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The Lewin Group Releases Comparative Analysis of HR 3200: The American Affordable Health Choices Act of 2009

July 27, 2009

Decision on Participants in “Public Exchange” Has Dramatic Affect on Costs

FALLS CHURCH, VA – July 27, 2009 – The Lewin Group today released its analysis of HR 3200: The American Affordable Health Choices Act of 2009. The study is the first to examine the overall impact of the legislation on all stakeholders, and how the determination of who is eligible to participate in the “public exchange” made by the proposed Commissioner of Health Choices would affect premiums, coverage and spending for the federal government, state and local governments, private employers and consumers. Key findings, regardless of public exchange eligibility, include:

  • The number of uninsured Americans would be reduced by 32.6 million;
  • Hospitals that accept Medicare and public plan reimbursements would see payments for services reduced by an average 32 percent below what private insurers pay for the same treatment
  • Likewise, payments for physician services would be reduced by an average 14 percent below what private insurers reimburse for the same treatment
  • Premiums for a public plan would be an average of 20 percent less than private insurance premiums for families, and 25 percent less for individuals. 

The analysis examined two scenarios that would result from a Commissioner’s determination of eligibility for the public plan option. In the first scenario, the Commissioner limits eligibility to individuals and employers with fewer than 20 workers. In the alternative scenario, the Commissioner permits all individuals and employers to enroll. According to the report:  

  • Public plan enrollment would increase by 33.6 million (if the exchange was open only to small firms) to 103.4 million (if the exchange was open to all);
  • Private plan enrollment would decrease by 34.9 million (if the exchange was open only to small firms) to 83.4 million (if the exchange was open to all);
  • Between 2010 and 2019, if participation is limited to individuals and small firms, the legislation would cost the federal government $902.7 billion before tax increases and Medicare/Medicaid payment reforms, and $100 billion after those changes;
  • If all Americans are permitted to participate in the public exchange, total cost to the federal government over the same ten year period, before offsets, would be $858 billion, and $55.3 billion after the changes;
  • State and local governments would spend $67.8 billion less than they currently do if eligibility is limited to small firms, $158.3 billion less than they currently do if the exchange is open to all.  

“Our independent study shows how the decision whether or not to include all employers in the public option will have a profound impact on the costs of this legislation on government, employers and families,” said John Sheils, vice president of The Lewin Group.  

The Lewin Group report makes no judgment with regard to the merits of the bill or how it should be implemented. The objective of the study was to understand how alternative proposals for enacting the legislation would affect various public and private stakeholders. The report includes extensive discussion of the Act and its effects on each stakeholder.  

Click here to access the report. 

For more information, visit www.lewin.com.

 About The Lewin Group

The Lewin Group is a premier national health care and human services consulting firm with nearly 40 years’ experience finding answers and solving problems for leading organizations in the public, nonprofit, and private sectors. With its industry experience and knowledge, The Lewin Group provides its clients with high-quality products and insightful support to help them maximize the delivery of programs and services that make a difference in the lives of their constituents. For more information on The Lewin Group, visit www.lewin.com.

The Lewin Group is an OptumInsight company.  OptumInsight, a wholly-owned subsidiary of UnitedHealth Group, was founded in 1996 to develop, acquire and integrate the world's best-in-class health care information technology capabilities.  For more information, visit www.optuminsight.com.  The Lewin Group operates with editorial independence and provides its clients with the very best expert and impartial health care and human services policy research and consulting services.

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