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Study: Expanding Medicaid Beats Employer Mandate

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Paying for more government health insurance might be a lot cheaper than requiring employers and individuals to buy health coverage.

A team of researchers lead by Ellean Meara, a health care policy economist at Harvard University, has come to that conclusion in an analysis released by the Employment Policies Institute, Washington.

Berman & Company Inc., Washington, a lobbying firm, organized the institute to look at issues such as minimum wage increase proposals and other wage and benefits proposals from the perspective of employers and others worried about the effects of mandates on employability of low-wage workers.

Meara’s team compared the Bush administration’s new health insurance tax cut proposal, a proposal to require large and midsize employers to provide health coverage, and a proposal to expand Medicaid to cover U.S. residents earning up to 300% of the federal poverty level.

If the government required all private employers with 25 or more employees to provide coverage for full-time workers, the number of U.S. residents with health coverage could be increased by about 13 million, but the cost would be about $7,700 per year per newly insured person, the researchers estimate.

Bush’s proposal to replace the current group health tax deduction with a tax credit for any insured person would increase the number of people with health coverage by only 1.6 million, at a cost of about $16,000 per year per newly insured person.

Simply expanding Medicaid might increase the number of insured people by about 5 million, and the cost could be as low as $3,300 in government expenditures per year per newly insured person. Because some of the insureds would move from private group health plans and individual plans to Medicaid plans, the Medicaid expansion proposal would reduce private expenditures by about $1,700 per newly insured person per year, the researchers estimate.

A copy of the analysis is on the Web at Document Link


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