View Research by Author - Bowen Garrett

Publications

In this report, the authors examine how the Affordable Care Act (ACA) will impact labor costs and the demand for labor. They conclude that the ACA will not have noticeable effect on net levels of employment for three reasons - (1) the net new expenditures are too small relative to the overall size of the economy; (2) the negative effects on jobs of Medicare premium cuts and new taxes will be offset by the expansion of coverage through Medicaid and income related subsidies that will likely increase employment; and (3) the new law will not affect the most firms either because they already provide private insurance that meets federal standards or they are exempt from the new requirements because they employ fewer than 50 workers.

Some have argued that the Patient Protection and Affordable Care Act would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform. A new study finds that overall ESI coverage under the ACA would not differ significantly from what coverage would be without reform. The average employer contribution per person covered by ESI would decrease by nearly 8 percent for small firms and would decrease slightly for larger firms. Total employer health care spending would be 0.6 percent lower under the ACA.

With conflicting rulings about the constitutionality of the individual mandate in the Affordable Care Act (ACA), we are left to wonder: what would the ACA look like if its individual mandate was dropped? A new report using the Urban Institute's Health Insurance Policy Simulation Model (HIPSM) shows that the number of uninsured would be cut by more than half with the mandate, but by only about 20 percent without the mandate. Uncompensated care would decline by $42.4 billion under the ACA, but only by $14.7 billion under reform without a mandate because of the large number of people remaining uninsured.

Using the Urban Institute's Health Insurance Policy Simulation Model (HIPSM), the authors estimate how the Patient Protection and Affordable Care Act would affect health insurance coverage and spending on acute care for the nonelderly. They find that, for example, under the ACA, the number of nonelderly adults without health insurance would decline by 27.8 million, the cost of uncompensated care provided to the uninsured would drop by 61 percent, the Medicaid expansion would enroll 16.8 million more people, and 43.8 million would be covered through health insurance exchanges (both nongroup and SHOP).

In 2005, CMS implemented a prospective payment system (PPS) to pay for Medicare services provided by inpatient psychiatric facilities (IPFs). Using FY 2003 administrative data, this study independently replicates the analyses used in developing the IPF PPS. It considers alternative comorbidity classifiers and conducts the first facility-level analyses of the IPF-PPS. Payments are found to vary less than proportionately with costs at the facility level, suggesting payments may not fully reflect the higher costs of facilities that treat sicker patients. It also demonstrates how an expansion of the current set of comorbidities would more closely match payments to patient costs.

This memo updates models of non-therapy ancillary (NTA) costs for skilled nursing facilities (SNFs) designed to improve the accuracy of Medicare payments to SNFs. Using 2007 data for SNF stays provided by CMS, we obtain estimates that are qualitatively similar to those we obtained using 2003 data. The revised models add new variables suggested by CMS and exclude variables identified as being difficult to administer. Parsimonious models are estimated that can explain up to 22 percent of cost variation. The findings suggest that a range of options are available that would greatly improve the accuracy of Medicare payments.

Recent announcements by prominent insurers in several states of very large premium increases have attracted much attention. Many are concerned that this could become a trend. In this report, the authors examine the effects of premium increases much higher than the rate of health care cost growth on coverage, costs and the decisions by small firms to offer ESI. They find that such increases would adversely affect low- to middle-income families and older, nonelderly persons most, though there would be significant loss of coverage even among higher income families. Fewer small employers would choose to offer insurance to their workers.

This report assesses the changes in coverage patterns and health care costs that will occur nationally if major reforms are not enacted. The authors find that by 2015, there could be 59.7 million people uninsured. The number could swell to 67.6 million by 2020, up from an estimated 49.4 million in 2010. As premiums nearly double, employees in small firms would see offers of health insurance almost cut in half, dropping from 41 percent of firms offering insurance in 2010 to 23 percent in 2020. Individual spending could jump 34 percent by 2015 and 79 percent by 2020.

In this report the authors estimate that under the health reform bill passed by the Senate, the cost of uncompensated care will fall from $62.1 billion in 2009 to $46.6 billion in 2019. If no health reform is enacted, they project that uncompensated care would rise to between $107 and $141 billion in 2019. Over the six-year period of proposed health reform legislation, 2014–2019, the costs of uncompensated care without health reform would be between $560 and $700 billion. With reform, the cost would be $330 billion under the Senate bill and provide substantive savings to each level of government.

In this brief, we estimate that the annual cost of uncompensated health care for the uninsured would decrease from $61 billion to $25 billion under health reform legislation passed in the House. Because the government finances about three-quarters of uncompensated care, up to $27 billion per year could be used to offset the expansion of Medicaid and subsidies to employers and individuals. Overall, employers' net costs would increase by 2.9 percent over the current system, but small employers' net costs would decrease 8 percent due to employer subsidies, the expansion of Medicaid, and exemptions from penalties for not offering insurance.

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