Saving Lives and Reducing Health Care Costs: How Clean Air Rules Benefit the Nation

A new analysis by Environmental Defense Fund (EDF) and Trust for America’s Health (TFAH) finds that four major rules of the Clean Air Act will yield more than $82 billion in Medicare, Medicaid and other health care savings for America through 2021.

The report, Saving Lives and Reducing Health Care Costs: How Clean Air Rules Benefit the Nation, examines how four new rules recently proposed or finalized by the Environmental Protection Agency (EPA) are expected to reduce air pollution and rates of pollution-related diseases, leading to major savings in health care costs.

“This report offers more proof that clean air rules that protect people’s health are a good investment for America,” said EDF policy specialist Kusai Merchant. “The Clean Air Act is designed to save lives and promote public health by reducing dangerous air pollution. Our analysis shows that we can save billions of dollars at the same time, because we’ll be reducing air pollution-related health care costs.”

Out of the $82 billion, $44.6 billion of the savings are in Medicare and federal-level health care spending, $2.8 billion in state-level Medicaid and other state and local spending, $8.3 billion in out-of-pocket individual costs, and $24.7 billion in private insurance spending.

The four rules – the Cross-State Air Pollution Rule, the Utility Mercury and Air Toxics Rule, the Industrial Boiler Rule, and the Cement Kiln Rule – are expected to lower emissions rates of a number of air pollutants, including mercury, arsenic, dioxins, volatile organic compounds, acid gases, heavy metals, smog, and soot, which in turn reduce rates of premature mortality, chronic bronchitis, non-fatal heart attacks, cardiovascular hospital admissions, respiratory hospital admissions and emergency room visits related to asthma.

“By lowering air pollution, we can spare millions of Americans from asthma attacks and other respiratory problems, heart attacks and other cardiovascular problems, and a host of other preventable conditions,” said Jeff Levi, PhD, Executive Director of TFAH.  “These Clean Air Act rules are a triple win for the environment, health and health care savings.”

The findings are based on a model developed by David Gardiner and Associates on behalf of EDF and TFAH. The model includes a review of Environmental Protection Agency (EPA) analyses of peer-reviewed scientific, medical and economic studies that quantify how Clean Air Act rules are expected to lower air pollution and associated disease rates. The model calculated the expected savings related to lower air pollution and disease rates using the average direct health care Cost-of-Illness for the diseases.

The report also includes a second analysis of health care savings expected from the 1990 Clean Air Act Amendments, which finds implementation of these programs could yield over $612 billion between 2000 and 2020 in reduced Medicare, Medicaid, out-of-pocket and private insurance spending.