Health Reform Will Add Coverage for 170,000 in Connecticut; State Health Spending to Drop by 10 Percent

National health care reform will help 170,000 Connecticut residents obtain health insurance and decrease health care spending by state government by about 10 percent when it is fully implemented in 2016, according to a new RAND Corporation study.

The increase in coverage will be caused by a jump in people enrolling in Medicaid and buying policies through a newly created state insurance exchange. Most of the rise in state spending is the result of increased Medicaid costs, according to researchers.

The estimates are from a study of the impact that the major coverage provisions of the Patient Protection and Affordable Care Act will have on Connecticut that was conducted by researchers from RAND Health and sponsored by The Council of State Governments, a group that helps state leaders share ideas and insights.

The project examined five states chosen because they represented good geographic distribution and include both large and small states. The other states studied are California, Illinois, Montana and Texas.

"As states move forward preparing for the many provisions of health care reform, it's important for them to have an adequate forecast of what is ahead," said Christine Eibner, co-author of the study and an economist at RAND, a nonprofit research organization.

"We believe this information will help all states to be better prepared to respond to the challenges posed by the Patient Protection and Affordable Care Act," said Chris Whatley, Washington director of The Council of State Governments.

Researchers used a microsimulation model developed by RAND to estimate how health reform policies will affect the number of state residents who obtain or change sources of health of insurance, the types of plans they enroll in, and spending in the private and public sectors.

The report The estimates are intended to help elected officials and policymakers anticipate the choices that will likely be needed by individuals, employers, insurance companies and governments as various provisions of health reform are implemented.

Key findings from the analysis of Connecticut include:

• The percentage of Connecticut residents with health insurance will increase from 89 percent to 95 percent by 2016 under the Patient Protection and Affordable Care Act. The number of uninsured non-elderly in Connecticut will be about half of what it would be in absence of the law (170,000 people uninsured compared to 340,000 people uninsured).
• By 2016, about of 10 percent of non-elderly Connecticut residents will obtain their health coverage through an insurance exchange created as a part of health reform.
• Enrollment in Medicaid will increase by 31 percent, with an additional 130,000 Connecticut residents enrolled by 2016.
• State health spending will decline by $2.7 billion from 2011 to 2020. Annual savings will be about $300 million annually beginning in 2016. Savings are driven primarily by the fact that Connecticut currently extends public coverage to low-income adults who do not qualify for Medicaid and pays all the costs of that program.
• There will be no substantial change in the proportion of Connecticut workers offered health insurance coverage through their employer by 2016.

The full study can be found at www.rand.org. Other authors of the study are David Auerbach, Sarah Nowak, Jeanne Ringel, Federico Girosi, Elizabeth A. McGlynn and Jeffrey Wasserman.

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 health care costs, quality and public health preparedness, among other topics.