The American Enterprise Institute published a health reform white paper, titled “Best of Both Worlds”. The white paper, referred to in this report as the Proposal, offers alternative policy suggestions to those that were implemented under the Affordable Care Act (ACA).  Key aspects of the proposal include a “Basic Plan” available to all individuals at no cost, eliminating the tax exemption for employer sponsored insurance premiums, eliminating most of the Medicaid program, and instituting a safety net for the uninsured, among others. This report details the findings of the Center for Health and Economy’s (H&E) Under-65 Microsimulation Model on the Proposal’s impact on health insurance premium prices, insurance coverage, provider access, medical productivity, and the federal budget. While our estimates are associated with some degree of uncertainty, the summary of our findings is as follows:
- Premium Impact: The Proposal is projected to decrease the total premium cost of private health insurance coverage, with the largest impact on Bronze and catastrophic coverage plans.
- Coverage Impact: The Proposal is projected to lead to 19 million more insured persons by 2025 relative to current law. The increase in coverage is the net effect of a growing individual market and shrinking enrollment through employer-sponsored insurance and Medicaid.
- Provider Access: The Proposal is projected to initially result in greater patient access to providers. According to the H&E Provider Access Index, access for the insured population will be 4 percent greater than under current law in 2016. By 2025, average provider access under the Proposal will be roughly equal to current law.
- Medical Productivity: The Proposal is expected to lead to greater productivity than under current law. According to the H&E Medical Productivity Index, productivity is projected to increase by 8 percent by 2025.
- Budget Impact: Compared to current law, the insurance coverage provisions of the Proposal will increase the federal deficit by $940 billion between 2016 and 2025.