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Incremental Improvements to Expand Insurance Coverage I

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Incremental Improvements to Expand Insurance Coverage I Powered By Docstoc
					 Strategic Issues and Options:
Expanding Insurance Coverage


              Karen Davis
  President, The Commonwealth Fund
2003 National Health Policy Conference
           January 22, 2002
   Problems with Current System
• Falling through the cracks – one-fourth
  uninsured at some point during year
• No real progress in reducing numbers of
  uninsured – 41 million uninsured
• Instability and churning – 20 million with a
  gap in coverage during the year
• Underinsurance – 30 million underinsured
• Double-digit health insurance premium
  increases
• Individual and small employer insurance
  markets in trouble
• Economic turndowns cause people to lose
  jobs, income, and health benefits
• Economic turndowns create fiscal pressures
  on states, put Medicaid/CHIP and other state
  health insurance programs at risk
      One in Four People Under 65 Were
           Uninsured During 2000
      62 Million with a Time Uninsured
                                                      Uninsured all year
                                                           13.3%


                                                                Uninsured part year
                                                                      12.6%




                                                                   Insured all year
                                                                        74.1%


        Total Population Under 65 = 241 Million
Source: MEPS Statistical Brief #6 - The Uninsured in America, 1996-2001. Civilian
Noninstitutionalized Population Under Age 65, Nov. 2002.
              Growth in the Number of
               Uninsured, 1953 - 2001
  Number of uninsured, in millions
 80      71
                 64      63
 60                             49
                                                                       40         39   41
                                                               36
 40                                             30      32
                                        23
 20

   0
    53


            58


                    63


                            70


                                   76


                                           80


                                                   87


                                                           90


                                                                   95


                                                                          00


                                                                                    01
          19




                          19




                                         19


                                                 19




                                                                 19




                                                                                  20
  19




                  19




                                 19




                                                         19




                                                                        20
Source: 1953-1976, National Health Interview Survey; 1980-1991, EBRI; 1996-2000
March Current Population Survey; 2001-2002 September Current Population Report
             Two Thirds Are Low Income:
             Uninsured Population, 2001
                        Other Children
                             8%                        Low-Income* Children
                                                               15%



         Other Adults                                                 Low-Income*
            30%                                                        Adults with
                                                                        Children
                                                                          15%




         Low-Income* Adults
          without Children
                33%
*Low income defined as under 200% poverty, $28,500 for a family of three in 2001.
Source: Commonwealth Fund Task Force and Columbia University analysis of March
2002 Current Population Survey.
Lower Income Workers Are at Risk for Access
   and Medical Bill Problems, If Uninsured
Percent of workers who had the following problems in the past year due to cost
       Lower-income uninsured*           Lower-income insured**           Higher-income insured
60%            55%
                                                              50%


40%
                            28%
                                                                           22%
20%                                     16%
                                                                                      11%


 0%
        Went without needed care due to                   Not Able to Pay Medical Bills
                          costs***
 *”Lower-income” is defined as having annual family income of less than $35,000
 ** “Insured” is insured all year
 ***Adult said he or she did not go to the doctor when needed, did not fill a prescription, did
 not follow up on recommended tests or treatment, or did not see a specialist due to costs
 Source: The Commonwealth Fund 2001 Health Insurance Survey
 Reduction in the Number of Uninsured
      Over the Course of a Year
  Percent reduction in uninsurance if everyone with
  coverage retained it during the year
50%
           40%               38%
                                               28%              30%

25%



0%
       Children <        Children            Adults        Adults 100%-
         100%           100%-200%            <100%            200%
         Poverty           Poverty           Poverty          Poverty

 Source: Leighton Ku and Donna Cohen Ross, Staying Covered: The
 Importance of Retaining Health Insurance for Low-Income Families. The
 Commonwealth Fund, December 2002
         Employment-Based Insurance
        Premiums Are on the Rise Again
      Percent change in health insurance premiums and workers’
                    earnings from previous year
                               Premiums            Worker's Earnings
 18%

              12%                                                                   13%
                                                                     11%
                             9%
   9%
                                                        5%

                                              4%            4%            4%          4%
                   3%            3%
   0%                                   1%

             1988          1993          1996          1999          2001           2002


Source: Gabel et al., “Job-Based Health Benefits in 2002: Some Important Trends,”
Health Affairs (Sept/Oct 2002): 143-151.
      Bush Health Care Proposals
• Refundable tax credits:
   – $1000 for individuals earning under $15,000
     and $3000 for families under $30,000
   – Partial subsidies up to $45,000/$60,000 for
     individuals/families
• Used to purchase individual insurance
• Permit small businesses to purchase
  health insurance plans from multi-state
  trade associations
• Expand and reform Medical Savings
  Account
Source: www.whitehouse.gov
             Democratic Proposals
• Increase federal Medicaid matching for
  every state by 2 percentage points,
  plus additional 2.5 points in states
  with high unemployment
• Allow uninsured parents to enroll in
  CHIP, renamed FamilyCare
• Allow states to cover legal immigrants
• Small business tax credit for firms
  with less than 10 employees, worth
  50% of cost for group coverage
Source: Democratic Policy Committee <democrats.senate.gov/dpc> 1/7/03
 Incremental Options for Expanding
         Public Programs
• CHIP/FHIP expanded to cover low-income
  uninsured
• Remove asset test for Medicaid,
  CHIP/FHIP
• Countercyclical enhanced match tied to
  unemployment
• Elimination of two-year waiting period for
  disabled
• Buy-in to Medicare for adults 60-64
• Buy-in for Medicare dependents
 Incremental Options for Expanding
    Employment-based Coverage
• Premium assistance/tax credits for
  COBRA for all unemployed
• Young adults covered up to age 23 under
  parents’ policy
• Use of Medicaid/CHIP funds to buy-into
  employer coverage
• State small business pools
• Incentives for employers to cover part-
  time workers, shorten waiting periods
  for coverage
     Combination Approach:
  The Congressional Health Plan
• Establish a new private group option for
  uninsured individuals and small
  businesses
• Tax credits for premiums in excess of 5-
  10% of income
• Default enrollment through income tax
  system, individual mandate or opt-out
• Medicaid/CHIP/FHIP below 150% of
  poverty
• Medicare Part E for older adults and
  disabled
• Employer COBRA premium assistance;
  “pay or play”
       Testing Tax Credit/FHIP
      Approaches at State Level
• IOM Committee on Rapid Advance
  Demonstrations
• State health insurance demonstrations (3-5)
   – Tax credits to purchase private insurance
   – Expanded eligibility for public programs, or
   – Combination
   – 10 year duration with federal funding
• Goals
   – Achieve coverage for nearly all residents of
     state
   – Right care at right time, reduce waste
   – Reduce administrative transactions and
     improve administrative efficiency
   – Establish stronger public/private partnership
• Statewide electronic enrollment clearinghouse
     Acknowledgements
• John Sheils and Randy Haugt,
  Lewin Group, people and cost
  estimates for Congressional Health
  Plan Proposal
• Cathy Schoen, VP for Health Policy,
  Research, and Evaluation,
  Commonwealth Fund
• Katie Tenney – research and
  production
• visit the Fund at:
          www.cmwf.org

				
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