Health insurers opposed to the Obama Administration’s plan for a government-run health insurance exchange for individuals and small businesses should give a careful read to this month’s Congressional testimony by Karen Davis, president of The Commonwealth Fund.
Davis cites research suggesting that a healthcare exchange, along with other reforms, “could slow the growth in national health spending from a 6.7% annual rate of growth over the 2010–2020 period to 5.5%.”
The result would be $3 trillion in savings through 2020. Employers alone would save $231 billion, state and local governments $1 trillion, and households $2.3 trillion (or $2300 per family in the year 2020 alone). Furthermore, she notes, the number of uninsured would drop to less than 1% of the population by 2012.
These are the kind of numbers that get people’s attention.
I spoke to Davis this week, and the challenge she threw down to the health insurance industry was basically as follows: Can you get to 5.5%? In other words, can the insurance industry control costs? Considering that managing costs is supposed to be among the industry’s reasons for being, you’d think it would have a ready answer.
What exactly would a government-run insurance option look like? Below is a chart included in Davis’ testimony showing what the benefit design might include. Also below, a couple of additional Commonwealth Fund charts on projections for healthcare costs and the uninsured before and after reform.
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