Content area
Full Text
POLICY INSIGHT
ABSTRACT The return of a Democratic administration to the White House, coupled with coronavirus disease 2019 (COVID-19) pandemic-induced contractions of job-based insurance, may reignite debate over public coverage expansion and its costs. Decades of research demonstrate that uninsured people and people with copays and deductibles use less care than people with first-dollar coverage. Hence, most economic analyses of Medicare for All proposals and other coverage expansions project increased utilization and associated costs. We review the utilization surges that such analyses have predicted and contrast them with the more modest utilization increments observed after past coverage expansions in the Us and other affluent nations. The discrepancy between predicted and observed utilization changes suggests that analysts underestimate the role of supply-side constraints-for example, the finite number of physicians and hospital beds. Our review of the utilization effects of past coverage expansions suggests that a first-dollar universal coverage expansion would increase ambulatory visits by 7-10 percent and hospital use by 0-3 percent. Modest administrative savings could offset the costs of such increases.
With a Democratic administration soon to be in charge in Washington, D.C., another round of the hundred-yearlong American health care reform debate may be on the horizon. The nation's health care financing system was under strain even before the coronavirus disease 2019 (COVID-19) pandemic caused economic dislocation and health coverage loss. The number of uninsured people had begun to increase from the post-Affordable Care Act (ACA) nadir,1 and the affordability of care was worsening.2 The Supreme Court's consideration of the constitutionality of the ACA in California vs. Texas also sets the issue of health coverage into sharp relief. Although President-Elect Joe Biden has pledged to expand coverage, the faltering economy and strained federal budget may increase pressure to constrain costs and bolster concerns that a major expansion of public coverage is unaffordable.
However, focusing only on the impact of health care reform on government expenditures is short-sighted.3 Of course, the effect of reform onpublicbudgets is important: Newgovernment expenditures must be financed through raising taxes, diverting revenues from other programs, or increasing deficits. These impacts have political and economic ramifications. Yet the most salient measure of a reform's "affordability" is its impact on overall national health expenditures, the aggregate amount spent on health care....