Uninsured number down, government costs up by 2016, RAND study finds

The proportion of uninsured residents will decline significantly under health reform initiatives once reform efforts are fully implemented by 2016, according to an examination by the RAND Corporation. However, government costs would rise, primarily through increased Medicaid spending. 

Focusing on five diverse states selected to provide a good geographic distribution -- California, Connecticut, Illinois, Montana and Texas -- researchers used a microsimulation model developed by RAND to estimate how healthcare coverage policies would impact state residents who obtain or change sources of health of insurance, the types of plans they enroll in, and the changes in private and public sector spending. 

Overall, the percentage of employees offered insurance is not expected to change substantially, according to the RAND study. However, a small number of employees in smaller firms -- identified as those with less than 100 employees in 2016 -- will obtain employer-sponsored insurance through the state insurance exchanges in 2016.

However, "substantial numbers" of the nonelderly will choose to buy coverage through the exchanges in 2016. Among the states, RAND predicted that number would be 17 percent of California's population (6 million); 10 percent of Connecticut's population (310,000); 11 percent of Illinois's population (1.1 million); 20 percent of Montana's population (140,000); and 18 percent of Texas's population (4 million).

In many cases, the majority of new Medicaid enrollees will be newly eligible. However, the increased enrollment of those previously eligible will cost the states more because the federal government will be heavily subsidizing the newly eligible enrollees.

For more details:
- view the RAND briefs