Economic Impact Analysis

EXECUTIVE SUMMARY

Executive SummaryRegulations often restrict the range of market choices available to consumers, yet they are promulgated without a quantitative analysis of that cost—a fundamental flaw in regulatory impact analysis. This paper fills the gap by supplying a portable choice-value factor. The factor compares value at the unconstrained mix with regulation-constrained value.

Health care provider taxes and state-directed payment policies in the Working Families and Tax Cut legislation are expected to reduce non-Medicaid prices by up to 3.5 percent in markets with provider taxes and reduce spending on Medicaid, commercial and Medicare coverage.

The U.S. Department of Health and Human Services (HHS) analyzes the benefits, costs, and other impacts of significant proposed and final rulemakings, consistent with the requirements of several executive orders and statutes. HHS develops these analyses according to technical guidance published by the U.S.

The U.S. has a number of policies related to drug pricing, affordability, and availability. To encourage manufacturers to innovate with new therapies, patent policy rewards the creation of new branded medicines. As those patents come to an end, generic drug manufacturers may enter a market and seek to sell their products at lower prices than the competing brand drugs.

This guidance, originally published in 2003, contains the following introduction:

This Issue Brief examines the impact of Medicaid throughout its six decades and highlights the importance of Medicaid coverage for low-income children and adults. The brief reviews studies showing that access to Medicaid coverage is associated with a significant improvement in health and mortality.

The cornerstone of a well-functioning market is competition. President Biden’s Executive Order 14036, “Promoting Competition in the American Economy” identified a lack of competition as a key driver for problems across economic sectors.

Expanding access to high-quality, affordable health care has been a priority of the Biden-Harris Administration.