The Potential Impact of President Obama's Health Reform Proposal

An independent evaluation of the health reform proposal made this week by President Obama shows that the plan would reduce the number of uninsured Americans by 30 million by 2019—very similar to the results expected under separate legislation passed by the House and Senate.

The analysis by RAND Corporation researchers finds that under the president's plan the number of people with employer-sponsored insurance would be the same as estimates for the Senate plan and lower than estimates for the House plan.

In addition, the analysis finds that the total number of people receiving Medicaid would be the same as under the Senate plan and slightly higher than under the House plan. The number of people obtaining insurance through newly established insurance exchanges is higher than both the House and Senate plans.

The findings were generated using a micro-simulation model created as a part of RAND COMPARE, an ongoing, independent effort to provide decisionmakers and the public with objective information about health care reform.

The analysis, released today at www.randcompare.org, includes a summary of the key features of the president's plan that were modeled and tables comparing the president's plan with the status quo and the bills passed by the House and the Senate.

"Although the president's plan is most similar to the bill passed in December by the U.S. Senate, our analysis found that there would be a few differences in where the newly insured obtained coverage and in the costs to the government," said Elizabeth A. McGlynn, associate director of RAND Health and co-leader of the COMPARE project.

The RAND study found that the president's plan would result in about 1 million more people obtaining insurance through the nongroup or newly created exchange market than in the Senate bill.

Total spending on Medicaid under the president's plan would be lower than the level that the RAND COMPARE model predicted for either the Senate plan or the House plan. Subsidy costs would be higher under the president's plan than the Senate bill because of small differences in the subsidy and penalty structures of the two plans.

RAND developed COMPARE to provide objective facts and analysis to inform the dialogue about health policy options. COMPARE is funded by a consortium of individuals, corporations, corporate foundations, philanthropic foundations and health system stakeholders.

RAND Health, a division of the RAND Corporation, is the nation's largest independent health policy research program, with a broad research portfolio that focuses on quality, costs and health services delivery, among other topics.