians will gain insurance coverage in the first year after health reform is implemented. With results like that, I personally cannot imagine repealing health reform.

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