Troyen Brennan and Thomas Lee
First posted 8/25/11 on the Health Affairs Blog
Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.
The employer outlook can best be illustrated by taking a step back, and analyzing the dynamic between employer coverage and the other major sources of health insurance: the government and individuals. A fourth source of insurance, the exchanges, will be added in 2014.
The biggest of these four sources are the government payers, Medicare and Medicaid. Medicare, growing quickly after 2020, is the real demographic sink hole for the federal government finances. Yet this is not to say that comparatively the government is a generous payer. Most health care providers barely break even or incur deficits on Medicare, cross-subsidizing Medicare recipients with patients from other segments with better reimbursement. Similar dynamics characterize Medicaid, which will cover 25 percent of all Americans in 2014.