National health insurance: A simulation model

This study develops a microsimulation model to estimate the benefits and costs associated with generalizing the scope of the Massachusetts Health Security Act into a national health insurance plan. The microsimulation model also facilitates the examination of the distribution of benefits and costs induced by the plan across various socioeconomic groupings. The model is comprised of three stages. Stage I specifies four behavioral equations to estimate the number of hospital visits, physician visits, surgeries, and deliveries made by individuals covered by insurance. Stage II uses these behavioral equations to estimate health care benefits conferred upon individuals not presently insured once they are covered by insurance. Stage III estimates the costs borne by these individuals once they are insured. If total net costs are subtracted from total net benefits, it is found that the primary beneficiary groups are those age 65 and over, those who earn {dollar}5,000 or less, those in poverty, those currently unemployed, those in fair or poor health, and those with activity limitations. As such, even considering only hospital, physician, surgery, and delivery benefits, it does appear that a national health insurance program patterned after the Massachusetts Health Security Act would successfully extend medical care to many groups not presently receiving it. While a plan patterned after the Massachusetts Health Security Act would address the needs of many individuals who presently lack insurance, it may be more efficient to address the needs of these specific groups directly. However, a plan patterned on the Massachusetts Health Security Act may reflect the worst of both worlds to the extent that it lacks the efficiency of a free market system, while at the same time it also lacks the equity of a government operated system, but the political and social climate may dictate that such a plan be the only course acceptable to all parties. Although the Massachusetts Health Security Act reflects a policy that has been adopted in only one jurisdiction, it may be a precursor of what may lie ahead for the nation as a whole.