The Impact of the American Affordable Health Choices Act of 2009

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July 28, 2009
To: Interested Parties
From: Center for Health Policy Studies, The Heritage Foundation
Re: The Impact of the American Affordable Health Choices Act of 2009


The Heritage Foundation commissioned The Lewin Group, a highly respected health care policy and management consulting firm, to examine the impact of the American Affordable Health Choices Act of 2009 (H.R. 3200). Among other provisions, the bill would create a new public plan, modeled on Medicare, to compete with private health plans in a newly established health
insurance exchange. In addition to national results, Lewin produced state level impacts of the draft legislation for a select group of states: Maine, Virginia, New Mexico, Montana, Nebraska, and Pennsylvania.
In its analysis, Lewin presents data estimating the impact of the bill, assuming eligibility to the exchange is open to all employers beginning in year three, on sources of coverage and potential changes in physician and hospital incomes. The highlights of the national report include:

Effects on Private Coverage and the Uninsured
• 48 percent of privately insured Americans would transition out of private insurance. Of the estimated 172.5 million people with private health insurance, there would be a decline of 83.4 million people with private coverage.
• 56 percent of Americans with employer-based coverage would lose their current insurance. Of the estimated 158.1 million Americans with employer-based coverage, 88.1 million people would be shifted out of their current employer-based plan.
• 80 percent of Americans in a health insurance exchange would end up in the public plan. Of the estimated 129.6 million people who would obtain coverage through an exchange, 103.4 million people would be covered by the public plan.
• 34 percent of the uninsured in America would still lack coverage. Of the estimated 49.1 million people without health insurance, the legislation would only reduce the uninsured by 32.6 million people, leaving 16.5 million people without coverage.


Effects on Physicians and Hospitals
• Physicians would see their payment levels decline by $31.7 billion as a consequence of the new public plan. While physician net income may increase under the bill primarily due to other Medicare changes, a public plan with Medicare-based payments would lower reimbursements. Today, Medicare physician payments are, on average, 81 percent of private payments.
• Hospitals could see their net annual income fall by $61.9 billion, which roughly eliminates hospital total margins. This significant loss in hospital income is also overwhelmingly attributable to the public plan using Medicare-based payments. Today, Medicare hospital payments are, on average, 68 percent of private payments.


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The above is a summary of the findings.

Follow this link below the summary details to get the whole article with tables, graphs, and more detailed explanations.

http://www.heritage.org/research/hea...tional_all.pdf

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