Impact on Providers
While slowing expenditure growth to 5.5 percent per year is a significant change from recent years, hospitals, physicians, and other providers' revenues would continue to experience growth each year. This growth would be only marginally slower than what is currently projected, as revenues continue to increase due to medical advances and an aging population (Exhibit ES-6). Payment reforms would support and provide incentives for practice innovations and more productive resource use.

Distribution of Impact Across Major Payer Groups
All major sectors would benefit from improved health and from slower growth in spending, compared with projected trends. By 2020, the cumulative reduction in the growth of national health spending compared with trends of $3 trillion would be distributed across the major groups that pay for health care: the federal, state, and local governments; private employers; and households (Exhibit ES-7).

Most of the savings would accrue to individuals and families as a result of slower growth in premiums and out-of-pocket spending, federal premium assistance, and expansion of public programs to make insurance affordable. The savings would accrue across all income groups, including higher-income households. State and local governments would also realize substantial savings relative to current projections.

Employers who currently provide insurance and their employees would also realize significant savings as a result of lower premiums and more equitable sharing of the costs of family coverage across all employers. Over time, new system savings would offset costs for employers and workers as premium growth slows, with net cumulative employer savings of $231 billion by 2020.

As the central source of financing for coverage expansions, the federal government's costs would increase during early years to make coverage affordable. The insurance design specified for modeling also provides federal funding to offset state and local costs of expanding Medicaid and raising Medicaid payment rates to Medicare levels. As a result, there would be an increase in net federal government spending during the decade. With system reform policies in place, however, the net federal cost of insurance expansion and investing in the care system declines rapidly. By 2020, payment and system reform savings would offset nearly all the increase in annual federal spending compared with baseline projections (Exhibit ES-8). Over the 2010 to 2020 period, the net federal budget outlays are estimated to be $593 billion—with most incurred in the first five years.

The Commission did not specify a plan to finance the federal expansion. As the report discusses, there are a number of ways to pay for such costs, with net gains to all as the nation invests in a healthier and more secure future. As state governments, households, and employers all save significantly, policies could recapture some of the savings or modify design features to finance federal support of insurance for all.