A look at policy pathways for health insurance reform: 3 takeaways

Health insurance form payer plan enroll
A new study models some of the potential policy pathways to increased or universal insurance coverage. (Valeriya/Getty)

There may be a path to universal coverage without needing a single-payer overhaul, a new report shows. 

Researchers at the Urban Institute, a left-leaning think tank, modeled eight potential paths for health insurance reform ranging from moderate enhancements to the Affordable Care Act (ACA) to massive overhauls that would eliminate private payers entirely. 

The analysis is backed by the Commonwealth Fund. It follows on a recent survey that indicates many voters feel as though they’re not informed enough to form a solid opinion on health reform proposals like “Medicare for All,” which are dominating headlines as the 2020 Democratic primary marches on. 

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David Blumenthal, M.D., president of the Commonwealth Fund, said on a call with reporters that it’s crucial for both policymakers and the public to understand the directions health reform could take in the coming years. 

“We believe it is important to evaluate the impact of all proposals from those that build on the Affordable Care Act to wholesale health system overhauls,” Blumenthal said. 

RELATED: Policy to bring down drug prices can’t begin and end with rebates, study says 

Here’s a look at three key takeaways from the analysis: 

Single payer may not be the only path to universal coverage 

The Urban Institute researchers evaluated six different levels of changes that would build on the groundwork laid by the ACA, including two options they said could achieve universal health coverage. 

Their first universal coverage model would boost premium subsidies in the ACA markets, establish a nationwide reinsurance policy, reinstate the individual mandate penalty, establish a public option plan and allow workers to access subsidized nongroup plans. It would also implement continuous auto-enrollment to promote universal coverage continually. 

RELATED: The problem with dubbing single-payer plans 'Medicare for All'

Under this model, the researchers estimate 25.6 million people would gain coverage, though the benefits would not extend to undocumented immigrants living in the U.S. This approach would increase federal spending by $122.1 billion if implemented in 2020 and by $1.5 trillion over the next decade.  

National health spending would decrease by $22 billion in 2020 under this model. 

The researchers also examined a version of this model with even more generous premium and cost-sharing subsidies and found that the coverage gains would remain the same. Federal spending would increase by $161.8 billion in 2020 and $2 trillion over 10 years. National health spending would decline less under this approach, by $19.1 billion in 2020. 

No matter the model, a fight with providers is inevitable 

One of the key political trade-offs in the debate over which pathway is best is how to set provider rates. States such as Washington that have attempted to implement a public option have run into intense pushback from providers who are concerned about lower reimbursement rates. 

Washington officials initially aimed for a rate closer to Medicare rates, but ended up with a plan that pays providers at 160% of Medicare

RELATED: What states mean by a 'public option'

Linda Blumberg, a fellow at the Urban Institute and one of the report’s authors, said on the call that a key challenge in designing a national insurance reform plan is to strike a balance between curbing costs and ensuring providers can keep working. 

She noted that a plan using a public option would impact smaller pockets of patients instead of a nationwide single-payer system, which may be easier for providers to adapt to. However, providers will need a gradual on-ramp to potentially lower payments in any of these models. 

“It would be unwise to go from where we are now to Medicare rates in one step,” Blumberg said. “Think about that path from where we are now to where we potentially want to be in the future.” 

How to pay for 'Medicare for All' is still the looming question 

One piece that the researchers did not analyze was how the federal government could raise the funds necessary to pay for a single-payer system. 

The Urban researchers estimate that the most extensive system they modeled—which would extend care to undocumented immigrants and provide coverage for dental care, hearing care, home health and long-term supports—would cost the federal government $34 trillion over the next decade. 

Blumberg said the analysts did not model specific tax approaches or fundraising strategies, but she said the feds would likely need to take a mixed approach if Medicare for All is made the law of the land, including potentially payroll taxes, wealth taxes or income taxes. 

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