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Posted: February 24, 2011

Study projects health care reform benefits

Results show it will slow costs, boost Colorado's economy

The Colorado Trust

A new issue brief from The Colorado Trust sheds light on what the budgetary impacts of federal health care reform may be on Colorado families, businesses and the state. The Economic Impact of Health Reform in Colorado highlights findings from an in-depth study that assessed the effects of health care reform on the Colorado economy.

Because the study began prior to the passage of federal health care reform, it was based on the recommendations of Colorado's 208 Commission. Conducted by the New America Foundation, a nonpartisan research organization, and validated by The University of Denver's Center for Colorado's Economic Future, the study was commissioned and supported by The Colorado Trust and the Colorado Health Foundation. This new issue brief summarizes the study and updates selected findings to reflect the specifics of the Affordable Care Act (ACA).

"The findings of this study are promising in light of Colorado's ongoing implementation of the federal reform law. Without any reform, health insurance premiums are predicted to continue to increase at twice the rate of the average Coloradan's wages, ultimately taking up 40 percent of the average family's income in the next few years, a seemingly overwhelming burden," said Dr. Ned Calonge, President and CEO of The Colorado Trust. "This study shows that federal health care reform will help to slow health care cost increases and spur economic activity, better enabling Coloradans to get the care they need to stay healthy."

The study sheds light on what the actual budgetary impacts of federal health care reform may be on Colorado families, businesses and on the state, including:

• Slowing Growth in Costs. It projected that health care cost growth will be between 5.5 percent and 17 percent lower in Colorado by 2019 than it would have been without reform.
• Lower Premiums. This translates into premiums for employer-sponsored insurance in 2019 that are between 10 percent and 25 percent lower due to lower overall cost growth. It also means that families and businesses in Colorado could expect premiums for employer-sponsored insurance to be $1,962 less per year for individual coverage and $3,917 less per year for family coverage in 2019 than they would have been without federal health care reform.
• Economic Benefit. As well, the study projects that increasing health insurance coverage in Colorado will spur increased economic activity and create more jobs, even after accounting for the costs of financing reform. In 2019, state economic output should be nearly 1 percent higher than it would be without health care reform and there will be roughly 19,000 new jobs as a result of the coverage expansion.

The study's research points to several key reasons for these savings, including efforts to:

• Expand coverage and lower uncompensated care costs. It is estimated that uncompensated care would have cost Coloradans $1.8 billion dollars in 2019 without federal health care reform. The ACA calls for expanded coverage, equalization of Medicaid reimbursement levels and for private payers to hold down their cost increases.
• Make the medical system more efficient. The ACA encourages health system reforms such as paying health care providers for value rather than for volume and the expansion of programs like medical homes, accountable care organizations and health information technology.
• Increase economic activity and new jobs. As more Coloradans obtain health insurance and seek medical care, there will be an increased demand for health care workers. In turn, this increased demand will lead to more health care-related job opportunities in Colorado, resulting in more individuals with disposable income to buy other consumer goods from Colorado businesses.
• Improve productivity with improved health. The economic losses from the uninsured are between $1.82 billion and $3.87 billion in Colorado per year. At least some of this value could be recouped through healthier, more productive workers who would earn more income and thereby increase the state's tax base.

Related CoBiz columns:

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Health care reform: planning for the future, Part 2

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 Health care reform: a win-win for small business

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The Colorado Trust is a grantmaking foundation dedicated to achieving access to health for all Coloradans.


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Readers Respond

Well so far this thread has produced one person using harsh language. The fact of this law is that it does an excellent job of providing access to health insurance to those previously unable to obtain it due to a pre-existing condition. The fact of this law is that it does very little in real ways to bring down the cost of health care. The cost of health care is the main driver for the high cost of insurance premiums. Therefore when those who have pre-existing conditions are able to purchase health insurance in 2014 the question remains will they be able to afford it? And all this is assuming they don't die of thier condtion before 2014 and why do they have to wait another 3 years? Why not have this law that cares so much for them allow them access to insurance coverage today? Because the financing of this awful legislation would not have worked if they had to provide benefits within their 10 year time frame. The structure they have implemented allows the law to collect taxes for 10 years and pay benefit for 6. Great deal if you can get it I'd say. By James Marsh on 2011 02 25
OF COURSE the new health care act will create jobs, and good ones, too. As more people move into the health care system, there will be a need for new medical personnel. One of the things that the haters of this act don't seem to get is that we're ALREADY paying for health care for the uninsured at the highest possible rates. We're paying for very sick people who are uninsured going into the ER and having to have heroic care, rather than catching potentially expensive diseases up front and practicing preventive medicine. The Affordable Care Act is heavy on prevention and good, solid medicine. It has many problems with it, but it isn't the end of the world that the partisans against this act make it out to be....and the individual provisions are very popular. The mandate is what makes it affordable. By John Heckers, MA, CPC, BCPC on 2011 02 25
All studies trying to look into the future are based on assumptions and extrapolating data to make a "best guess" estimate. What data is used and assumptions that are made can make or break the forecast. The report summary states "The effectiveness of any or all of these initiatives and programs remains to be seen;....". The only way we could better know is to have the current system and Obamacare each isolated and compare the results down the road. The concept of this law creating more health care related jobs appears to be based on the same concept as the perpetual motion machine. This is not self funding and takes outside dollars to support these jobs. Yes. More people are covered, but they are for the most part being covered by the use of subsidies and taxing others. This is cost shifting, not cost savings. Increasing who and what must be covered through mandates increases costs. Period! While I do not like the current state of health insurance, I'm more concerned about creating another government entitlement program. By John Gimple on 2011 02 25
What IS it about ANYONE saying ANYTHING positive about the Affordable Care Act of 2010 that brings out the extremists in the right wing? Calling people names, predicting the end of the world, and so on is just absurd. One may like or dislike this act, but it IS the law of the land, and will likely be implemented, at least mostly. Health care reform is long past due. The Affordable Care Act is far from perfect. So, rather than the political posturing, take the law and fix it. Few laws start out perfect because they are passed by imperfect people. But, above all, disagree with the law if you wish. But do so in a civil manner that does not demonize those who passed it or support it (as I do...for the most part), and refrains from name-calling and rabid posturing. A rational, civil discussion is what is necessary (and should occur on these pages), not nursery school temper tantrums. By John Heckers, MA, CPC, BCPC on 2011 02 24
Here is another attempt to "spin" this awful law. This study repeats the false savings coming from the reduction of "uncompensated care...expansion of those covered..etc.." The cost of health care must be reduced to bring down the cost of insurance premiums. PPACA promises to lower cost by reducing Medicare fees paid to Physicians. The reality of this "reduction" actually happening is very low. Therefore those "savings" most likely will never occur. Yes, by all means let’s help cover the under & uninsured. No, let’s remove the Government fix, they have never proven to be very efficient. I’d like to see more honesty and less spin when discussing this issue. By James Marsh on 2011 02 24
I don't buy this one bit. We add thousands of people to coverage that small businesses have to pay for and it's costs less??? NOT. The numbers just don't add up. Shifting the cost of hc to small businesses leaves out one important factor. LOSS OF JOBS. What's the cost of that?? I have always provided hc for my employees (40 yrs) and this year the increase was 40%. I got quotes from FIVE insurance companies and they were all very similar and they ALL said that the increases were because of the increased mandates required by obamacare. I have ALREADY had to let one employee go because of it. All the "studies" in the world can't change that and I DO trust that the insurance companies understand "costs" more than government does. It's always been that way By John Wray on 2011 02 24
Does The Colorado Trust use Federal or State tax revenue in any of their grants? By Rick on 2011 02 24

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