The RAND Corporation has issued a series of reports outlining the impact that national healthcare reform will have on individual states, estimating the increased costs and coverage that are expected in five diverse states once reform is fully implemented in 2016.
In all of the states studied – California, Connecticut, Illinois, Montana and Texas – the proportion of uninsured residents declines significantly under health reform. Government costs will rise in four of the states, primarily due to increased spending on Medicaid, the study found.
RAND researchers said the selected states offer geographic distribution and include both large and small states.
The state-level reports estimate the impact of the major coverage provisions of the Affordable Care Act, including estimates of where people will obtain insurance and how it will change state spending. The work was sponsored by the Council of State Governments.
[See related news: Republicans' 2012 budget plan alters Medicare, Medicaid.]
RAND researchers said the estimates are intended to help elected officials and policymakers anticipate the choices that will likely be needed by individuals, employers, insurance companies and governments as various provisions of health reform are implemented.
"As states move forward preparing for the many provisions of healthcare reform, it's important for them to have an adequate forecast of what is ahead," said Christine Eibner, a co-author of the study and an economist at RAND, a nonprofit research organization.
Researchers said they used a model to estimate how health coverage expansion policies affect state residents who obtain or change sources of health insurance, the types of plans they enroll in, and changes in private and public sector spending.
The study indicates many non-elderly residents will buy coverage through insurance exchanges being set up in each state.
In most cases, the majority of new Medicaid enrollees will be newly eligible, but increased enrollment of those previously eligible will cost the states more because the federal government heavily subsidizes newly eligible enrollees, the study found.
[See also: MACPAC releases inaugural report on Medicaid and CHIP programs.]
Total healthcare spending will increase in four states, researchers discovered. Spending will decrease in Connecticut because some low-income individuals previously covered under the state's own insurance plan will now be covered under Medicaid, and the federal government will pay a large portion of their costs.