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Appendix B
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The Financial Impact of a Multi-Payer Universal Coverage Program for Maryland: Detailed Tables
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Table B-1
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Changes in Health Spending in Maryland under the Multi-Payer Universal Coverage
Proposal in 2001
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(Employers Have the Option to Continue to Offer Insurance)
(in millions)
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a/See
Table 2 for a detailed summary of changes in statewide
health spending. Includes changes in wages and tax
revenues.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-2
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Changes in Health Spending in Maryland under the Multi-Payer Universal Coverage
Proposal in 2001 (Employers Have the Option to Continue to Offer Insurance) (in millions) a/
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a/Includes
spending for acute care. Excludes research, construction long-term
care and public health.
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b/Assumes
that utilization of health services by previously uninsured persons
will rise to the levels reported by insured
persons with similar age, sex, income and health status characteristics.
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c/Assumes
that utilization of newly covered health services for insured persons
whose coverage is upgraded (prescription
drugs, etc.) will rise to the levels reported by persons who have such coverage.
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d/Total
insurer administrative costs are estimated to be $1,232 million in
2001. Insurer administrative costs will drop to $941
million under the single-payer model. We estimated single-payer program administrative costs based upon Medicare program
administrative costs adjusted for the unique features of the single-payer plan.
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e/Savings
in provider administrative costs result from: uniform billing procedures,
elimination of patient billing, for cost
sharing amounts, and the use of hospital capital and operating budgets. For a discussion of the methodology used see: John
F. Sheils et al., “National Health Spending Under a Single Payer System: The Canadian Approach,” Lewin-VHI, January 8,
1992.
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f/Under
a universal coverage program, hospitals and physicians will receive
payments for care formerly provided as
uncompensated care. We assume that provider payments are adjusted to eliminate provider windfalls for care already paid for
through cost shifting.
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g/Assumes
a 4.0 percent increase in utilization for persons formerly enrolled
in HMOs.
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h/Assumes
a 17.7 percent rebate on prescription drug expenses covered under
the program, which is the same percentage
drug rebate received by the Maryland Medicaid Program. Rebates for privately insured persons under the current system are
assumed to be equal to 8.3 percent.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-3
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Changes in Provider Payment Under the Multi-Payer Universal Coverage Proposal in 2001
(Employers have the option to continue to offer coverage.) (in millions)
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a/ See Table B-2 for detailed summary of changes in statewide health spending.
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Source:
Lewin Group estimates using the Maryland version of the Health Benefits
Simulation Model (HBSM).
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Table B-4
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Analysis of Program Costs and Revenues under the Maryland Multi-Payer Universal
Coverage Proposal in 2001 (Employers Have the Option to Continue to Offer Insurance)
(in millions)
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Notes for Table B-4
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Analysis of Program Costs and Revenues under the Maryland Multi-Payer Universal
Coverage Proposal in 2001
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a/Includes
provider payments for acute care health services that are covered
under the program. Provider payments
are
estimated based upon overall average provider payment levels under
current programs. Excludes patient copayments
and
spending for non-covered services.
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b/We
assume that provider payment rates are reduced to reflect reduced
uncompensated care expenses and savings
in
provider administrative costs.
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c/Reflects
the net change in state and local employee benefits expenditures as
a result of shifting from employer-
based
health coverage to the payroll tax. Assumes all state and local government
employers are enrolled in the single-
payer
program.
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d/Includes
the cost of administering benefits under the single-payer program.
Estimates based upon the cost of
administering
benefits under the Medicare program.
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e/The
program will be reimbursed for services provided to persons who are
covered under the CHAMPUS program.
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f/Federal
Medicare program funding for Maryland residents would be transferred
to the Maryland single-payer
program.
This includes federal funding for Part-A and the federal share of
funding for Part-B.
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g/The
state share of funding for the Medicaid program is transferred to
the single-payer program. Estimates exclude
the
state share of funding for disproportionate share hospital payments.
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h/The
federal share of funding for the Medicaid acute care program would
be transferred to the single-payer program.
Includes
benefits payments, administration and the federal share of disproportionate
share hospital payments.
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i/Current
state and local funding for mental health and various indigent care
program would be transferred to the
single-payer
program. Includes funding only for state health programs, which are
not also included under the state share
of
the Medicaid program.
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j/The
program imposes a payroll tax on employers of 5.9 percent and employees
of 2.9 percent.
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k/Assumes
a net increase in revenues from the Maryland alcohol tax rates to
the national average ($28.5 million ) and a
increase
in the tobacco tax to $1.25 per pack of cigarettes ($172.1 million).
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l/The
bill imposes a personal income tax equal to 4.0 percent of state income
tax done on a progressive scale.
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m/Employers
are assumed to pass-on the change in employer health care costs under
the program as a change in
wages
resulting in corresponding changes in state personal income tax revenues.
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Source:
Lewin Group estimates using the Maryland version of the Health Benefits
Simulation Model (HBSM).
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Table B-5
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Change in Federal Health Spending in Maryland under the Multi-Payer Universal
Coverage Proposal in 2001 (Employers Have the Option to Continue to Offer Insurance)
(in millions)
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a/Includes
reduction in costs for benefits to federal employees and retirees
offset by the payroll tax. Assumes
all Federal government employees living in Maryland are enrolled in the single-Payer program.
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b/Benefits
for Medicare recipients, Medicaid beneficiaries, and CHAMPUS/VA beneficiaries
will be eliminated
as those beneficiaries are enrolled in to the single-payer plan.
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c/The
federal government will transfer to the state their share of savings
to current federal programs.
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d/Tax
loss due to reduced wage levels resulting from higher employer costs.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-6
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The Impact of the Multi-Payer Universal Coverage Proposal on Private Employer
Health Spending for workers in Maryland in 2001: Before Wage Effects (Employers
Have the Option to Continue to Offer Insurance) (in millions)
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a/Includes
employers’ share of premium payments for employers that continue to
provide insurance to workers
and wrap around coverage for those employers that discontinue providing primary coverage.
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b/Employers
are required to pay a payroll tax to fund the single payer program.
Employers that continue to
provide coverage pay a payroll tax for each worker equal to 5.9 percent of wages less the employer share of the
premium payment.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-7
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Employer Health Spending in Maryland under Current Policy and under the Multi-
Payer Universal Coverage Proposal by Firm Size and Industry in 2001: Before
Wage Effects (Employers Have the Option to Continue to Offer Insurance)
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a/Includes
the employer contributions for benefits for workers, dependents and
retirees.
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b/Includes
payroll tax payments and the cost of continuing full insurance benefits
and wrap around benefits for
workers, dependents and retirees.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-8
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Impact of a Multi-Payer Universal Coverage Proposal on Private Employers in
Maryland by Firm Size and Industry in 2001: Before Wage Effects (Employers Have
the Option to Continue to Offer Insurance)
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-9
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Impact of the Multi-Payer Universal Coverage Proposal on Households in Maryland in
2001: (Employers Have the Option to Continue to Offer Insurance)
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(in millions)
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a/Assumes
that the increased cost of the premium for employers upgrading to
the minimum benefits package is
passed on in full to the workers.
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b/Family
out-of-pocket payments for acute care health services will be reduced
under the program due to: 1)
reduced patient cost-sharing requirements under the plan and 2) expanded coverage for services often excluded under
existing plans.
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c/Employers
are assumed to pass-on the cost (savings) resulting from shifting
from employer-based insurance to
the payroll tax in the form of changes in wages.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-10
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Change in Average Household Spending on Health Care in Maryland Under the Multi-
Payer Universal Coverage Proposal in 2001: After Wage Effects a/ (Employers Have the
Option to Continue to Offer Insurance)
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a/ Excludes institutionalized persons.
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b/ Includes changes in premiums, out-of-pocket expenses, taxes earmarked to fund health reform and after-tax wage
effects.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Table B-11
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Change in Average Household Per-Capita Spending on Health Care in Maryland
Under the Multi-Payer Proposal in 2001 by Family Income and Age of Householder:
After Wage Effects (Employers Have the Option to Continue to Offer Insurance)
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a/Excludes
institutionalized persons.
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b/Includes
changes in premiums, out-of-pocket expenses, taxes earmarked to fund
health reform, and after tax wage effects.
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Source:
Lewin Group estimates using the Maryland version of the Health Benefits
Simulation Model (HBSM).
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Table B-12
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Distribution of Families in Maryland by Change in Household Spending under the Multi-
Payer Proposal in 2001: After Wage Effects a/
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a/Includes
changes in premiums, out-of-pocket expenses, taxes earmarked to fund
health reform and after-tax wage effects. Excludes
institutionalized persons.
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Source: Lewin Group estimates using the Maryland version of the Health Benefits Simulation Model (HBSM).
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Figure B-1
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Change in Health Spending for Non-Aged Families in Maryland under the Multi-Payer
Universal Coverage Proposal by Current Insured Status in 2001 (Employers Have the Option
to Continue to Offer Insurance) (Families Headed by an Individual under Age 65)
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