Study Projects Health Reform Will Slow Cost Increases, Benefit Colorado’s Economy
Denver, CO – A new issue brief from The Colorado Trust sheds light on what the budgetary impacts of federal health care reform may be on Colorado families, businesses and the state. The Economic Impact of Health Reform in Colorado [1] highlights findings from an in-depth study [2] that assessed the effects of health care reform on the Colorado economy. Because the study began prior to the passage of federal health care reform, it was based on the recommendations of Colorado’s 208 Commission. Conducted by the New America Foundation, a nonpartisan research organization, and validated by The University of Denver’s Center for Colorado’s Economic Future, the study was commissioned and supported by The Colorado Trust and the Colorado Health Foundation (available at www.coloradotrust.org [3]). This new issue brief summarizes the study and updates selected findings to reflect the specifics of the Affordable Care Act (ACA).
“The findings of this study are promising in light of Colorado’s ongoing implementation of the federal reform law. Without any reform, health insurance premiums are predicted to continue to increase at twice the rate of the average Coloradan’s wages, ultimately taking up 40% of the average family’s income in the next few years, a seemingly overwhelming burden,” said Ned Calonge, MD, President and CEO of The Colorado Trust. “This study shows that federal health care reform will help to slow health care cost increases and spur economic activity, better enabling Coloradans to get the care they need to stay healthy.”
The study sheds light on what the actual budgetary impacts of federal health care reform may be on Colorado families, businesses and on the state, including:
- Slowing Growth in Costs. It projected that health care cost growth will be between 5.5% and 17% lower in Colorado by 2019 than it would have been without reform.
- Lower Premiums. This translates into premiums for employer-sponsored insurance in 2019 that are between 10% and 25% lower due to lower overall cost growth. It also means that families and businesses in Colorado could expect premiums for employer-sponsored insurance to be $1,962 less per year for individual coverage and $3,917 less per year for family coverage in 2019 than they would have been without federal health care reform.
- Economic Benefit. As well, the study projects that increasing health insurance coverage in Colorado will spur increased economic activity and create more jobs, even after accounting for the costs of financing reform. In 2019, state economic output should be nearly 1% higher than it would be without health care reform and there will be roughly 19,000 new jobs as a result of the coverage expansion.
The study’s research points to several key reasons for these savings, including efforts to:
- Expand coverage and lower uncompensated care costs. It is estimated that uncompensated care would have cost Coloradans $1.8 billion dollars in 2019 without federal health care reform. The ACA calls for expanded coverage, equalization of Medicaid reimbursement levels and for private payers to hold down their cost increases.
- Make the medical system more efficient. The ACA encourages health system reforms such as paying health care providers for value rather than for volume and the expansion of programs like medical homes, accountable care organizations and health information technology.
- Increase economic activity and new jobs. As more Coloradans obtain health insurance and seek medical care, there will be an increased demand for health care workers. In turn, this increased demand will lead to more health care-related job opportunities in Colorado, resulting in more individuals with disposable income to buy other consumer goods from Colorado businesses.
- Improve productivity with improved health. The economic losses from the uninsured are between $1.82 billion and $3.87 billion in Colorado per year. At least some of this value could be recouped through healthier, more productive workers who would earn more income and thereby increase the state’s tax base.
Download The Economic Impact of Health Reform in Colorado [1] or order print copies by emailing receptionist@coloradotrust.org [4]. Also available for download is the full study, The Future of Colorado Health Care: An Economic Analysis of Health Care Reform and the Impact on Colorado’s Economy [2], conducted by the New America Foundation and validated by The University of Denver’s Center for Colorado’s Economic Future, with support from The Colorado Trust and the Colorado Health Foundation.
The Colorado Trust – www.coloradotrust.org [3] – is a grantmaking foundation dedicated to achieving access to health for all Coloradans.