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This paper used the Health Insurance Policy Simulation Model to examine the impact on insurance coverage in government, employer, and family spending in all 50 states in absence of reform. In all states employer sponsored insurance would fall, and Medicaid enrollment and the number of uninsured would increase. Employer spending would increase despite drops in coverage. Government spending for public health insurance programs and for financing of uncompensated care would increase. The results differ among states depending on the distribution of employees by firm size and wage levels, the breadth of coverage in public programs and projected population growth.
What would happen to trends in health coverage and costs if health reforms are not enacted? Those are questions that are too often missing from the current debate. Earlier this year, researchers from the Urban Institute reported on the economic implications for the nation if the health reform effort were to fail.1 In this paper, we turn our attention to all 50 states to quantify the impact on insurance coverage and spending by government, employers, and families if health reforms are not enacted.
The report makes clear that the cost of failure would be substantial and felt in every state. The analysis shows that if federal reform efforts fail, over the next decade in every state, the percent of the population that is uninsured will increase, employer-sponsored coverage will continue to erode, spending on public programs will balloon, and individual and family out-of-pocket costs could increase by more than 35 percent.
Using the Urban Institute’s Health Insurance Policy Simulation Model, we examined the effects on coverage and costs for three alternative scenarios:
- Worst case—slow growth in incomes and continuing high growth rates for health care costs;
- Intermediate case—somewhat faster growth in incomes, but a lower growth rate for health care costs;
- Best case—full employment, faster income growth and even slower growth in health care costs.
Under any scenario, the analysis shows a tremendous economic strain on individuals and businesses in all 50 states and the District of Columbia if reform is not enacted. While all income levels would be affected, middle-class working families would be hardest hit. Within 10 years, under the worst-case scenario, we estimate that:
In 29 states, the number of people without insurance would increase by more than 30 percent. Under this worst-case scenario, the number of uninsured could grow by at least 10 percent in every state. All told, the number of uninsured Americans would reach 65.7 million.
Businesses would see their premiums continue to increase—more than doubling in 27 states. Even in the best case scenario, 46 states would see employer premium costs increase by more than 60 percent.
Every state would see a smaller share of its population with employer-sponsored insurance (ESI). Half of the states would see the number of people with ESI coverage fall by more than 10 percent.
Every state would see its Medicaid/CHIP spending rise by more than 75 percent by 2019. Half the states would face cost increases of more than 100 percent.
The amount of uncompensated care in the health system would more than double in 45 states. Even in the best case, uncompensated care would increase by more than 50 percent in 48 states.
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