*This is an archive page. The links are no longer being updated.
1994.02.02 : State Savings from Health Care Reform

FOR IMMEDIATE RELEASE                   Contact:  HHS Press Office
Wednesday, Feb. 2, 1994                           (202) 690-6343

   STATES BENEFIT UNDER HEALTH SECURITY ACT, HHS REPORT FINDS

     States would benefit dramatically under President Clinton's
proposed Health Security Act, with total savings of at least $53.6
billion from 1996-2000, including $47.3 billion in savings under
Medicaid, according to a new study released today by the Department
of Health and Human Services.

     According to the study, states as a whole will save $40.3
billion as a result of enrolling current Medicaid beneficiaries in
private health plans through regional alliances.  Another $11.1
billion will be saved as a result of the creation of a new home and
community-based long term care program that is included in the
President's proposal.  States will spend an additional $4.1 billion
on that new program, leaving them with a net Medicaid savings of
$47.3 billion in the 1996-2000 period.  In the year 2000 alone,
states will gain $22.3 billion in Medicaid savings.

     As employers, states will save another $5.6 billion in health
insurance premium costs for active employees in the year 2000. 
States will save an estimated $704 million in that year as a result
of federal support for health care for early retirees. 

     "The Health Security Act will reduce the cost of insurance in
states through universal coverage, cost containment and the
elimination of cost shifting," the report says. 

     The Health Security Act guarantees all American citizens and
legal residents private health coverage for a comprehensive package
of benefits.  It enhances the private market to bring true cost
containment to the health care system.

     The study, prepared by HHS Deputy Assistant Secretary for
Planning and Evaluation Kenneth E. Thorpe, also estimates that
employers who currently offer health insurance to their workers 
will save an additional $59.5 billion in premium payments in the
year 2000, or an average of $605 per worker.  Workers in such firms
will save another $28.9 billion in the year 2000, or an average of
$293 per worker.

     The new report is part of a series of analyses of the
President's Health Security Act on various segments of American
society and the U.S. economy.  Future reports will study the impact
on specific states.