Studies find proposed health care reforms offer big savings to individuals, families

Four million Californians who are uninsured, have unaffordable job-based coverage or who are buying coverage in the individual market, would be eligible for Medicaid or subsidized coverage under bills under consideration in the U.S. Congress, according to a new study from the University of California, Berkeley.

The research by UC Berkeley’s Center for Labor Research and Education is the first to analyze how proposed reforms would impact people buying coverage in the individual market or those who have unaffordable job-based coverage in the state, said Labor Center chair and co-author Ken Jacobs.

In the study, “Californians’ Access to Coverage Under the Health Reform Proposals” (online at the Labor Center homepage), Jacobs and research associate Dave Graham-Squire analyzed data from the 2007 California Health Interview Survey and found:

• Close to 2 million Californians who are uninsured, in the individual market for health coverage, or who had unaffordable employer-sponsored insurance would qualify for Medicaid, and an additional 2 million would receive subsidies under each of the bills.
• Some 95 percent of California businesses, employing 44 percent of the workers in the state, would be eligible by 2015 to purchase coverage through an exchange.
• One out of five businesses would be eligible for tax credits toward buying such coverage.

Families with annual incomes under 400 percent of the Federal Poverty Level ($43,320 for one person or $73,240 for a family of three) who are not eligible for Medicaid could receive subsidies for coverage in the newly created health insurance exchange, researchers found.

In a second, related study just issued by the center, “How Would Health Care Reforms Change the Spending of California Families Without an Employer Plan?” Jacobs and fellow researchers Laurel Tan, Roland McDevitt, Jon Gabel and Ryan Lore compared the savings for the 2 million Californians who would be eligible for subsidies in the proposed health insurance exchange.

In conducting that study they found:

• Californians with an income of $16,245 a year (150 percent of the federal poverty level) would save $5,000 on average on premiums and out-of-pocket costs under the U.S. House of Representatives bill compared to what they would spend in the current individual market, and that they would save slightly more than $4,000 under the U.S. Senate bill.
• Those with an income of $43,320 a year would save $838 a year under both plans compared to what they would spend in the current individual market.
• California families of three with typical health care use who earn less than $59,000 would spend significantly less under the House bill than under the Senate bill, while those earning between $59,000 and $73,240 would spend less under the Senate bill.
• Families with high health care use and earning less than $46,000 a year would spend up to $3,000 less on annual member premiums and out-of-pocket costs under the House bill than under the Senate bill, but some of those earning between $46,000 and $73,240 would spend less under the Senate bill.

“The benefits to Californians would go well beyond those who would receive subsidies for coverage, many more would directly benefit from health insurance market reforms and the new health insurance exchanges,” said Jacobs.

“While most Californians would continue to have employer-based coverage, affordable coverage would be available in the event they lost their job or became too ill to work,” he added.

An estimated 48 percent of Americans under the age of 65 will be without health care coverage for some time over the course of a decade, 41 percent of them for six months or more, according to a U.S. Treasury Department study. Both reform bills under review in Washington, D.C., would allow unemployed individuals and their families to buy coverage in the exchange and get subsidies based on their income at the time of enrollment.