How Will Reform Affect Health Care Costs?

By almost any measure, America has the world’s costliest health care system—and it is getting more expensive by the year. Many argue that exploding health care costs present a serious threat not only to our overall economy and federal budget, but also to state budgets, and that health reform needs to focus primarily on controlling these costs.

A series of brief reports funded by the Robert Wood Johnson Foundation explores the effects that the Patient Protection and Affordable Care Act (PPACA) will likely have on consumers, state governments, the economy and health care costs. In the reports released today, Urban Institute researchers examine how cost controls in the legislation, new rules for allowing purchase of health insurance across state lines, and malpractice reform could affect the amount of money Americans spend on health care and insurance.

The papers make the following conclusions:

  • Author Stephen Zuckerman said PPACA’s modest cost-containment provisions could nevertheless help slow rising costs while simultaneously sparking improvements in quality.
  • Author Linda Blumberg said interstate insurance sales will be permitted only under agreements by participating states, providing greater consumer protections than past proposals.
  • Author Randall R. Bovbjerg said malpractice reform could significantly cut health care costs, but PPACA does not take major actions to address this issue.