Program Goals

As part of The Commonwealth Fund’s efforts to inform health reform policy, the Program on Affordable Health Insurance envisions an equitable and efficient system of health coverage that makes comprehensive, continuous, and affordable coverage available to all Americans. The program support activities to:

• provide timely analysis of changes in employer-based health insurance, health plans offered in the individual market, and public health coverage for people under age 65, and estimate the impact those changes will have on the numbers covered and the quality of coverage;
• document how being uninsured, or underinsured, affects personal health, finances and job productivity;
• inform federal and state policymakers and the media about the provisions of the health reform law—the Patient Protection and Affordable Care Act—and related federal regulations, along with their implications for people and employers;
• inform implementation of the new law through analysis of its key provisions for achieving affordable, comprehensive, and near-universal insurance coverage; and
• analyze and develop new policy options for expanding and stabilizing health insurance coverage, making coverage more affordable, and optimizing administrative efficiency.

The Affordable Health Insurance program is led by Vice President Sara R. Collins, Ph.D.

The Issues

The most recent census data reveal that 49.9 million people lacked health insurance in 2010, an increase of 13 million over the last decade. Moreover, new Commonwealth Fund research published in Health Affairs shows that in 2010, an additional 29 million nonelderly adults with health coverage had such high out-of-pocket costs relative to their income that they could be considered “underinsured”; this represents an increase of 13 million people since 2003. Both trends have had serious consequences for U.S. families. An estimated 73 million adults under age 65, both with and without health care coverage, reported problems paying their medical bills in 2010, and 75 million reported a time when they did not get needed care because of the cost.

Fortunately, help is on the way. The Affordable Care Act will significantly expand health insurance in the United States. To achieve near-universal coverage beginning in 2014, the law expands Medicaid eligibility and provides premium and cost-sharing subsidies that will make it easier for small businesses and individuals to afford private plans purchased through the new insurance exchanges. In addition, new regulations will limit underwriting by insurers, prohibit exclusions from coverage based on preexisting health conditions and establish a new standard for comprehensive health benefits—helping to protect against underinsurance. To ensure the law is implemented effectively, policymakers will need information about the likely impact of the reforms on the affordability and quality of coverage, as well as aspects of the law that might require modification.

Recent Projects

Disseminating Information About Health Insurance Reform
The Commonwealth Fund’s Program on Affordable Health Insurance has been closely monitoring implementation of the Affordable Care Act and emerging federal regulations, assessing their impact on coverage, affordability, and access to care, and informing policymakers of its findings.

Once President Obama signed the act into law, the Fund launched an online interactive timeline to guide policymakers, the press, and the public through the law's provisions and dates of implementation—one of many tools available in the Health Reform Resource Center on commonwealthfund.org. In posts to The Commonwealth Fund Blog, Fund staff and grantees are also providing analysis of the federal regulations as they are issued, including rules governing health insurance exchanges, risk adjustment for health plans, preventive services for women, student health plans, and plan medical loss ratio requirements.

The new Commonwealth Fund publication series, Realizing Health Reform's Potential, explains how the Affordable Care Act may benefit different populations and groups, as well as improve insurance coverage and overall health system performance. Among the topics covered in the series are young adults, small businesses, women, and baby boomers ages 50 to 64. Additional briefs in the series assessed the relative affordability of health insurance under reform, reviewed the law's essential benefit package and what it means for people with disabilities, and reported on enrollment in the new preexisting condition insurance plans.

As a complement to these briefs, Commonwealth Fund webinars on health reform provide a forum for state officials and other stakeholders to hash out implementation issues. Discussing the new state-based health insurance exchanges, for example, were Timothy Jost, J.D., of the Washington and Lee University School of Law, Illinois Department of Insurance director Michael McRaith, and Sandra Shewry of the California Health and Human Services Agency. A webinar on the federal Pre-Existing Condition Insurance Plan (PCIP) program featured Jean Hall of the University of Kansas, PCIP program director Richard Popper, and Amie Goldman and Deborah Armstrong, who direct the PCIPs in Wisconsin and New Mexico, respectively. 

Analyzing Key Reform Implementation Issues 

Health Insurance Exchanges
The centerpiece of the Affordable Care Act’s private health insurance reforms, new state-based insurance exchanges are expected to provide coverage to up to 30 million individuals and small-business employees by 2020. In the September 2010 Commonwealth Fund report Health Insurance Exchanges and the Affordable Care Act: Eight Difficult Issues, Washington and Lee University School of Law professor Timothy Stoltzfus Jost, J.D., took on the thorny questions that federal and state policymakers will need to resolve to ensure the exchanges will be up and running in time.

One of the risks to the exchanges is that they will disproportionately enroll people in poorer health, a situation that could lead to higher premiums for everyone purchasing plans through the exchanges. To guard against this outcome, the Affordable Care Act requires federal and state officials to construct a risk adjustment mechanism that protects health insurers that attract a disproportionate share of patients with high health care needs. In a Commonwealth Fund issue brief synthesizing the views of leading experts in risk adjustment, Wake Forest University's Mark Hall, J.D., explored the challenges regulators will face and compared the merits of different strategies. Among the recommendations offered in the brief: use diagnostic risk measures in addition to demographic ones, and phase in the issuance of risk transfer payments, to give insurers more time to predict and understand the full effects of risk adjustment.

In examining California's new health insurance exchange, the nation's first, the New America Foundation's Leif Haase and Micah Weinberg, Ph.D., found that state policymakers took advantage of flexibility in the reform law to ensure that the exchange will act as an active purchaser in the marketplace, as well as to combat adverse selection and allow Medicaid plans to be sold. Their study, supported by The Commonwealth Fund, was published in a May 2011 issue brief.

On The Commonwealth Blog, the Fund's Sara Collins and Tracy Garber are tracking states' progress in establishing exchanges.

Affordability and Cost Protection of Coverage Under Reform
Sharp growth in U.S. health care costs, rising premiums and deductibles in both employer and individual market insurance plans and stagnant household incomes have increased the number of people struggling with high health insurance and health care costs. In a March 2011 analysis of survey data, Fund staff reported that in 2010, nearly one-third of adults ages 19 to 64 spent 10 percent or more of their income on out-of-pocket costs and premiums, up from 21 percent in 2001. Since 2005, the share of people who reported having deductibles of $1,000 or more has nearly doubled, rising from 10 percent to 18 percent.

Meanwhile, the number of U.S. adults who had health insurance all year but were still "underinsured"—with very high medical expenses relative to their incomes—rose by 80 percent between 2003 and 2010, from 16 million to 29 million, according to a Commonwealth Fund study published in Health Affairs (Sept. 2011). The Fund's Cathy Schoen and colleagues have found that people who are underinsured are nearly as likely as those who are uninsured to skip needed health care and prescriptions and have problems paying medical bills.

Through a major expansion of health insurance coverage providing essential health benefits as well as premium and cost-sharing subsides, the Affordable Care Act should help diminish the medical cost burden faced by U.S. families. In a May 2011 Commonwealth Fund issue brief, Jonathan Gruber, Ph.D., professor of economics at the Massachusetts Institute of Technology, found that under the new law, fewer than 10 percent of families would not have room in their budgets for premiums and typical out-of-pocket costs. The individuals most likely to lack sufficient resources for health care costs, Gruber found, would be the sickest—those with the highest medical expenses.

As reform moves forward, it will be critical for state and federal policymakers to understand the medical cost burdens U.S. families are facing. Such information will be needed to help ensure that people can afford timely health care and are protected from catastrophic health care costs.

Tracking the Uninsured and Underinsured
The 2010 Commonwealth Fund Biennial Health Insurance, a nationally representative phone survey of 4,000 adults, enabled Fund researchers in the past year to examine the effects of the recent severe economic recession on insurance coverage, as well as to assess changes in coverage, access to care, and medical bill problems over a decade.

According to the Fund report Help on the Horizon, which drew from the survey findings, an estimated 9 million working-age adults in the last two years became uninsured after losing a job with health benefits. Most people who lost their jobs were unable to afford COBRA continuation coverage. And people who ventured into the individual market faced higher premiums or preexisting-condition exclusions; in fact, of all survey respondents who tried to buy health plans in the individual market during the last three years, 60 percent said it was very difficult or impossible to find affordable coverage. Help on the Horizon also described the significant increase in the prevalence of cost-related difficulties getting needed care and problems paying medical bills.

Commonwealth Fund researchers also used the Biennial Survey to explore the coverage and care experiences of working-age women, who have greater health care needs than men. Together with colleagues, Ruth Robertson, a senior research associate, found that over the last decade coverage became less affordable and health care more costly for women under 65. Less than half of women in the survey were up to date on recommended preventive care services like mammograms and colon cancer screenings. Those lacking health insurance or in households with low incomes were the least likely to get the care they needed.

Another issue brief, published in May 2011, examined the crisis in health insurance coverage among young adults ages 19 to 29—the age group with the largest number of uninsured. Fund authors Collins and Garber reported the number of uninsured young adults climbed to nearly 15 million in 2009, up from 13.7 million the year before, in a continuation of a decade-long trend that also saw 45 percent forgo needed care in 2010 because of the cost.

Beyond reporting grim data, each of these reports also shows how the health reform law will make a difference for each of these groups, whether by enabling young men and women to remain under their parents’ coverage until age 26, enroll in Medicaid if their income low, and buy subsidized private coverage through the insurance exchanges. Recent federal data shows, in fact, that the law may already be having an impact: for example, the Centers for Disease Control and Prevention recently estimated that in the first quarter of 2011 there were 900,000 fewer uninsured adults ages 19 to 25 than in 2010.

Closing Gaps in Insurance Coverage
Over the last several years, the Program on Affordable Health Insurance has examined gaps in Americans' coverage and the phenomenon of "churning" in plan enrollment, which occurs when people lose their source of coverage, as may happen through job loss, and transition to another source. A recent Commonwealth Fund–sponsored analysis led by Pamela Farley Short of Pennsylvania State University found that the Affordable Care Act will help limit the coverage gaps experienced by many people when their life circumstances change. To reduce gaps further, Short and her colleagues say policymakers will need to find ways to overcome four key challenges: 1) adjusting premium and cost-sharing subsidies when incomes change; 2) coordinating eligibility for insurance premium credits and public coverage; 3) facilitating continuous coverage; and 4) minimizing transitions between the individual and small-business insurance exchanges.

Redesigning Employer Benefits to Encourage Use of High-Value Treatments
Value-based insurance design (VBID) is a strategy that increasing numbers of employers and insurers are adopting to improve health care quality while controlling health spending. The basic idea is to promote use of services or treatments that provide high benefits relative to their cost and, alternatively, to discourage the use of services whose benefits do not justify their cost. To test whether VBID actually works, Commonwealth Fund grantee Niteesh Choudhry and colleagues at Brigham and Women’s Hospital in Boston examined a program at Pitney Bowes that eliminated copayments for cholesterol-lowering statins and reduced them for clopidogrel, a blood clot inhibitor. Their findings suggest that by reducing or eliminating copayments, patient adherence to prescribed medications can indeed improve. While the gains in adherence were relatively modest, the researchers believe these could be augmented through additional policies that address "suboptimal" use of health care services.  

Future Directions

The Program on Affordable Health Insurance will continue to monitor the impact of the Affordable Care Act on the nation’s uninsured and underinsured and inform policymakers and federal officials about ways to ensure the reforms achieve their goals.

• Timothy Jost, in collaboration with Mark Hall and Harvard University's Katherine Swartz, Ph.D., will monitor the creation of state insurance exchanges where individuals will be able to shop for their health coverage. Their Commonwealth Fund–supported work will provide recommendations to state and federal officials, legislators, and regulators for ensuring that these crucial components of health reform function as intended. Sara Rosenbaum, J.D., of George Washington University, meanwhile, will examine the structure and features of the different exchanges; her findings will be used to create an interactive tool on commonwealthfund.org to enable side-by-side comparisons.
• The Affordable Health Insurance program will also continue to track trends in the affordability of health coverage. With Fund support, the National Opinion Research Center’s Jon Gabel will compare the affordability of health plans offered through the exchanges, and the cost protection these plans provide, with that of plans offered by employers and sold through the individual market. Using the federal Medical Expenditure Panel Survey, Peter Cunningham, Ph.D., of the Center for Health System Change is monitorin changes in the medical cost burden faced by Americans, including insurance premiums and out-of-pocket expenses; in particular, he will be looking at the health care impact on people with diabetes and asthma.
• Year-to-year changes in personal income will affect eligibility for the Affordable Care Act's insurance premium tax credits, which will be offered on a sliding, income-based scale. A decrease in income could result in a higher tax credit, while an increase in income means that someone might have to return all or part of the tax credit. Jonathan Gruber, Ph.D., of the Massachusetts Institute of Technology will use a microsimulation model to project the potential frequency of such adjustments and examine how policy changes might reduce costs for individuals and the government.
• To inform state and federal policymakers about the importance of continuity in insurance enrollment, researches led by Pamela Farley Short, Ph.D., of Pennsylvania State University will estimate gaps in people’s health coverage and the extent of churning in health plan enrollment over the period 2004 to 2007. The analysis will yield baseline data for evaluating the capacity of health reform to address the problem.
• At the University of Kansas Center for Research, Jean Hall, Ph.D., will continue to track state by state enrollment and patient experiences in the high-risk insurance pools created by the new law and offer recommendations to officials charged with their implementation.
• Finally, a new series of online longitudinal surveys will track the effects of the Affordable Care Act over the next three years as it is implemented and establish baseline measures prior to 2014, when the major provisions of the law go into effect. Throughout this transformational period in U.S. health care, the new surveys will provide a flexible, policy-relevant survey tool to supplement the Fund’s longstanding national Biennial Health Insurance Survey.

To apply for a grant from The Commonwealth Fund's Affordable Health Insurance program, visit the Applicant and Grantee Resources page.