Press Release

Embargoed Until Contact

July 22, 2010
12:01 AM EST

Kay Campbell
(301) 652-1558


Sue Ducat
Director of Communications
(301) 841-9962


From Health Affairs


Who stands to gain from health reform?


Bethesda, MD - As the United States begins implementing health reform, many aspects of the new law will be experienced differently depending on an individual’s current health insurance status. Joseph P. Newhouse, an internationally renowned economist, assessed health reform from the perspective of four different groups. He warns that although the new law will probably reduce the number of uninsured Americans, it is unlikely that the steady rate of growth of health care costs will be successfully curtailed unless further efforts are made to streamline payment rates.


Assessing Health Reform’s Impact On Four Key Groups Of Americans
By Joseph P. Newhouse


Newhouse is a professor of health policy and management at Harvard University in Boston. This paper is adapted from his May 2010 Eisenberg Legacy Lecture, a program funded by the California HealthCare Foundation.


The four groups Newhouse identified were: (1) those who are uninsured or eligible for Medicaid or the Children’s Health Insurance Program (CHIP); (2) purchasers of individual health policies and those insured through a small business employer; (3) employees of midsize or large employers offering benefits; and (4) Medicare enrollees. Newhouse predicts that although we can expect significant issues to arise concerning financing and administration, and perhaps the capacity of the delivery system, individuals in the first group will benefit greatly from the new guidelines. So will the second group, which he estimates could grow to become one-sixth or more of the population. Those belonging to the third group, says Newhouse, are generally unaffected by health reform at the moment. Medicare enrollees will gain from the new benefits (especially concerning long-term care and the closing of the doughnut hole). But they also may find their access to care diminished, as reduced reimbursement to providers could cause some physicians to turn away Medicare patients who lack supplemental insurance or other means of making additional payments.


Ultimately, Newhouse observes, there is no panacea—and the continually increasing costs of health care and Medicare, coupled with the lack of political will to increase taxes, will mean that the nation remains in a fiscal hole. “Despite all of the substantive and political problems of price setting, some sort of all-payer regulatory regime may be the only feasible alternative,” Newhouse concludes. “Health reform will accomplish many good things for a great many people. But it is doubtful that the steps included in the Affordable Care Act to reduce the steady rate of growth of health care costs will suffice.”

About Health Affairs

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.