Covering The Uninsured
Health care issues and political responses to universal health care coverage in the United States.
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T CQ Researcher H E PUBLISHED BY CONGRESSIONAL QUARTERLY INC. x WINNER, SOCIETY OF PROFESSIONAL JOURNALISTS AWARD FOR EXCELLENCE Covering the Uninsured Can America afford to insure everyone? T he United States is the only industrialized nation that fails to assure universal access to basic health care. Nearly 39 million people — mostly adults and children in wage-earning families — lack health insurance. Nor does holding onto a job guarantee coverage. Seven of every 10 Americans de- I pend on their employers for their insurance, but in today’s tight economy employers are chipping away at benefits, N S THIS ISSUE THE ISSUES ......................523 compelling employees to pay more of the cost and even I CHRONOLOGY ..................531 eliminating coverage entirely. Four health-care proposals are D BACKGROUND ..................532 E being considered in Congress, but all would provide only CURRENT SITUATION ..........534 limited benefits. Critics of universal coverage say the nation OUTLOOK ........................536 can’t afford to insure everyone. But health-care advocates say AT ISSUE ..........................537 the nation’s piecemeal approach to insurance doesn’t keep BIBLIOGRAPHY ..................541 Americans healthy — and costs more in the long run. THE NEXT STEP ................542 L IA June 14, 2002 • Volume 12, No. 23 • Pages 521-544 TR r ve EB co W www.cqpress.com ck EE ba FR e Se COVERING THE UNINSURED T CQ Researcher H E THE ISSUES SIDEBARS AND GRAPHICS June 14, 2002 Volume 12, No. 23 • Can America afford Most Uninsured Adults Are 523 health insurance for all? 524 Young More than half of those under MANAGING EDITOR: Thomas J. Colin • Should Medicare cover prescription drugs for the 25 were uninsured in 2000. ASSISTANT MANAGING EDITOR: Kathy Koch poorest seniors? Minorities Make Up Most STAFF WRITERS: Mary H. Cooper, • Should small businesses 526 of the Uninsured Brian Hansen, Kenneth Jost, David Masci be allowed to band togeth- Nearly half of America’s 39 CONTRIBUTING WRITERS: Rachel S. Cox, er to buy health insurance? million uninsured people are Sarah Glazer, David Hosansky, black or Hispanic. Patrick Marshall, Jane Tanner BACKGROUND PRODUCTION EDITOR: Olu B. Davis Tampa’s Do-It-Yourself Recurring Quest 528 ASSISTANT EDITOR: Benton Ives-Halperin 532 Major health-care reforms Health Care How the Florida city and were sought five times in other local governments fund the 20th century. health care for the uninsured. Uninsured Get Fewer 534 The Clinton Debacle 529 Diagnostic Tests President Bill Clinton’s pro- The insured get more pre- posed Health Security Act ventive tests. A Division of was defeated resoundingly. Congressional Quarterly Inc. Chronology 531 Key events since 1847. SENIOR VICE PRESIDENT/GENERAL MANAGER: John A. Jenkins CURRENT SITUATION DIRECTOR, LIBRARY PUBLISHING: Kathryn C. Suarez Universal Health Insurance Drugs for the Elderly 533 Not a Cure-All 534 Free medications for some Studies say free insurance DIRECTOR, OPERATIONS: Sandra D. Adams seniors may become a po- would not eliminate disparities CONGRESSIONAL QUARTERLY INC. litical priority this fall. in health care. CHAIRMAN: Andrew Barnes Fewer Small Employers 535 Tax Credits 535 Offer Coverage VICE CHAIRMAN: Andrew P. Corty President Bush recommends Small businesses began cutting PRESIDENT AND PUBLISHER: Robert W. Merry tax credits to help families back in 2000. buy health insurance. Copyright © 2002 CQ Press, a division of Congres- At Issue Shrinking Safety Net 537 Would tax credits for health sional Quarterly Inc. (CQ). CQ reserves all copy- 536 Medicaid and Medicare insurance help the uninsured? right and other rights herein, unless previously spec- ified in writing. No part of this publication may be have been cut. reproduced electronically or otherwise, without prior written permission. Unauthorized reproduction or FOR FURTHER RESEARCH transmission of CQ copyrighted material is a viola- OUTLOOK For More Information tion of federal law carrying civil fines of up to 540 Organizations to contact. $100,000. Major Crisis? 536 Many commentators be- Bibliography The CQ Researcher (ISSN 1056-2036) is printed on lieve the nation faces a 541 Selected sources used. acid-free paper. Published weekly, except Jan. 4, coming health-care crisis. June 28, July 5, July 19, Aug. 9 Aug. 16, Nov. 29 and Dec. 27, by Congressional Quarterly Inc. An- The Next Step Election Politics 542 nual subscription rate for libraries, businesses and 538 Health-reform campaigns Additional articles from current periodicals. government is $530. Single issues are available for $10 (subscribers) or $20 (non-subscribers). Quanti- may have an impact in ty discounts apply to orders over 10. Additional rates Citing The CQ Researcher the fall elections. 543 Sample bibliography formats. furnished upon request. Periodicals postage paid at Washington, D.C., and additional mailing offices. POSTMASTER: Send address changes to The CQ Researcher, 1255 22nd St., N.W., Suite 400, Wash- Cover: Pediatrician Wilma Bausas examines Jonathan Valdez at a health clinic in El Paso, ington, D.C. 20037. Texas. About 1.4 million Texas children are uninsured. (Newsmakers/Joe Raedle) 522 CQ Researcher Covering the Uninsured BY KEITH EPSTEIN THE ISSUES than any other industrialized nation, but it is the only de- veloped country that does not I t did not seem like a big thing. On the swing set at his rural North Car- olina preschool three years ago, 5-year-old Dalton Dawes assure universal access to basic health care. Unlike the British or Canadians, for in- stance, all Americans are not entitled to affordable medi- and a classmate bumped into cine or treatment — or to each other. Then began his keeping their existing cover- parents’ worst nightmare. age if their financial circum- Dalton is a hemophiliac, stances change. Partly as a and he began to bleed in- result, the United States ranks ternally. Dalton had been re- 37th in the World Health Or- ceiving twice-weekly injec- ganization’s ranking of the tions of a blood-clotting agent world’s healthiest countries. 2 almost since birth. Now he Nearly one in seven Amer- Family Photo would need them more often. icans — 38.7 million people The drug would do more — lacks insurance, more than than simply allow him to live the combined populations of a normal child’s life, playing Texas, Florida and Connecti- soccer and roaming the near- Expensive medication makes a normal life possible for cut. 3 Eight in 10 of the unin- by woods. It would keep Dalton Dawes, a hemophiliac in rural North Carolina, sured are members of work- him from bleeding to death. but the cost forced his parents to impoverish themselves ing families — too well off to qualify for Medicaid coverage. Yet the family’s health insur- for Medicaid and other pub- er would not provide cover- lic programs but too poor to age. Nor could his parents, despite Medicaid but too poor to afford pri- pay private health insurance premiums. their good jobs, afford the $2,000 week- vate insurance. The lack of universal coverage, some ly expense — for years to come. Unfortunately, North Carolina’s CHIP critics say, stems from the government’s So Leonard Poe, a lawyer, and program had run out of money by historically piecemeal approach to Heather Dawes, a paralegal, impover- March 2001. And there were more health insurance — a complicated ished themselves. They sold off land than 23,000 other children besides patchwork of private and government- and built a home from logs. They dis- Dalton waiting to join the program. subsidized coverage more like a sieve pensed with the dishwasher and TV. To keep up Dalton’s medication, than a shield. And while there has been By reducing their earnings to less than his parents relied on drug-company some progress in recent years — es- $23,000 a year, they qualified for Med- charity and considered moving to a tablishing the CHIP program and al- icaid, the government health-insurance state with a CHIP program that was lowing workers to change or lose a job program for the poor. taking new clients. without losing insurance — many peo- After Dalton’s seventh birthday, his By last September, when the North ple still fall through the cracks in cov- parents had to cut their income even Carolina legislature restarted the pro- erage. 4 For example, only 6 percent of further — to $15,492 — in order to gram, Dalton had only three weeks’ the children eligible for CHIP benefits remain eligible for Medicaid. Instead, worth of the life-preserving injections are enrolled in the program. 5 they tried to enroll him in the Chil- left. 1 The absence of universal health cov- dren’s Health Insurance Initiative (CHIP). “It’s incredibly depressing,” Heather erage has been called “one of the Congress passed CHIP in 1997 to Dawes says. “The worst thing is, I was- great, unsolved problems facing the tackle a worrisome statistic: the rough- n’t just fighting my own battle. There United States at the onset of the 21st ly 10 million American children whose are millions of people in this county century.” 6 families lacked health insurance. The who are cut off from good medical The problem affects Americans re- largest single expansion of public health care. They don’t deserve this. It’s awful.” gardless of their age, education or place coverage in three decades, CHIP took The United States spends $1.3 tril- of residence. More than half the unin- direct aim at families too well off for lion on health care each year, more sured are full-time workers or their CQ on the Web: www.cqpress.com June 14, 2002 523 COVERING THE UNINSURED tients — and our security as a nation Most Uninsured Adults Are Young — depends on it.” 13 Nearly a quarter of the adults ages 18-20 — and almost a third of Even before the recession, real in- come and purchasing power were lag- those in their early 20s — did not have health insurance in 2000. ging behind the double-digit rates of in- Percentage flation for drugs, health services and insurance, which are expected to rise 13 35 to 16 percent this year. “If we have more Percentage of Uninsured Adults years of double-digit increases, people 30 in Each Age Group in 2000 will be priced out of the market,” said 30.1% Paul B. Ginsburg, president of the Cen- 25 ter for Studying Health System Change. 24.2% And the situation is likely to get 20 21.3% worse. According to the Centers for Medicare and Medicaid Services, 15 health spending will reach $2.8 trillion 15.6% by 2011 — a staggering 17 percent of 13.7% 10 12.0% the gross domestic product. 14 Cash-strapped state governments — which pay for the bulk of Medicaid 5 — can’t keep up with spiraling health costs. “Our challenge is to find a way 0 to not cut services when we have less 18-20 21-24 25-34 35-44 45-54 55-64 money than we had the year before,” Ages said Gov. Paul E. Patton, D-Ky., vice chairman of the National Governors’ Note: Percentages add to more than 100 because each age group is measured Association (NGA). 15 separately. State governments, collectively bil- Source: Employee Benefit Research Institute, Feb. 5, 2002 lions of dollars in the red, have begun trimming Medicaid benefits, sparking dependents. Nearly 20 million are white, In Florida, a Chamber of Commerce protests from Hawaii to Arkansas. 16 11 million are Hispanic and 7 million survey found that only 77 percent of Dozens of states are trying to force are black, according to the Census Bu- businesses offered health insurance to drug manufacturers to provide dis- reau. 7 Only Americans over 65 are employees in late 2001, down sharply counts for the poor. 17 In Mississippi, theoretically assured of health securi- from 91 percent in 1999. 10 Nationwide, the Medicaid program ran out of money ty, through Medicare. But Medicare another survey found that 44 percent in March. At least 14 states are con- doesn’t cover the cost of most drugs, of U.S. employers were “very” or sidering increasing the eligibility re- and critics say rising drug prices mean “somewhat” likely to increase workers’ quirements for Medicaid and CHIP, thus seniors are not really protected if they out-of-pocket premiums during 2002. 11 reducing the number of people who can see doctors but can’t afford the Others have solved the problem by qualify for those safety-net services. drugs they prescribe. downsizing their staffs and outsourc- The health implications of inadequate And the ranks of the uninsured have ing work to contractors, who by de- insurance are stark. The Institute of Med- been rising for most of the last 15 years finition do not qualify for medical ben- icine estimates that 18,000 Americans — even during recent periods of record- efits. During last year’s recession and die prematurely each year as a result breaking economic prosperity. 8 Seven layoffs, 2.2 million Americans lost their of not having health insurance — usu- of every 10 American workers depend insurance, and a third of them prob- ally because they discover too late that on their employers for health insur- ably lost their health coverage at the they have a treatable disease. 18 Oth- ance, but as health-care costs have sky- same time. 12 ers never receive timely treatment for rocketed in recent years, companies “We face a crisis, and we need to diabetes, mental illness and other con- have begun asking employees to pay act,” said Yank D. Coble Jr., president ditions and eventually must be hospi- a greater share of the cost, or elimi- of the American Medical Association talized, a far more costly solution than nating coverage entirely. 9 (AMA). “The good health of our pa- early care in a doctor’s office. 19 524 CQ Researcher “The hard truth is that Americans without health-care coverage live sick- Most Uninsured Children Have Working Parents er and die younger,” Coble said. “It’s More than two-thirds of the 8.4 million children under 18 who don’t bad fiscal policy. It’s bad public pol- have health insurance have parents or guardians who work full time. icy. And it’s bad medicine.” 20 “Charitable physicians and the safe- ty net of community clinics and pub- Work Status of Heads of Household, 2000 lic hospitals do not substitute for real (Who have children without insurance) health coverage,” said Adam Searing, project director of the North Carolina Full Year, Health Access Coalition. “Need a con- Part Time crete example? Look no farther than Dalton Dawes.” 21 Part Year, 6.0% The issue brought together two Full Time Full Year, Washington lobbying groups usually 5.4% Full Time on opposite sides of the health-poli- Part Year, cy debate: the U.S. Chamber of Com- Part Time 7.4% 67.0% merce and the AFL-CIO. In February, they helped create the Covering the Uninsured coalition — along with busi- 14.1% ness groups, consumer and family ad- Non-Worker vocates and health-care providers — dedicated to solving the problem. 22 Nearly a third of voters want the health-care system “radically changed,” Note: Percentages do not add up to 100 due to rounding. according to Republican pollster Bill Source: Employee Benefit Research Institute, Jan. 15, 2002 McInturff. 23 President Bush has pro- posed new tax credits to help the unin- sured pay for health coverage, a ident Bill Clinton’s call for universal think a large federal bureaucracy can change he said would “reform health coverage foundered spectacularly. solve the problem. care in America.” 24 And both politi- The failure of Clinton’s health-care Yet, if the situation isn’t remedied, cal parties have suggested prescription- reform “still hangs like a dark cloud the coming convergence over the next drug subsidies for the elderly. 25 over contemporary health-care de- decade of escalating costs, budget short- Across the country this year, peo- bates,” writes Harvard political scien- falls and vastly increased needs could ple are peppering campaigners for Con- tist Jacob Hacker. 27 And this year overwhelm the health-care system and gress with questions about health care. Washington again shows every sign of increase the ranks of the uninsured to A Colorado candidate for the U.S. Sen- deferring the issue. “We’re not going as many as 61 million. “We are head- ate expected a coal company execu- to deal with it in an election year, ing for a social and health-care de- tive to quiz him on energy issues — that’s for sure,” said a key health-pol- bacle of gigantic proportions,” warned only to have him complain about the icy player, Sen. John B. Breaux, D-La. Harold G. Koenig, a professor of med- company’s $10 million annual bill for 28 People of both parties are “scared icine at Duke University. 30 retired workers’ prescription drugs. 26 of being labeled Clintonites,” explained As Congress, the White House and The problem is hardly new. In 1912, Robert Reischauer, who ran the Con- local leaders grapple with the nation’s presidential candidate Theodore Roo- gressional Budget Office in 1993. 29 uninsured, these are some of the ques- sevelt pledged to make employees, em- Thus, while employers, hospitals, tions being debated: ployers and “the people at large” pay doctors and governors clamor for for insurance against the “hazards of help, health-care proposals now pend- Can America afford health insur- sickness, accident, invalidism, involun- ing in Congress would offer only lim- ance for all? tary unemployment and old age.” His ited benefits. Lawmakers believe — On the surface, the nation shows proposal — often repeated by other despite the opinion surveys — that every sign of not being able to afford politicians over the years — was most Americans prefer their health-care caring for the uninsured and disen- recently squelched in 1994, when Pres- progress in small doses and do not franchised. Community and public health CQ on the Web: www.cqpress.com June 14, 2002 525 COVERING THE UNINSURED centers, hospital clinics, inpatient facili- ready being spent on the uninsured. ties and emergency rooms all are show- Minorities Make Up It would cost less, he says, to com- ing stresses from government cutbacks. Most of the Uninsured pel every citizen to buy health insur- As spending spirals to new levels, states, ance, with the poor receiving gov- Congress, employers and insurers all are Nearly half of America’s 39 ernment vouchers for part of the cost in the mood to cut and constrain — million uninsured people are and the poorest receiving certificates not add to financial obligations. black or Hispanic, and 45 covering the entire amount. Others The Balanced Budget Act of 1997, percent are white. would receive tax credits, and em- for instance, reduced payments to fed- ployers would receive tax deductions. erally licensed community health cen- Percentages of the “It would be cheaper — and every- ters, cut Medicare reimbursement rates body would be covered,” he says, es- Uninsured, by Race to hospitals and prevented hospitals timating a total cost of between $11 from challenging the adequacy of Med- (Excluding those over 65) billion and $86 billion a year. 32 icaid payments. Since then, states have Other Under the current system, the unin- cut back on Medicaid payments, and sured end up using emergency rooms some large health plans have pulled 6% for most of their care because they out of the Medicaid market altogether. tend to wait until their condition is Communities are seeking creative so- Black critical before seeking care at hospi- lutions, but few at any level of gov- White tals, which must treat them. Research 24% ernment or industry are saying they can 45% for the National Health Policy Forum afford more. 31 (See sidebar, p. 528.) shows that about three-fourths of all But Don Young, president of the Hispanic emergency room (ER) visits in which Health Insurance Association of Amer- 25% patients are not admitted should have ica, believes they can. “It’s more of a been treated elsewhere. willingness to pay — and that will- Because ER care is one of the costli- ingness will have to come from a num- est forms of treatment, the current sys- ber of places,” he says. The task could tem helps drive up health-care costs, Source: Employee Benefit Research be accomplished with expansions in critics say. The lack of universal cov- Institute, Feb. 5, 2002 Medicaid, CHIP, tax credits and tax in- erage prevents the poor from getting centives. “If the American public wants treatment more cheaply — in a pri- to do it, it is certainly affordable.” payment or underpayment by others mary physician’s office when their ail- Ron Pollack, executive director of — a system called “cost shifting.” ments are in their infancy — thus fu- the national consumer organization The uninsured are “freeloaders,” he eling the increase in health-care costs. Families USA, agrees. “Covering the says bluntly. “When someone shoplifts When the uninsured cannot afford uninsured has never truly been a ques- a sweater, the rest of us have to pay emergency care, hospitals, businesses, tion of cost,” he says. “We’re the rich- for the sweater because it costs us insurers and taxpayers pick up the tab. est nation in the history of the plan- more. The [uninsured] are shoplifters.” Hospitals alone absorb an estimated et. The question is whether we have Young admits that hospital revenues $19 billion per year in uncompensat- the political will for it.” run at about 114 percent of costs — ed care for the uninsured. 33 But Kenneth S. Abramowitz, a man- so the excess can subsidize the unin- Such uncovered care amounts to “an aging director of the influential Car- sured. Also, Medicare and Medicaid unlegislated tax,” says Peter Schonfeld, lyle Group investment firm and a long- compensate hospitals that serve pre- senior vice president for policy of the time health-industry analyst, says dominantly poor populations at a high- Michigan Health and Hospital Associ- Americans already pay for universal er rate than other hospitals. “Those hid- ation. Because legislators don’t want to coverage — through higher health-care den costs are there,” Young says. “The raise taxes, he says, “They shift the cost costs for everyone else. uninsured are being covered — they’re elsewhere, hiding it from the public.” “When you or I buy insurance — getting services, paid for by the gov- And the hidden “tax” is going up. or the company we work for does — ernment through tax dollars and sub- The number of emergency room vis- we’re paying for the uninsured,” says sidies from private insurers.” its increased 15 percent nationally be- Abramowitz. Most insurance premi- Abramowitz estimates that half the tween 1990 and 1999, according to the ums are inflated by about 12.5 per- cost of any hypothetical government American Hospital Association, largely cent, he says, to compensate for non- program to cover the uninsured is al- due to a surge in uninsured visits. In 526 CQ Researcher California, 82 percent of the Seniors and the disabled — more than 9.2 million pa- among the nation’s most de- tients who are treated in pendent users of medications emergency rooms each year — often must pay full price cost the hospitals money for drugs, while those with pri- — up to $48 in uncom- vate group insurance plans pensated care per visit. 34 often pay less because of their Because of the overuse company’s purchasing power. of emergency rooms and For instance, a cholesterol-low- state and federal cutbacks ering medication can cost a in hospital reimbursements senior more than $300 for three for Medicaid and Medicare months, compared with only patients, hospitals nation- about $50 for someone with wide have begun diverting private insurance. patients to other facilities. The big question for law- A survey by the Democra- makers is not whether to add tic staff of the House Gov- prescription benefits to Covering the Uninsured Coalition ernment Reform Commit- Medicare but how many se- tee found that overcrowded niors to give it to — in other ERs are causing “substan- words, how to pay for it. Fac- tial problems accessing ing a budget deficit, even the emergency services” in 22 smallest new benefit would states — especially in cities hit taxpayers hard. with large numbers of The president wants to uninsured residents. Some spend $190 billion over the hospitals simply close their next 10 years to provide free doors to those unable to An unprecedented alliance of normally adversarial prescriptions to any Medicare pay and for whom the hos- business and consumer groups known as the Covering the recipient with an annual in- pital could collect no com- Uninsured coalition has launched a nationwide publicity come under $11,610, or cou- pensation elsewhere. 35 campaign to raise awareness about the 39 million ples earning up to $17,415. More than 90 percent Americans who lack health insurance. The proposal is especially of large hospitals with 300 controversial because Medicare beds or more report emergency rooms only a few drugs, such as certain can- has never had salary caps before. Op- at — or “over” — capacity. Hospitals cer medications. Some seniors purchase ponents say providing benefits only to over capacity place patients in other supplemental coverage — such as Medi- the lowest-income seniors undermines areas, such as hallways. 36 gap or Medicare + Choice, and some Medicare’s original covenant with the “Unless the problem is solved in the states provide additional coverage for elderly — to provide coverage to every near future,” cautioned the Annals of services or prescriptions. person over 65, regardless of income. Emergency Medicine, “the general pub- President Bush, members of both Otherwise, they argue, Medicare be- lic may no longer be able to rely on parties in Congress and a wide range comes a welfare program. emergency departments for quality and of interest groups want the govern- Nevertheless, House Republicans pro- timely emergency care, placing the ment to subsidize the skyrocketing pose covering only the poorest seniors: people of this country at risk.” 37 cost of pharmaceuticals for Medicare The plan calls for the government cov- recipients. Their interest in the issue ering part of the first $5,000 a year in Should Medicare cover prescription is not only a sign of the problem — drug expenses, and everything above drugs for the poorest seniors? but also of politics: The more than 10 $5,000. Seniors would pay $37 in month- If Congress does anything on health million seniors and persons with dis- ly premiums. The plan would cost the care this year, it most likely will involve abilities who lack prescription-drug cov- government $350 billion and benefit a distinct population already receiving erage could be critical to the outcome only half the nation’s Medicare recipi- huge publicly financed benefits — se- of midterm congressional elections this ents. Couples with incomes over $18,000, niors and disabled persons enrolled in year, which could alter the balance of or individuals earning above $13,000, Medicare. Currently, Medicare covers power in Washington. would not be covered. CQ on the Web: www.cqpress.com June 14, 2002 527 COVERING THE UNINSURED Tampa’s Do-It-Yourself Health Care F aced with overburdened emergency rooms and sharp the sales tax alone. Since 1999, the Robert Wood Johnson Foun- drops in state and federal funding for the poor, some dation has been encouraging other communities to follow suit, local governments are providing health care for their as have the Ford Foundation and the National Association of uninsured residents — in some cases with surprising success. Counties. Florida’s vast Hillsborough County — a community the size Tampa’s program grew out of the increasing burden of pro- of Rhode Island — raised its sales taxes to buy medical cov- viding care for an estimated 117,000 uninsured residents — erage for 29,000 uninsured low-income residents in the Tampa nearly 14 percent of the county’s population. With health-care area. The scheme has dramatically lowered hospital admission costs escalating 17 percent annually, community leaders wor- rates and reduced complications from treatable ailments, such ried that property taxes would not be able to support the care as diabetes and asthma. It also saves the county $50 million a of the poor forever. year in property taxes that finance local public hospitals. In 1991, the state legislature agreed to a half-cent increase The county’s benefits “package” — including preventive care, in the sales tax to start the new program. Despite a drop in pharmaceuticals, referrals to specialists, hospital services, home funding to a quarter-cent after the program reported a surplus health care and vision and dental coverage — rivals the most in 1997, it still manages to serve the same number of patients, expensive plans of private health insurers. And yet it costs tax- who can earn no more than the federal poverty level — $8,500 payers virtually nothing. for an individual, $14,500 for a family — in order to qualify. Meanwhile, the emergency rooms at Tampa General Hos- Chief among the beneficiaries are men and women who pital are no longer overrun. And the county’s costs for cover- don’t qualify for federal and state medical safety nets like Med- ing the uninsured are down from $600 a year per uninsured icaid and Medicare — mainly mothers of children, young work- patient to $262, and average hospital stays are down to only ing men and middle-aged women. five days — about half what they used to be. Complications All receive care through a network of five hospitals and 1,700 from asthma, which accounted for nine in 10 visits to emer- physicians. Generally, doctors are reimbursed at 75 percent of Med- gency rooms, now amount to fewer than one in 100 visits. Di- icaid rates. The doctors and hospitals bill the county directly. abetes also is being detected earlier. County officials say the biggest fear when the program start- “We give better health to more people for less money,” says ed — that it would attract people with HIV, sapping the sys- Toni Beddingfield, community relations director for Hillsbor- tem of resources — never materialized. ough County’s Department of Health and Human Services. Beddingfield acknowledges that because of politics and other “We’ve saved property-tax dollars — and we’ve saved lives.” factors most communities may find it difficult to start a local Local officials from around the country began taking note health-care program by raising sales taxes. And yet, she argues, of the Hillsborough HealthCare program even before the fed- they should try. eral Health Resources and Services Administration two years “What’s the alternative? Raising property taxes? Letting all ago endorsed it as a “model that works.” these people fall between the cracks? Filling emergency rooms Similar experiments are under way in other urban areas that and ending up having to spend far more money than you have large numbers of uninsured citizens, including Miami, El could save?” Emergency room care is far more expensive than Paso, Texas, Augusta, Ga., and Kansas City, Mo. primary or preventive care in a doctor’s office. Communities are trying other approaches as well. In Jack- Back in his days as a state legislator, U.S. Rep. Jim Davis, son, Miss., and Washington state, public health programs for D-Fla., enthusiastically backed Tampa’s program. Now, he says the poor are financed with money from the $246 billion set- proudly, “It’s really working. It’s made the difference we all tlements in the huge 1998 class action lawsuit against tobacco expected to see.” companies. 1 In Portland, Maine, and Detroit, hospitals pool their money to provide primary care — keeping people health- 1 For background, see Kenneth Jost, “Closing In on Tobacco,” The CQ ier and out of hospitals. Researcher, Nov. 12, 1999, pp. 977-1000; and Kenneth Jost, “High-Impact Litigation,” The CQ Researcher, Feb. 11, 2000, pp. 89-112. But Hillsborough is trying to make do with money from Republicans argue that in belt-tight- tal coverage, some of which covers solution should focus on the 35 per- ening times — and when so much prescriptions. Providing free drugs for cent of Medicare recipients “who truly money is being diverted to fight ter- all seniors could “bankrupt the pro- need a prescription-drug benefit.” rorism — benefits should go to those gram,” hurting all Medicare beneficia- In the Senate, Democrats propose who need them most. They point out ries, according to a GOP “Talking spending up to $500 billion, arguing that Medicare beneficiaries who can Points” memo prepared for House that Bush’s plan only covers 3 million afford it already pay for supplemen- members. Instead, it suggested, any seniors — a third of those needing 528 CQ Researcher help. “The best way to help low-in- come seniors is to help all seniors,” Uninsured Get Fewer Diagnostic Tests says Rep. John D. Dingell, D-Mich. Far more American workers get diagnostic exams when they have The president’s proposals are “tem- porary solutions” that “ignore the larg- health insurance than those without insurance. Among women, half er task at hand” — creating a uni- of those with insurance in 1996 got a mammogram that year, versal Medicare drug benefit. compared to only a third of the uninsured. Among men, 65 percent AARP, the influential seniors’ lobby, of the uninsured workers in 1996 had never had a prostate exam, estimates it would cost around $750 compared to 42 percent of those with insurance. million to cover prescription-drug ben- efits to every American over 65. With- Percentage of Female Workers Who Percentage of Male Workers Who out it, the group says, millions of el- Had a Mammogram, Ages 40-64 Had a Prostate Exam, Ages 18-64 derly Americans will continue the (By Insurance Status, 1996) (By Insurance Status, 1996) dangerous practices they now use to stretch their medicine budgets: skip- 80% 80% ping doses, splitting pills and sharing medications with friends. 70 70 Some seniors go without pills en- 60 60 65% tirely. In a 1995 survey, Medicare ben- 50 50 eficiaries lacking drug coverage were 50% less likely than those with drug cov- 40 40 42% erage to fill prescriptions for anti-hy- 30 30 30% 28% pertensive medications needed to lower 20 20 24% the risk of heart attack, heart failure, 10 12% 10 stroke and kidney failure. 38 9% The average Medicare beneficiary 0 0 Within the Never Within the Never with drug coverage fills 22 prescriptions past year past year per year, while those without it fill just 14. The ramifications are clear: Those in poor health take far fewer medica- Insured Uninsured tions than their healthy counterparts. 39 Price discrimination is not unique Source: Employee Benefit Research Institute to the drug industry. Business travel- ers, for example, pay much higher air- Meanwhile, average prescription- However, rising drug prices could line fares than leisure travelers. In the drug prices have doubled in the past drive up the cost of an eventual Medicare pharmaceutical world, health mainte- decade. 40 Drug companies have re- drug benefit, making it impossible to nance organizations (HMOs) and ben- sisted lowering prices, arguing that re- calculate the long-term price tag for a efits plan administrators negotiate search, development and testing rep- new Medicare benefit. And once in price breaks. resent a huge investment, not to place, such a benefit — despite its high HMOs and other “third-party” buy- mention a high risk. cost or federal budget shortfalls — would ers account for more than 90 percent Clinical trials are more complex and be difficult to withdraw. Programs with of all pharmaceutical sales. By pur- costs have increased, noted an August such a large and influential constituen- chasing large volumes of drugs, they 2001 Ernst & Young analysis for the cy are not easily eliminated. can negotiate steep discounts, some- Pharmaceutical Research and Manufac- Thus, some policymakers have sug- times shaving 25 percent or more off turers of America. One successful pill gested imposing price controls on pre- the price of a drug. In addition, state can represent 10-15 years and $802 mil- scription drugs. The pharmaceutical prescription-drug assistance plans, lion of research and development, as industry opposes price controls, argu- programs sponsored by pharmaceuti- the medicine moves from the labora- ing they would have a chilling effect cal companies and organizations like tory bench to the pharmacy shelf, says on the quest for cures and would im- AARP offer discounts and other ben- the analysis. Only three of 10 market- pede free-market forces. efits to distinct populations. But unin- ed drugs produce revenues that match Adding a prescription-drug benefit sured consumers enjoy no such clout. or exceed average development costs. to Medicare is widely viewed as in CQ on the Web: www.cqpress.com June 14, 2002 529 COVERING THE UNINSURED keeping with Medicare’s original in- which at least one person works part working Americans to the ranks of the tent of lessening the burden of health or full time. 43 privately insured without spending a care for all seniors. Nevertheless, both And the situation is getting worse: dime of public money. supporters and opponents of Medicare Small businesses’ cost of insuring em- “Before adding millions in new fed- benefits for prescription drugs lament ployees is expected to jump as much eral spending and more mandates, that the nation’s biggest health prob- as 20 percent this year — on top of shouldn’t we look for free-market so- lem — uninsured Americans — re- a 10-12 percent increase over the last lutions that empower individuals?” mains unaddressed. three years. In some parts of the coun- Dan Danner, senior vice president of “It’s really a shame the focus is so try, the situation is even more severe. the National Federation of Small Busi- much on drugs for seniors,” says Chip Annual premium increases for small- ness, asked the House in a letter a Kahn, president of the Federation of business owners in Florida were ex- year ago. 45 American Hospitals, “when most of pected to go up 20-30 percent this year, The Blue Cross and Blue Shield As- the uninsured are low-income work- according to the National Federation of sociation, the dominant small-business ing families. They’re the ones who are Independent Businesses of Florida. 44 health insurer in at least half the states, totally exposed.” After at least four years of aggres- opposes the measure. Danner told the sive lobbying for a change, small busi- House the group opposes it because Should small businesses be allowed nesses and their employees may fi- “they’re against anything that forces to band together to buy health in- nally be close to having an alternative. them to compete for business.” surance for their employees? Proposed patients’-rights legislation al- But Mary Nell Lehnhard, a Blue Ninety-nine percent of the nation’s lows small employers to band together Cross senior vice president, called the big companies (those with more than across state lines to buy health insur- current proposal for association plans 200 employees) offer tax-subsidized ance, giving them greater power to “a shell game rather than a serious health benefits, which cost the aver- bargain for prices and coverage. The proposal for the uninsured.” age worker about $2,426 a year. Be- legislation passed the House last Au- Because the House stipulated that cause large employers enjoy greater gust and is awaiting Senate action. the new plans should not be regulat- economies of scale and can pool their The proposed law would permit ed by the states, they would provide risk, their employees pay considerably trade and professional organizations only temporary savings and trigger a less than if they purchased health in- like the National Restaurant Associa- collapse of the state-regulated market, surance individually. tion or the U.S. Chamber of Commerce Lehnhard said, leading to a return to But small-business owners like John to sponsor and negotiate not-for-prof- higher premiums and undoing years Nicholson, who operates a flower shop it health-care plans known as associ- of reforms. in Arlington, Va., have no such pur- ation health plans. In theory, efficien- Pollack of Families USA said that chasing clout. Nicholson could not af- cies and savings would be passed along without being subject to state rules, ford coverage for his 10 employees, to employers and employees through association plans could exclude men- and most insurers offered no policies lower premiums. tal health services or home health appropriate for a small work force. The measure faces formidable op- care and might engage in discrimi- Eventually, he signed up with a local position in the Senate, which agreed natory underwriting. For example, he HMO, paying $3,300 per worker. 41 to a patients’-rights bill — giving pa- said, benefit packages could be de- Soaring health-care costs hit small tients more of a voice in their treat- signed to attract healthy people, businesses harder than larger compa- ment by HMOs — but excluded any while discouraging sick people from nies, and their premium rates are ris- provision for association health plans. joining. As a result, Pollack says that ing faster. But it’s not just a problem Similar bills passed the House four while he supports businesses band- for employers. Since a large percent- times in recent years, only to languish ing together to buy insurance, “the age of all employees work for small in the Senate, where they couldn’t gar- measure approved by the House could businesses, the lack of affordable health ner sufficient support because of pres- make the problems existing today insurance among small businesses dra- sure from the insurance industry. even worse.” matically impacts the nation’s overall This year, with intensifying pressure The NGA supports the idea, but not health-care costs. 42 In fact, a third of to tackle health costs, the tide finally the bill. State oversight is necessary, uninsured Americans work for em- may turn in the Senate. Association the governors say, “to protect consumers ployers that do not offer any health health plans are attractive to many, in- and small businesses from fraud and coverage, and 82 percent of the unin- cluding President Bush, because — at abuse and underinsurance.” 46 sured are members of families in least in theory — they promise to add Continued on p. 532 530 CQ Researcher Chronology 1935 1990 1850s-1870s Early health insurance covers President Franklin D. Roosevelt signs the Social Security Act, President George Bush proposes expanding health insurance through workers and private citizens. prompting supporters to urge the tax breaks. second step: a national health in- 1847 surance system. 1991 Massachusetts Health Insurance Co. Democratic Senate candidate Harris of Boston issues “sickness insurance.” 1945 Wofford unexpectedly trounces a President Harry S. Truman seeks to two-time Pennsylvania governor by 1853 include universal health insurance declaring that working Americans French immigrants in San Francis- in Social Security. have “a right to a doctor.” co found the La Société Franaçaise de Bienfaisance Mutuelle — The 1956 1992 French Mutual Benevolent Society Disability-insurance program is Presidential candidate Bill Clinton — the first prepaid medical-insur- added to Social Security. rides the public’s health-care anxi- ance program in California and eties to the Democratic nomination. probably the U.S. • He vows to “take on the health- care profiteers and make health 1870 care affordable for every family.” Railroad and lumber companies deduct from workers’ wages to 1960s-1980s Medicare and Medicaid are cre- 1993-1994 provide health care. ated to cover health care for the Clinton puts first lady Hillary Rod- poor and elderly. ham Clinton in charge of pushing • his Health Security Act. The health- 1965 care industry opposes the idea; the President Lyndon B. Johnson signs plan is resoundingly defeated. 1900s-1920s Politicians begin calling for na- bill creating Medicare and Medicaid. 1996 tional health insurance. 1972 The Health Insurance Portability and President Richard M. Nixon propos- Accountability Act prohibits insurers 1912 es comprehensive, “high-quality” from enforcing pre-existing condition Presidential candidate Theodore health care for every American. clauses, making it easier for employ- Roosevelt makes his sweeping na- ees to carry insurance between jobs. tional health insurance plan a 1973 principal plank in the Progressive The Health Maintenance Organiza- 1997 Party platform. tion Act establishes requirements The Balanced Budget Act creates for federally designated HMOs. the Children’s Health Insurance 1915 Program, providing federal match- The first of 16 states consider and 1985 ing funds to states to expand cov- reject compulsory insurance. The Consolidated Omnibus Budget erage to families with children Reconciliation Act (COBRA) is whose incomes were below twice 1929 passed, requiring employers to the poverty line. The forerunner of Blue Cross is born. provide 18 months of continued coverage to terminated employees. 1995 Enrollment in managed-care plans • reaches nearly 58 million, from 26 • million in 1986. 1930s-1950s 1990s-2000s Passage of Social Security fails 2001 The House passes a “patients’ bill to spur support for national Universal coverage is back on of rights” giving patients more of a health insurance. the agenda. voice in managed-care programs. CQ on the Web: www.cqpress.com June 14, 2002 531 COVERING THE UNINSURED Continued from p. 530 the mid-1990s, the story mostly repeats: Yet Truman faced formidable foes. But Kahn of the hospital federation Proposals to expand coverage are often The AMA branded his plan “socialized counters, “Nothing that expands health considered but rarely enacted, and then medicine.” Enemies kept asking his coverage to more people will be only on a piecemeal basis. physician, Wallace H. Graham, “are ideal,” he says. “We’re not talking about Every 15 years or so, movements you a socialist, doctor?” 51 By the end Cadillacs here; we’re talking about arouse great enthusiasm, only to fail of his time in the White House, Tru- Chevys, at best. But at least we’re talk- spectacularly. 47 In the end, peripher- man had given up his vision of uni- ing about Chevys for people who now al improvements have benefited spe- versal coverage. have no car at all.” cific populations — the elderly, the During World War II, health insur- Just how many people would be disabled, low-income children and ance had become a common employee newly insured? The Congressional Bud- certain low-income adults. But uni- benefit, primarily as a way to attract get Office (CBO) foresees the inno- versal coverage, though enticing to workers in a tight labor market. Dur- vation worsening conditions for four both politicians and the body politic, ing the four decades after the war, the in five workers. It says 20 million em- is as elusive as the Holy Grail. number of Americans with some form ployees would face increases in pre- Theodore Roosevelt’s “Bull Moose” of health insurance increased dramat- miums, while insurance would be less Progressive Party made national health ically. In the 1960s, unions made expensive for 4.6 million. Meanwhile, insurance, modeled on workmen’s com- health benefits a key demand in col- only 330,000 of the uninsured would pensation, a main plank in its party lective-bargaining negotiations. Many gain coverage, the CBO said. platform in 1912. One of the most experts believed that because so many But a public-policy research firm, sweeping health-reform attempts ever workers now could visit the doctor CONSAD, estimates that the measure advanced by a presidential candidate, without ever seeing a bill, health in- would extend benefits to 4.5 million it called for employers, employees and surance actually drove up demand for workers at affordable rates. According society at large to pay for safeguard- medical services. to former Rep. Jim Talent, R-Mo., small ing Americans “through insurance” from Perhaps because of the growing businesses could save 10-20 percent “the hazards of sickness, accident, in- popularity of health insurance, Tru- in health-care costs. validism, involuntary unemployment man’s idea of insuring Social Security The key, Talent said, lies in break- and old age.” 48 beneficiaries persisted. In 1965, Presi- ing the grip of the Blue Cross mo- Like every major plan to follow, it dent Lyndon B. Johnson signed legis- nopolies — and conventional wisdom. went nowhere. And yet certain ideas lation launching Medicare in a cere- “Nobody questions that big business- were set in motion. By 1917, model mony held, as a tribute, in Truman’s es can offer comprehensive plans,” health-insurance bills began popping hometown of Independence, Mo. It Talent said. “But for some reason, they up in state legislatures, and in 1929 the was the cornerstone of Johnson’s so- seem to distrust small businesses.” forerunner of Blue Cross emerged, es- called Great Society program to end tablishing the pattern: Major proposal, poverty. major defeat, small steps forward. Johnson also signed Medicaid into BACKGROUND After Social Security was created in 1935, supporters began urging a sec- ond step — a national health-insur- ance system. law, providing health benefits for low- income pregnant women and chil- dren, disabled Americans and low-in- come elderly needing long-term care. In 1945, President Harry S. Truman “No longer will older Americans be sought to include universal health in- denied the healing miracle of modern Recurring Quest surance with Social Security, noting medicine,” Johnson said. “No longer that “in a nation as rich as ours, it is will illness crush and destroy the sav- T he quest for guaranteed health care is an old one. Reformers have sought major changes five times dur- a shocking fact that tens of millions lack adequate medical care.” 49 In a stirring speech four years later, ings they have so carefully put away over a lifetime.” 52 President Richard M. Nixon briefly ing the last century, and at astonish- he again declared his commitment: “We revived the idea of universal health in- ingly regular intervals. From the sweep- need — and we must have without surance when he proposed making com- ing pronouncements of Theodore further delay — a system of prepaid prehensive, high-quality health care “with- Roosevelt at the dawn of the Progres- medical insurance which will enable in the reach of every American.” In his sive Era to President Clinton’s founder- every American to afford good med- 1974 State of the Union address, he sug- ing attempts led by first lady Hillary in ical care.” 50 gested expanding Medicaid and Medicare 532 CQ Researcher Universal Health Insurance Not a Cure-All M inorities and the poor — the largest group of unin- an average six years longer than non-whites. Even when ad- sured Americans — suffer disproportionately from justing for differences in income, one-third of the difference in health problems. But would guaranteed coverage make the mortality rate remains. 8 everything better? Several factors tend to offset the potentially positive impact The short answer: No. of free insurance on a person’s health, including low literacy According to a little-noticed finding in a recent Institute of skills, which make it harder to either understand a doctor’s in- Medicine report: “Health insurance by itself will not eliminate structions or choose between treatments. A person’s health be- ethnic and socioeconomic disparities in health.” 1 The conclu- liefs, lifestyle practices and environmental influences can also sion is based on a University of California at San Francisco affect his health. 9 People who are less educated may be less analysis of research spanning 16 years. capable of communicating with a doctor, understand possible “While health insurance may alleviate financial barriers to risks, appreciate the significance of symptoms, schedule an ap- care and improve the choice of providers,” the analysis said, pointment or manage their conditions. 10 “it does not address other individual and societal determinants The prejudices of medical professionals, cross-cultural com- of poor health experienced by ethnic minorities and the dis- munication failures and overt discrimination also may play a advantaged.” 2 role, experts say. Other studies suggest an association between In short, the authors cautioned, the United States “should not poor health and crowded neighborhoods, exposure to stress- be content to focus only on insurance [to correct] social dispar- ful life events and the inability to take time off from work to ities in health.” Scandinavia, Japan and the United Kingdom, for see a doctor. example, have failed to erase socioeconomic differences despite Said Harold Freeman, president of the Ralph Lauren Can- their well-established systems of universal health coverage. 3 cer Center at New York City’s North General Hospital and for Less affluent persons might use a free health system more three decades a surgeon in Harlem: “Giving everyone an in- often, but that hardly guarantees the health outcomes enjoyed surance card won’t solve health disparities.” 11 by the better off. For instance, a study of death rates among English civil servants — all covered by health insurance — de- 1 Committee on the Consequences of Uninsurance, Institute of Medicine, termined that unskilled laborers and clerical staff had the great- “Care Without Coverage: Too Little, Too Late,” May 2002. Copies also avail- able at www.nap.edu. est risk of dying within 10 years, while professionals and top 2 Jennifer S. Haas and Nancy E. Adler, “The Causes of Vulnerability: Dis- administrators could be expected to live longer. 4 entangling the Effects of Race, Socioeconomic Status and Insurance Cover- In the United States, many assume that disadvantaged mi- age on Health,” Institute of Medicine, October 2001. 3 A.E. Kunst and J.P. Machenbach, “The Size of Mortality Differences As- norities would substantially benefit from equal access to med- sociated with Educational Level in Nine Industrialized Countries,” American ical practitioners, prevention and treatment. After all, racial and Journal of Public Health, June 1994, pp. 932-937. ethnic minorities with incomes below the federal poverty level 4 M.G. Marmot, M.J. Shipley and G. Rose, “Inequalities in Death: Specific represent a substantial proportion of the uninsured. Hispanics Explanations of a General Pattern?” Lancet, May 1984, pp. 1003-1006. 5 Institute of Medicine, “Coverage Matters: Insurance and Health Care,” 2001. are three times more likely than whites to lack health insur- See also J. Rhodes and M. Chu, “Health Insurance Status of the Civilian ance, and African-Americans twice as likely. 5 Indeed, some re- Non-Institutionalized Population: 1999,” Agency for Healthcare Research and searchers suggest that racial and ethnic differences in health Policy, 2000. 6 Paul D. Sorlie et al., “Mortality in the Uninsured Compared with that in are due mostly to differences in socioeconomic status. 6 Persons with Public and Private Health Insurance,” Archives of Internal Med- Yet the University of California team showed that better care icine, November 1994, pp. 2409-2416. frequently failed to improve the health of minorities, the poor 7 The study, known as the “Rand Health Insurance Experiment,” is by R.H. or the lesser educated. A study of 5,986 men, women and chil- Brook et al.., “Quality of Ambulatory Care: Epidemiology and Comparison by Insurance Status and Income,” Medical Care, May 1990, pp. 392-433. dren with one of 17 chronic illnesses, all receiving free care 8 Jan E. Mutchler and Jeffrey A. Burr, “Racial Differences in Health and Health or sharing in the cost, found that the poor were less likely to Care Service Utilization in Later Life: The Effect of Socioeconomic Status,” receive “appropriate” care than their better-off counterparts. 7 Journal of Health and Social Behavior, December 1991, pp. 342-356. 9 Haas and Adler, op. cit., p. 26. Other studies suggest that the rates of receiving hospital- 10 S.K. Behera and Marilyn Winkleby, “Low Awareness of Cardiovascular ization and preventive care from health professionals depend Disease Risk Among Low-Income African-American Women,” American Jour- not solely on whether people have insurance but also on race nal of Health Promotion, May/June 2000, pp. 301-305. and ethnicity. Insurance also could narrow but not close the 11 Quoted in Gabriele Amersbach, “Through the Lens of Race: Unequal substantial gaps between the races in mortality — whites live Health Care in America,” Harvard Public Health Review, winter 2002. to provide health insurance “to millions be doomed by the Watergate scandal tention. Nixon and another Republi- of Americans who cannot now obtain that engulfed his presidency. can president embraced HMOs as a it or afford it.” 53 His proposal got se- Meanwhile, skyrocketing hospital way to control costs. In 1973, Nixon rious attention in Congress — only to costs had caught the government’s at- signed the Health Maintenance Or- CQ on the Web: www.cqpress.com June 14, 2002 533 COVERING THE UNINSURED ganization Act, requiring businesses aged competition, which would have with more than 25 employees to offer at least one HMO as an alternative failed to guarantee coverage to many Americans. Republicans, meanwhile, CURRENT to conventional insurance. Then, in 1982, President Ronald Reagan gave Medicare patients the option of sign- preferred compelling every American to buy insurance, using government dollars only to help the poor. SITUATION ing up for an HMO. Managed-care Congressional Republicans accused organizations composed of loose net- Clinton of trying to establish yet an- works of doctors began to prolifer- other inefficient, expensive and un- Drugs for the Elderly ate, and by 1995, nearly three-quar- caring big-government bureaucracy. ters of covered workers were insured Hillary Clinton, too, attracted criticism, by an HMO. 54 in part for her secretive management style. A single, compelling television ad, part of a $17 million campaign by E ven before the distractions of na- tional security, an economic slow- down and the deficits in federal and Clinton Debacle the Health Insurance Association of state budgets, few expected much to America, also helped torpedo the plan. happen on the health-care front this year. Its simple message — in which a fic- The Clinton administration’s blister- S uddenly, in 1991, health care resurfaced as a potent political force. Harris Wofford, an upstart De- titious couple, Harry and Louise, tried to make sense of the 1,342 pages of details — preyed on public anxieties. ing defeat fragmented and polarized Washington over the subject of health- care reform. With Congress so close- mocratic Senate candidate from Penn- Would people still be able to choose ly divided, only isolated, dike-plug- sylvania, declared: “If a criminal has their own doctors? Could employers ging initiatives can survive, and action a right to a lawyer, working Ameri- afford to cover workers? Would health- is more likely through the private in- cans have a right to a doctor.” His care decisions be left up to govern- surance sector. Meanwhile, the num- message had such appeal that he re- ment bureaucrats? bers of uninsured undoubtedly will soundingly defeated a popular two- Yet some of Clinton’s ideas have continue rising along with costs. time governor. been adopted by managed-care plans, A longstanding barrier to change is On the advice of Wofford’s advis- helping them achieve some efficien- the sheer clout of several players with er, James Carville, then-Gov. Clinton cies and savings. 56 Enrollment ex- a lot to win or lose. As commentator appropriated Wofford’s thunder, riding ploded between 1986 and 1995, from Robert G. Evans, a University of British the health-care theme to the Democ- nearly 26 million to 58 million, ac- Columbia economics professor, has ratic nomination in 1992. In his ac- cording to the American Association pointed out, the U.S. health-care sys- ceptance speech, Clinton vowed to of Health Plans — yet people grew tem is “inequitable, inefficient, un- “take on the health-care profiteers and disenchanted with having to change popular and spectacularly expensive make health care affordable for every doctors, being refused services and — but enormously profitable for some family.” losing access to specialists. Americans.” 58 In 1993, Clinton unveiled his “Health Managed care’s unpopularity led to The health-care industry, its profits Security Act,” a plan largely crafted the “patients’ bill of rights” legislation severely diminished from the boom under the direction of Mrs. Clinton. passed by the House last August, which years of the 1990s, zealously guards Employers would pay 80 percent of would allow patients to sue their HMOs, its turf against any threat to the sta- the premiums to insure all workers, but on a limited basis. tus quo. Health professionals so far while the government subsidized cov- Deep-rooted ambivalence underlies have contributed nearly $58 million to erage for everyone else. Clinton said America’s stance on health care. It is the 2000 and 2002 presidential and he wanted “to reform the costliest and viewed as a social good, but also a congressional political campaigns, and most wasteful system on the face of market commodity. Americans seem the pharmaceutical industry has do- the Earth.” 55 to consider it a basic need to which nated another $37 million. 59 Yet the president’s own party frac- everyone is entitled, but also some- Another barrier to change is cost. tured badly. Some Democrats proposed thing to be earned that should be sub- Late last year, for example, while de- a “single-payer” government system, ject to free-market forces. One com- bating legislation to stimulate the similar to Canada’s, which would pay mentator has described the conflict in economy, Congress avoided any dis- private health-care providers. Others health care as the “struggle for the cussion of extending coverage to all sought a scaled-down version of man- soul of health insurance.” 57 Americans, focusing instead on the 534 CQ Researcher less expensive option of providing cov- erage to those who lose their health Fewer Small Employers Offer Coverage insurance after losing their jobs. The percentage of small businesses offering health insurance But even that debate exposed an declined after 2000, leaving 35 percent of the workers without underlying fault line almost certain to keep Washington in gridlock. Democ- employer-sponsored health insurance. Nearly all employers with 200 rats sought subsidies to help the newly or more workers offer health benefits. unemployed keep their insurance or to cover them in the Medicaid program. Percentage of Employers Offering Health Benefits, 1998-2001 Republicans favored giving the newly (Among Firms with 3-199 Workers) uninsured tax credits to help them buy Percentage 80 insurance. The same philosophical de- 70 bate underlies current sparring. 67% 60 65% This year, at least one major health- 60% care issue — the cost of prescription 50 54% drugs for the elderly — appears to be 40 emerging at the top of the political 30 agenda. With both the House and Sen- 20 ate narrowly divided, the balance of power in Washington could rest in the 10 hands of older Americans, who typi- 0 cally play a disproportionate role at 1998 1999 2000 2001 the polls in midterm elections. Winning seven more seats would Source: Kaiser/Health Research and Educational Trust Survey of Employer-Sponsored give the Democrats control of the Health Benefits, Jan. 23, 2002 House; just one seat in the Senate would give Republicans control there. The Democrats, meanwhile, released And though the issue certainly isn’t a video attacking a promise Bush Tax Credits new, the volume at which it is being made during the 2000 campaign to debated is a new wrinkle. Equally in- tense is the determination of skirmishing party leaders to pass a measure this “help all people with prescription drugs.” Notes the ad: “By his own es- timate, Bush leaves out more than P resident Bush proposes to help the uninsured buy private health policies by offering tax credits — $1,000 year — or blame the opposition for two-thirds of seniors in need of pre- for adults and $2,000 for families — the failure to accomplish anything. scription-drug coverage.” costing a total of $89 billion. But only “No senior should be forced to choose A Republican campaign memo hint- individuals with incomes below $30,000 between putting food on the table or ed at the reason for all the fuss: “Re- or families with incomes below $60,000 paying the rent or buying the medi- publicans passing a prescription-drug would be eligible. “Too many work- cines they need,” declared House Speak- benefit would go a long way to leav- ers get no coverage at all with their er J. Dennis Hastert, R-Ill., in May as ing Democrats with very little on the jobs,” the president said. Americans he unveiled the Republicans’ $350 bil- table to try to use against us” in the should receive “the help they need lion proposal to add a prescription drug midterm elections. 60 when they need it.” 61 benefit to Medicare. The same day, Sen- Despite such traditional divisions, Economists at the University of Penn- ate Democrats unveiled their proposal, some compromise appears in the wind, sylvania and Yale University say Bush’s with a price tag of $400 billion to $500 given the coalescence of the once-ad- plan could reduce the number of unin- billion. Other House Democrats and versarial special interests into the Cov- sured by about 8 million. The ad- Senate moderates are working on al- ering the Uninsured coalition. The ministration estimates that it would help ternatives, and President Bush has his group, which includes older Ameri- 6 million uninsured people buy health own 10-year, $190 billion version. cans, doctors, insurance carriers and insurance each year, but the amount A group supported by the drug in- hospitals as well as consumer and labor of the tax credit and its reach are dustry, the United Seniors Association, groups, is waging a huge media cam- widely viewed as inadequate. 62 launched a $3 million advertising cam- paign urging an immediate solution to “It’s like throwing a 10-foot rope to paign supporting House Republicans. the problem of the uninsured. someone at the bottom of a 40-foot CQ on the Web: www.cqpress.com June 14, 2002 535 COVERING THE UNINSURED hole,” says Pollack of Families USA. For the safety net just when the uninsured major trends — rising costs, increas- instance, a healthy, non-smoking 55- need it most. ing unemployment, cash-strapped year-old woman living at the federal In Illinois, for example, a “welfare- governments and a wave of aging Baby poverty level — less than $8,860 in in- to-work” initiative during the late Boomers demanding care. come — would still have to spend $4,000 1990s added 100,000 women to Med- Joel Miller, policy director for the Na- to buy health insurance, he points out. icaid — yet by the end of 2001 Re- tional Coalition on Health Care, calls it Moreover, some opponents worry publican Gov. George Ryan felt com- a potential “perfect storm” of econom- that the president’s proposal could un- pelled to eliminate it. The action ic factors. “We are witnessing an un- ravel the current employer-based sys- netted $17 million in savings and sent precedented set of forces that have con- tem, which, in effect, indirectly uses many of the women — who work in verged, which will form what we believe premiums of the relatively healthy to low-paying jobs that lack benefits — will be the mother of all economic cross-subsidize those needing more care. back to the ranks of the uninsured. storms as it relates to health care.” 65 However, even the most generous “Governors are dealing with un- Spiraling costs likely will be the expansion of prescription-drug bene- precedented fiscal pressure,” said Ray- biggest culprit. Over the next decade, fits for the elderly or tax credits for mond C. Scheppach, executive director health-care spending is expected to select populations would not tackle of the National Governors’ Association. continue rising faster than the nation’s the larger problems of rising costs and “The growth rate is simply unsustain- gross domestic product. 66 Premiums America’s uninsured. Nor will they able.” With Medicaid at a “breaking are expected to rise at least 50 per- make up for ground being lost every point,” states need more than money cent over the next five years. If the day, as governments drastically scale from Washington. “Absent serious struc- sluggish economy persists, employers back the existing social net. tural changes to the program down the will cover fewer workers or demand road, states will be unable to meet the that workers pay an even greater share needs of recipients.” 63 of their premiums. 67 More than half Even in better economic times, the of all employers plan to require work- Shrinking Safety Net safety net misses many. Millions of ers to pay more for insurance, ac- low-income people who are eligible cording to a survey by Watson Wyatt W ith dwindling discretionary re- serves in the federal budget, money for Medicaid and CHIP has van- are not enrolled in government pro- grams. Welfare reform, otherwise known as the Professional Responsi- Worldwide. 68 Others may cut salaries or jobs. “If health-care premiums continue to ex- ished, and many private doctors are bility and Work Opportunity Recon- plode at their current [rate], employers refusing to accept new Medicare pa- ciliation Act of 1996, successfully moved [will] agonize over which to pay — pre- tients, because Medicare HMOs are pay- people from cash assistance into jobs miums or salaries,” said James Klein, ing them less. Some Medicare patients — but often into jobs without health president of the American Benefits Coun- who can’t afford drugs are turning to coverage. Among women who have cil. At current rates, by 2007 health ben- the Veterans Affairs hospital system, been off welfare for more than a year, efits for an entry-level worker will cost where rising numbers of patients and only half have either Medicaid or pri- a company half the employee’s salary, pharmaceutical costs — which have vate coverage. The other half seek he points out. “This is a terrible predica- nearly doubled since 1996 — are over- care from strained safety-net institu- ment for both the worker and the em- whelming an already strained system. tions like faith-based charities. 64 ployer — and we see no help from Recession-crippled state budgets, Congress in solving this problem.” which partially finance and adminis- As a result, according to risk ana- ter Medicaid and CHIP, are running deficits and anticipate fewer revenues. States are tapping rainy-day funds, lay- ing off employees and making across- OUTLOOK lysts, by 2009, the number of uninsured Americans could increase to at least 48 million — and perhaps as many as 61 million — if the recession continues the-board cuts. The recession, the eco- and health-cost inflation is unabated. 69 nomic fallout from Sept. 11 and the Major Crisis? Medicaid spending, meanwhile, is explosion in Medicaid spending have expected to increase 25 percent over caused a $40 billion to $50 billion shortfall — the largest ever — in more than 40 states. Thus, legislatures are M any commentators believe the nation faces a health-care crisis of phenomenal proportions. They cite the next two years. “The states are dying on Medicaid,” said Greg Scan- dlen, a senior fellow at the National trimming services and making cuts in the coming convergence of several Continued on p. 538 536 CQ Researcher At Issue: Would tax credits for health insurance help the uninsured? TOM DONNELLY JR. RON POLLACK BOARD MEMBER, COALITION FOR AFFORDABLE EXECUTIVE DIRECTOR, FAMILIES USA HEALTH CARE COVERAGE WRITTEN FOR THE CQ RESEARCHER, JUNE 2002 WRITTEN FOR THE CQ RESEARCHER, JUNE 2002 r efundable tax credits can make a significant dent in the number of those without health insurance — if we can n early 40 million Americans — the equivalent of 23 states and the District of Columbia — have no health insurance today. Although President Bush agrees that yes no avoid the temptation to cripple the effectiveness of the the growing problem of the uninsured merits federal action, his marketplace with excessive regulations. solution is ineffective and potentially dangerous. The administra- Data suggest that tax credits are a promising solution to tion proposes to offer tax credits — up to $1,000 for individuals the majority of 40 million uninsured Americans. The require- with incomes below $15,000, and up to $3,000 for families with ment for such effectiveness is based on allowing it to be used incomes below $25,000 — to help people purchase health cov- both for employer-based group coverage and in the individual erage on their own. This will not make health coverage afford- market. If these simple conditions are met, even a credit of able for uninsured, low-wage, working families. The Bush ad- modest size will create a significant benefit. ministration’s tax-credit proposal is like throwing a 10-foot rope Although there are many segments of the uninsured popu- to a person in a 40-foot hole. It simply fails to make health lation, the Census Bureau data report that 87 percent of the coverage affordable. uninsured population is under age 45. Every credible study Families USA recently conducted a 50-state survey to assess suggests that less than 5 percent of the uninsured population the affordability of health coverage for healthy, non-smoking — perhaps closer to 1 percent — is chronically “uninsurable” 55- and 25-year-old women. For 55-year-olds, the average an- due to a health condition. nual premium of a standard health policy (comparable to the Though smaller, these exceptional populations are no less most popular health plan available for federal employees) was significant, and policymakers should invest substantially in $4,934 — unaffordable for people with less than $15,000 in ideas such as high-risk pools to provide a safety net for such income, even with a $1,000 tax credit. In 47 out of 50 states, individuals. Doing so will stabilize the health insurance market there is no insurance policy — not even a bare-bones policy for all other participants. But opposing tax credits only be- — for a 55-year-old woman at a $1,000 premium. cause they don’t reach every exceptional population paralyzes Even for healthy, non-smoking 25-year-old women, the tax progress on the overall issue. Are the 25 million predominant- credit falls short. The average cost of a standard policy for ly healthy “working uninsured” who could benefit from the such a young woman is $2,459; in 19 states, there are no proposal not worthy of assistance? $1,000 policies available. In the states that do have $1,000 The tax-credit proposal of $1,000 for individuals and $3,000 bare-bones policies, the coverage is like Swiss cheese, with for families provides important financial assistance to individu- more holes than cheese. Those plans usually fail to cover als to purchase coverage. In addition to other studies with doctors’ visits, prescription drugs and maternity care. similar conclusions, a recent survey by eHealthInsurance of By looking at the options available to only healthy, non- 20,000 individual policies reported an average premium of smoking women, the data reflect the best-case scenarios in $1,900 is available for individuals in states representing 93 per- the individual market. People with even the slightest health cent of the U.S. population. This affordability, however, is problems, such as allergies, face the risk of higher premiums, crippled in states where regulations have stymied the market- coverage exclusions and possible rejection by insurance com- place and driven up the cost of premiums. The policies re- panies. Individual tax credits leave people at the mercy of ported on by eHealthInsurance indicate 87 percent would be health insurance companies that have the ability to deny them considered “comprehensive” and that more than two-thirds of coverage. those have a deductible of $1,000 or less. The tax-credit proposal makes little sense as a way to ex- If the goal is to reduce the unacceptable number of 40 pand health coverage to the uninsured, and the individual million uninsured Americans, let’s start with what will work market is not the answer for most uninsured people. Instead, for many while never ignoring those that are most needy. It we should build on existing programs that work well — such is simply irresponsible to wait to do anything until we can as Medicaid and the employer-provided health system — to “do everything for everyone” — that day simply won’t come. expand health coverage for low-wage, working families. CQ on the Web: www.cqpress.com June 14, 2002 537 COVERING THE UNINSURED Continued from p. 536 trying to put a Band-Aid on different Center for Health Policy Analysis, a Election Politics parts of the system.” Dallas think tank. “Revenues are “As long as hospitals can over- down. Expenses are up.” 70 Making matters worse, Medicare could be over- whelmed starting in 2011 by the need A s in 1992, anxieties of the middle class may prove decisive. Rising unemployment and the growing aware- charge you and me to pay for the uninsured, and as long as politicians can get away with ignoring their re- to provide benefits to retiring Baby ness that anyone could lose their health sponsibility, nothing will happen,” Boomers. Medicare’s ranks will swell insurance “could move us toward the says the Carlyle Group’s Abramowitz. from nearly 40 million to 77 million tipping point,” said Gail Shearer, direc- “Democracies work best in crises, and by 2030. Up to half of them will be tor of health-policy analysis for Con- it will take the perception of a crisis over age 84. 71 sumers Union. “Congress is going to for politicians to act.” Baby Boomers are expected to live have to pay more attention.” 76 But Arthur Kellerman says the cri- longer than their parents’ generation, The reshuffling of traditional align- sis is already here — at least as far straining the system’s ability to provide ments that spawned the Covering the as the nation’s already-crowded emer- care for the so-called “old old,” gener- Uninsured coalition may get Congress’ gency rooms are concerned. ally the sickest and costliest group. Even attention. Significant progress is “more “I’m dumbfounded that no one in as President Bush argued to add a pre- likely than ever” on such issues as ex- Washington — not the president and scription-drug benefit this year, the ad- panding Medicaid and CHIP eligibili- no one in Congress — seems to be ministration acknowledged that Medicare ty and adding financial incentives concerned about it, particularly since is “not financially secure” for the re- within the tax system for private cov- Sept. 11,” says Kellerman, chairman of tirement of the Baby Boomers. 72 erage, says the Health Insurance As- the Department of Medicine at the Emory “Most people don’t realize the effect sociation’s Young. School of Medicine and co-chair of the that a rapidly increasing elderly popu- Even if the changes were made, Institute of Medicine’s Committee on the lation and skyrocketing health-care however, Young expects competing Uninsured. “How are we going to deal costs will have on the aging of Amer- needs and budget shortfalls over the with 200, 2,000, 209,000 casualties? icans between now and 2050,” said next 10 years to prevent the number “Yet nobody’s listening,” he con- Duke’s Koenig. Indeed, Sun Belt states of uninsured Americans from declin- tinues. “In Washington it’s all about are already getting a taste of things to ing by much. Kahn of the Federation prescription drugs for seniors — rather come. “We are already experiencing the of American Hospitals is even less op- than the immediate threat to the health coming health-care crisis,” said Florida timistic. “If trends continue, you could and safety of every man, woman and Secretary of Health Robert Brooks. 73 lose ground every year,” with a few child in this country, regardless of The situation could get so bad, pre- million more joining the ranks of the health insurance and their status.” dicts Edward Schneider, a professor of uninsured, he says. gerontology at the University of South- Election-year campaigns by main- ern California School of Medicine, that stream groups may have an impact. On future hospitals could be reserved only the campaign trail, voters are pressing Notes for those in intensive care, with nurs- politicians for promises, and business ing homes handling acute care. Nei- groups are demanding action. Citizens 1 Dawes’ plight is described in Trish Wilson, ther government nor the private sec- and businesses alike “are really starting “Kids’ Insurance Needs CPR,” News and Ob- tor will be able to accommodate to get fed up with the costs,” said Laura server, March 9, 2001, and Karen Tumulty, ever-larger numbers of poor and frail Pemberton, a lobbyist for the National “Health Care Has a Relapse,” Time, March older Americans, according to Schnei- Federation of Independent Business. 11, 2002, p. 42. 2 World Health Organization, “World Health der’s bleak scenario. People on long Kate Sullivan, director of health-care waiting lists will flock to organizations policy at the U.S. Chamber of Com- Report,” 2000. 3 “Health Insurance Coverage 2000,” U.S. affiliated with charities and churches. merce, says covering the uninsured will Census Bureau, Sept. 28, 2001. Rural residents will forgo medical at- be a major issue in the midterm con- 4 Terminated workers can continue the same tention altogether. 74 gressional elections this fall. “We will health coverage for 18 months under COBRA, The crisis of uninsurance eventual- make it an issue,” she says. the Consolidated Omnibus Budget Reconcili- ly may be “so pervasive that it is But many doubt Congress will de- ation Act of 1995, which became law in 1996. bound to re-emerge as a major na- vise long-term solutions. For now, says 5 See Elizabeth Simpson, “State Reaches Out tional issue,” The New England Jour- health economist Stephen Zuckerman to Uninsured,” Virginian-Pilot/Ledger Star, nal of Medicine predicted. 75 of the Urban Institute, “everyone is March 7, 2002. 538 CQ Researcher 6 Karen Davis, “Universal Coverage in the 18 “Care Without Coverage: Too Little Too ident, Healthcare Leadership Council, House United States: Lessons from Experience of Late,” Institute of Medicine, National Acade- Energy and Commerce Subcommittee on the 20th Century,” Journal of Urban Health: my of Sciences, May 2002. Health, Feb. 28, 2002. HLC members include Bulletin of the New York Academy of Medi- 19 Paul W. Newacheck, “Health Insurance Ac- CEOs of pharmaceutical companies and cine 78 (March 2001), p. 46-58. cess to Primary Care for Children,” The New major hospitals and clinics. 7 Census Bureau, op. cit. 34 California Medical Association figures, as England Journal of Medicine, May 15, 2000, 8 John Holahan and Johnny Kim, “Why Does pp. 513-519. of November 2001, cited by Norman Label, the Number of Uninsured Americans Con- 20 Quoted in Vicki Kemper, “Unlikely Coali- president, Emergency Physicians Medical tinue to Grow?” Health Affairs, July/August tion Declares Health Care Crisis,” Los Ange- Group, writing in the Sacramento, Calif., 2000, pp. 188-196. les Times, Feb. 13, 2002, p. A30. Business Journal, Feb. 1, 2002. 9 Census Bureau, op. cit. 21 North Carolina Health Access Coalition 35 “Emergency Crews Worry as Hospitals Say 10 Florida Chamber of Commerce Federation, newsletter, op. cit. ‘No Vacancy,’ ” The New York Times, Dec. Jan. 24, 2002. 22 The coalition also includes the American 17, 2000. See also “Trouble in the ER,” Na- 11 “Employer Health Benefits: 2001 Annual Medical Association, Service Employees Inter- tional Journal, May 19, 2001. 36 “Emergency Department Overload: A Grow- Survey,” Kaiser Family Foundation and national Union, Business Roundtable, Ameri- Health Research and Educational Trust, Sep- can Nurses Association, Health Insurance As- ing Crisis,” The Lewin Group for the Amer- tember 2001. sociation of America, Families USA, American ican Hospital Association, April 2002. 12 Jeanne Lambrew, “How the Slowing Econ- 37 Robert W. Derlet and John R. Richards, Hospital Association, Federation of American omy Threatens Employer-Based Health In- Hospitals, Catholic Health Association, AARP “Overcrowding in the nation’s emergency de- surance,” Commonwealth Fund, November and the Robert Wood Johnson Foundation. partments: Complex causes and disturbing 2001. Paul Fronstin, “Sources of Health In- 23 From a September 2001 survey for the In- effects,” Annals of Emergency Medicine, Jan- surance and Characteristics of the Uninsured: stitute for Legal Reform and the U.S. Cham- uary 2000, pp. 63-68. 38 Jan Blustein, “Drug Coverage and Drug Analysis of the March 2000 Current Popula- ber of Commerce. tion Survey,” Issue Brief No. 228, Employee 24 Speech at the Medical College of Wis- Purchases by Medicare Beneficiaries with Hy- Benefit Research Institute, 2000. consin in Milwaukee, Feb. 25, 2002. pertension,” Health Affairs, March/April 2000, 13 Press conference, Coalition to Cover the 25 For background, see Adriel Bettelheim, pp. 219-230. 39 J.A. Poisal and L. Murray, “Growing Dif- Uninsured, Washington, D.C., Feb. 12, 2002. “Drugmakers Under Siege,” The CQ Researcher, 14 Mary Agnes Carey, “Analysts See a Seis- Sept. 3, 1999, pp. 753-776, and Julie Rovn- ferences Between Medicare Beneficiaries mic Shift in Health Policy Debate,” CQ Week- er, “Prescription Drug Prices,” The CQ Re- With and Without Drug Coverage,” Health ly, March 23, 2002. searcher, July 17, 1992, pp. 597-620. Affairs, March/April 2001, pp. 74-85. 15 Ibid. 26 Tumulty, op. cit. 40 AARP Bulletin, March 2002. 16 In their biennial reports, the National Gov- 27 Jacob Hacker, “Health Care Reform: A Cen- 41 See J. Gabel et al, “Class and Benefits at ernors’ Association and National Association tury of Defeat,” Harvard Health Policy Re- the Workplace,” Health Affairs, May/June 1999, of State Budget Officers blamed the reces- view, fall 2000. pp. 144-150. 28 Carey, op. cit. 42 Small Business Administration, www.sba.gov/ sion, fallout from the Sept. 11 terrorist at- tacks and Medicaid cost increases for creat- 29 Quoted in David Wessel, “After a Few advo/stats/sbfaq.txt 43 Catherine Hoffman and Mary Pohl, Health ing a record $40 billion to $50 billion budget Years of Relaxation, Health-Care Costs Rise shortfall in more than 40 states in fiscal 2002. Again,” The Wall Street Journal, May 9, 2002. Insurance Coverage in America: 1999 Data Meanwhile, 28 states had combined deficits 30 Quoted in Bob Condor, “Look Beyond Pol- Update, Kaiser Commission on Medicaid and of $7.1 billion in their Medicaid budgets. itics Before Writing Off the Faith-Based Initia- the Uninsured, 2000. 17 A federal judge in March 2002 allowed 44 National Federation of Independent Busi- tive,” Chicago Tribune, March 18, 2001, p. C3. Maine to force pharmaceutical makers to pro- 31 For background, see Adriel Bettelheim, ness (nationwide data); for Florida, “Florida’s vide discounts of up to 25 percent for those “Hospitals’ Financial Woes,” The CQ Researcher, Small Businesses Struggle with Rapidly Ris- with incomes 300 percent of the poverty level. Aug. 13, 1999, pp. 689-704. ing Health Insurance Costs,” Florida Times- Under Maine’s law, the state would leverage 32 The amount depends largely on the breadth Union, April 8, 2002. 45 Letter to House of Representatives, March its buying clout — $210 million in Medicaid of benefits that would be offered, he says. drug purchases — to negotiate discounted 33 Cited in testimony by Mary R. Grealy, pres- 2001. prices for the 325,000 residents who lack health insurance and are not covered by Medicaid. If the drug makers refuse, the state could im- About the Author pose price caps in 2003. The industry is ap- pealing the decision in Pharmaceutical Re- Keith Epstein, Washington correspondent for The Tampa Tribune and Media search and Manufacturers of America v. General News Service, has written on a variety of health and technology Commissioner, Maine Department of Human topics for publications such as The Washington Post, The Philadelphia In- Services. The 1st U.S. Circuit Court of Appeals quirer, Post-Newsweek’s Techway magazine and The Discovery Channel’s in Boston is considering the earlier ruling by health Web site. U.S. District Judge D. Brock Hornby. CQ on the Web: www.cqpress.com June 14, 2002 539 COVERING THE UNINSURED 46 National Governors’ Association, position paper. www.nga.org. 47 Jacob S. Hacker and Theda Skocpol, “The FOR MORE INFORMATION New Politics of U.S. Health Policy,” Journal of Health Politics, Policy and Law, April 1997, American Medical Association, Public and Private Sector Advocacy Office, 1101 pp. 315-38. Vermont Ave., N.W., 12th Floor, Washington, DC 20005; (202) 789-7400; 48 See Nathan Miller, Theodore Roosevelt: A http://www.ama-assn.org. Provides information on the medical profession and health care and monitors legislation and regulations. (Headquarters in Chicago, Ill.) Life (1992). 49 State of the Union address, Jan. 5, 1945. 50 State of the Union address, Jan. 5, 1949. Covering the Uninsured, 1010 Wisconsin Ave., N.W., Suite 800, Washington, DC 20007; (202) 572.2928; www.coveringtheuninsured.org. A national campaign funded 51 See Niel M. Johnson, oral history for the by The Robert Wood Johnson Foundation and 12 major national organizations rep- Harry S. Truman Library, March 30, 1989. resenting business, labor, doctors, nurses, hospitals and health-care consumers to 52 From a speech at Truman’s home in In- find solutions to the problem of 39 million Americans without health insurance. dependence, Mo., July 30, 1965. 53 State of the Union address, Jan. 30, 1974. Families USA, 1334 G St., N.W., Suite 300, Washington, DC 20005; (202) 737-6340; 54 For background, see Sarah Glazer, “Man- www.familiesusa.org. Interests include health care and long-term care, Social Security, aged Care,” The CQ Researcher, April 12, Medicare and Medicaid; monitors legislation and regulations affecting the elderly. 1996, pp. 313-336. 55 Address to Joint Session of Congress, Sept. Federation of American Hospitals, 801 Pennsylvania Ave., N.W., Suite 245, Washington, DC 20004-2604; (202) 624-1500; www.americashospitals.com. Repre- 22, 1993. 56 Health Research and Educational Trust, op. sents investor-owned, for-profit hospitals, monitors legislation and regulations af- fecting Medicaid and Medicare. cit. Health-cost increases reached a low in 1996, but then began rising again. Average Health Insurance Association of America, 1201 F St., N.W., Suite 500, Wash- premiums increased nearly 5 percent in 1999, ington, DC 20004-1204; (202) 824-1600; www.hiaa.org. Promotes effective manage- more than 8 percent in 2000 and 11 percent ment of health-care expenditures, provides statistical information on health-insur- from mid-2000 to mid-2001. ance issues and monitors legislation and regulations. 57 Deborah Stone, “The Struggle for the Soul of Health Insurance,” Journal of Health Pol- U.S. Chamber of Commerce, 1615 H St., N.W., Washington, DC 20062-2000; itics, Policy and Law (1993), pp. 287-317. See (202) 659-6000; www.uschamber.com. Develops policy on legislative issues impor- also Rosemary Stevens, In Sickness and in tant to American business, including covering the uninsured. Wealth: America’s Hospitals in the Twentieth Century (1989). 66 Stephen Heffler, “Health Spending Growth 70 Quoted in Robert Dodge, “Fiscal Ills Hurt- 58 Robert G. Evans, “Sharing the Burden, Con- Up in 1999: Faster Growth Expected in the ing Medicaid,” Dallas Morning News, May 15, taining the Cost: Fundamental Conflicts in Health Future,” Health Affairs, March/April 2001, pp. 2002, p. 1A. The White House Budget Of- Care Finance,” in Theodore J. Litman and Leonard 193-213. fice estimates that Medicaid costs will rise 10 S. Robins, Health Politics and Policy (1997). 67 From testimony by Kathryn G. Allen, di- percent in 2002, and nearly 7 percent an- 59 Center for Responsive Politics, April 2002. rector of Health Care, Medicaid and Private nually through 2007 to $173 billion — more 60 Quoted in The Associated Press, May 9, 2002. Health Insurance Issues, General Accounting than triple the anticipated inflation rate. Al- 61 From remarks Feb. 11, 2002, at Medical Office, before Senate Finance Committee, together, federal and state governments are College of Wisconsin in Milwaukee. March 13, 2001, p. 8 expected to spend more than $250 billion 62 Some 25 percent of the uninsured would 68 “New Rules for Managing Health Costs: on Medicaid this year. have enough money to obtain the policy they Highlights from the Seventh Annual Wash- 71 Jennifer O’Sullivan, Hinda Ripps Chaikind, need, and another 25 percent would be able ington Business Group on Health/Watson and Sibyl Tilson, “Medicare Structural Reform: to buy policies by adding up to $169 a year Wyatt Survey,” May 15, 2002. Background and Options,” Congressional Re- per person, according to Mark Pauly and David 69 The analysts at Georgia State University’s search Service, July 24, 2001, p. 20. Song, “Tax Credits, the Distribution of Subsi- Center for Risk Management and Insurance 72 For background, see Mary H. Cooper, “Re- dized Health Insurance Premiums, and the Unin- Research project the number of uninsured at tirement Security,” The CQ Researcher, May sured,” National Bureau of Economic Research, 48 million with economic growth and mod- 31, 2002, pp. 481-504. Working Paper No. 8457, September 2001. erate cost inflation; with a continued reces- 73 Condor, op. cit. 63 Comments made in releasing the associa- sion, 61 million; with rapid growth and cost 74 Edward L. Schneider, “Aging in the Third tion’s Fiscal Survey of States, May 16, 2002. inflation, 55 million. The rosiest assumptions Millennium,” Science, Feb. 5, 1999, pp. 796-797. 64 B. Garret and J. Holahan, “Health Insur- peg the uninsured at 34 million by 2005. 75 Steven A. Schroeder, “The medically unin- ance Coverage After Welfare,” Health Affairs, William S. Custer and Pat Ketsche, “The sured: will they always be with us?” The New 19(1), January/February 2000. Changing Sources of Health Insurance,” England Journal of Medicine, April 25, 1996; 65 Quoted in Helen Palmer, “Marketplace,” Health Insurance Association of America, pp. 1130-1133. Minnesota Public Radio, May 6, 2002. 2000. 76 Quoted in Carey, op. cit. 540 CQ Researcher Bibliography Selected Sources Books uninsured and suggests improvments in health-care access. Andersen, Ronald, Thomas H. Rice and Gerald F. Komin- Tumulty, Karen, “Health Care Has a Relapse,” Time, March ski, Changing the U.S. Health Care System: Key Issues in 11, 2002, pp. 42-45. Health Services, Policy and Management, Jossey-Bass, 2001. This survey of the troubled health-care policy landscape Three public health experts have assembled a wide-rang- and its real-world impact relates the experiences of several ing collection of essays on pressing policy issues from ac- individuals with insurance difficulties. cess and costs to Medicare reform. Wielawski, I., “Gouging the Medically Uninsured: A Tale Litman, Theodore J., and Leonard S. Robins, Health Pol- of Two Bills,” Health Affairs, September/October 2000; itics and Policy, Delmar Publishers, 1997. Vol. 19, pp. 80-85. Litman, a medical sociologist, and Robins, a professor of A former health-care reporter for the Los Angeles Times public administration at Roosevelt University in Chicago, de- draws an intensely personal portrait of the insured and unin- scribe the struggle to determine the proper role of govern- sured, who, she discovers, must pay substantially more for ment in developing health policy. Chapters explore politics, the same medical treatment her son receives. economics and the interplay of health interest groups and public opinion. Reports and Studies Rovner, Julie, Health Care Policy and Politics, CQ Press, Institute of Medicine, “Coverage Matters: Insurance and 1999. Health Care,” National Academy of Sciences, 2001. A health-policy journalist profiles government agencies, med- A special committee produces a comprehensive, balanced ical advances, policy proposals, the evolution of Medicare assessment of the popular myths and underlying realities and Medicaid and children’s health initiatives. about the uninsured, including a demographic description of who they really are. Articles Kaiser Commission on Medicaid and the Uninsured, Bodenheimer, T. S., “Affordable Prescriptions for the El- “Uninsured in America: Key Facts,” The Henry J. Kaiser derly,” Journal of the American Medical Association, Family Foundation, March 2000. Oct. 10, 2001; Vol. 286; p. 1762. A special commission examines who the uninsured are, This commentary by a professor of family and community why their numbers continue to grow and the consequences medicine at the University of California at San Francisco as- of lacking health coverage. sesses recent studies indicating how lack of prescription-drug coverage for Medicare beneficiaries results in less use of vital Economic and Social Research Institute, “Community- medication and increases the odds of hospitalization or place- Based Health Plans for the Uninsured: Expanding Ac- ment in nursing homes. cess, Enhancing Dignity,” W.K. Kellogg Foundation, No- vember 2001. Khan, C. N., and R. F. Pollack, “Building a Consensus A nonprofit research organization finds lessons for policy- for Expanding Health Coverage,” Health Affairs, Janu- makers in attempts by Bernalillo County, N.M., El Paso Coun- ary/February 2001; Vol. 20, pp. 40-48. ty, Texas, and four other communities to cope for them- The authors — traditional foes in the health-care debates selves by relying on a variety of innovations. — argue that extending coverage is not impossible, if only stakeholders can find common ground. Their prescription: a Lambrew, Jeanne, “How the Slowing Economy Threat- balance between public and private-sector approaches, and ens Employer-Based Health Insurance,” The Common- building on what works. Khan is president of the Federa- wealth Fund, November 2001. tion of American Hospitals; Pollack is executive director of A former health-policy analyst at the White House Nation- Families USA. al Economic Council assesses the impact of financial condi- tions on private coverage. Saha, Somnath, “The Mirage of Available Health Care for the Uninsured,” Journal of General Internal Medicine, Frogue, James, and Robert E. Moffit, “Issues 2000: The October 2001; Vol. 16, pp. 714-716. Candidate’s Briefing Book, Health Care,” The Heritage An assistant professor of medicine at Oregon Health and Foundation, 2000. Science University analyzes fallacies in perceptions about the A conservative organization assesses health-care policy. CQ on the Web: www.cqpress.com June 14, 2002 541 The Next Step: Uninsured Americans Yardley, Jim, “A City Struggles to Provide Health Care Pledged by U.S.” The New York Times, Aug. 7, 2001, p. “Health Care for Young, Pregnant Women,” The Wash- A1. ington Post, Feb. 15, 2002, p. A32. The medical-care infrastructure in Texas is not ready for Controversy surrounding the abortion issue has made it the torrent of new patients brought in by the Children’s more difficult to lower the age of eligibility for the Chil- Health Insurance Program, and it may never be. dren’s Health Insurance Program. Medicare and Medicaid Branigin, William, “Va. Audit Decries Loss of Child Health Funds,” The Washington Post, Dec. 12, 2001, p. Fine, Lisa, “Medicaid Money Goes Untapped by Many B1. Schools,” Education Week, May 8, 2002, p. 1. Virginia state officials claim a new children’s health insur- Schools are not using more than a billion dollars a year ance program is a compromise that neglects the medical in Medicaid reimbursements for providing medical services needs of some children. to students from low-income families. Brownstein, Ronald, “CHIP Could Be the Patch Bush Freudenheim, Milt, “Personal Costs for Medicare HMOs Needs to Repair the Health Care Safety Net,” Los Ange- Rise,” The New York Times, Feb. 14, 2002, p. A24. les Times, March 19, 2001, p. A5. Researchers report that elderly members of Medicare HMOs On Capitol Hill, legislators testified to the success of the Chil- used nearly 50 percent more of their own money for med- dren’s Health Insurance Program — passed in 1997 to guar- ical care in 2001 than they did three years ago. antee health coverage to children in working-poor families. Greene, Kelly, “Many Seniors Aren’t Capitalizing On Connolly, Ceci, “Health Coverage for Kids Low-Cost But Benefits From U.S. and States,” The Wall Street Journal, Little Used; Millions Eligible for Subsidized Plans Not April 2, 2002, p. A2. Enrolled,” The Washington Post, June 1, 2001, p. A3. Seventeen percent of seniors qualified for — but weren’t By late last year, fewer than 2 million of the 10 million receiving — Medicaid benefits, and 7 percent could get Sup- uninsured children in America had been registered for the plemental Security Income if they applied for it. Children’s Health Insurance Program. Parker, Laura, “West Virginia Fights Law That Makes Jones, Charisse, “Cuts Threaten Kids’ Medical Care,” USA Heirs Sell Homes to Pay Off Medicaid Bill,” USA Today, Today, April 1, 2002, p. A3. May 1, 2002, p. A1. States are cutting back on the Children’s Health Insurance West Virginia is trying to kill an obscure federal law known Program to balance their budgets, raising fear that tens of as the Estate Recovery Act, which is just a small part of the thousands of children will suffer. voluminous Medicaid Act. Levine, Susan, “Getting the Word Out on Insurance; Thou- Pear, Robert, “Many Doctors Shun Patients With sands More Md. Children Now Have Health Coverage,” Medicare,” The New York Times, March 17, 2002, p. A1. The Washington Post, Jan. 3, 2002, p. T8. Significant numbers of doctors are refusing to take new A Maryland initiative to bring medical insurance to chil- Medicare patients, saying the government now pays too lit- dren grew out of a 1997 federal push authorizing the Chil- tle to cover the costs of caring for the elderly. dren’s Health Insurance Program. Pear, Robert, “Many on Medicaid Lack Drugs, Study Salter, Stephanie, “The Bushmen’s Concern for Kids,” Says,” The New York Times, April 9, 2002, p. A20. The San Francisco Chronicle, Feb. 6, 2002, p. A21. States have become so aggressive in controlling Medicaid Secretary of Health and Human Services Tommy Thomp- spending on prescription drugs that many recipients do not son bestowed personhood on “pre-born” beings by making get all the drugs they need. them eligible for medical care in the Children’s Health In- surance Program. Pear, Robert, “U.S. Begins Issuing Data on Individual Nursing Homes’ Quality of Care,” The New York Times, Tumulty, Karen, et al., “Health Care Has A Relapse,” April 25, 2002, p. 26. Time, March 11, 2002, p. 42. The Bush administration released data on the effectiveness Lawmakers in 13 states are cutting funding to the Chil- of Medicaid care at more than 2,500 nursing homes in six dren’s Health Insurance Program and that’s just one part of states as part of a project to evaluate the performance of the new health-care crisis in America. health-care services. 542 CQ Researcher Simmons, Melody, “U.S. Adults Live Longer — With Chron- People who buy their own health insurance would get ic Ills, Less Coverage,” The Washington Post, May 21, new tax breaks under Bush’s budget proposal. 2002, p. F1. According to health-care professionals, location plays an Universal Health Care integral role in access to Medicare, Medicaid and other health- care services. Belluck, Pam, “Small Vote for Universal Care is Seen as Carrying a lot of Weight,” The New York Times, Nov. 16, Tax Credits and Uninsured 2001, p. A14. Blue Cross and Blue Shield have spent hundreds of thou- Bumiller, Elisabeth, “Bush Urges $300 Billion for Health sands of dollars to try to defeat a universal health-care ref- Care Changes,” The New York Times, Feb. 12, 2002, p. A21. erendum in Maine. The Bush administration plans to expand medical savings accounts to help people pay doctors’ bills and offer tax cred- Gordon, Rachel, “Brown Offers Plan to Expand Health its for health coverage of the uninsured. Coverage,” The San Francisco Chronicle, May 8, 2001, p. A15. Connolly, Ceci, “Bush Health Plan Called Inadequate; San Francisco Mayor Willie Brown announced a proposal Credit of Little Use to Uninsured Most in Need of Help,” that would require employers who work with the city to The Washington Post, May 11, 2002, p. A4. provide health-care coverage for their workers. The tax credit President Bush hopes to give low-income workers to purchase health insurance would most help the Lelchuk, Ilene, “S.F. Children Could Get Free Health In- people who need it the least. surance,” The San Francisco Chronicle, Jan. 30, 2001, p. A15. Gleckman, Howard, “Who Should Get the Bill?” Busi- In San Francisco, a proposition to create universal health- ness Week, March 4, 2002, p. 64. care coverage for an estimated 158,000 to 205,000 uninsured President Bush plans to use refundable tax credits — ef- residents has met some resistance. fectively voucher-like cash payments — to help low- and middle-income families buy insurance. LeDuc, Daniel, “Md. Coalition Pushes Universal Health Care,” The Washington Post, Sept. 7, 2001, p. B4. Goldstein, Amy, “Budget’s Health Care Priorities De- Advocates of universal health-care coverage announced a tailed; Tax Credits, Subsidies Part of Eclectic Plan,” The plan to expand coverage for uninsured children and adults Washington Post, Jan. 21, 2002, p. A23. in Maryland financed by the state’s tobacco tax. The Bush administration laid out a strategy for trying to improve access to health care, proposing insurance tax cred- Reich, Robert B., “If Not Now, When, for Universal its and new freedom for states’ insurance programs. Health Care?” Los Angeles Times, April 2, 2001, p. B7. With 43 million Americans lacking health insurance, the Kristof, Kathy M., “Bush Tax Plan Would Assist Varied budget surplus should be used to implement a universal Groups,” Los Angeles Times, Feb. 5, 2002, p. C1. health-care system. CITING THE CQ RESEARCHER Sample formats for citing these reports in a bibliography include the ones listed below. Preferred styles and formats vary, so please check with your instructor or professor. MLA STYLE Koch, Kathy. “Truck Safety.” CQ Researcher 12 March 1999. CQ Electronic Library. Richland Coll. Lib., Dallas. 25 Jan. 2002 <http://library.cqpress.com>. APA STYLE Koch, K. (1999). Truck safety. CQ Researcher, 9, 209-32. CHICAGO STYLE Koch, Kathy. “Truck Safety.” CQ Researcher 9 (March 12, 1999): 209-232. CQ on the Web: www.cqpress.com June 14, 2002 543 Back Issues The CQ Researcher offers in-depth coverage of many key areas. Back issues are $10 for subscribers, $20 for non-subscribers. Quantity discounts available. Call (800) 638-1710 to order back issues. Or call for a free CQ Researcher Web trial! Online access provides: • Searchable archives dating back to 1991. • PDF files for downloading and printing. • Wider access through IP authentication. • Availability 48 hours before print version. CHILDREN/YOUTH HEALTH CARE AND MEDICINE U.S.-Russia Relations, January 2002 Children in Crisis, August 2001 Biotech Foods, March 2001 Weapons of Mass Destruction, March 2002 Cyber-Predators, March 2002 Mental Health Insurance, March 2002 Emerging India, April 2002 Preventing Teen Drug Use, March 2002 Chronic Fatigue Syndrome, April 2002 Foreign Aid After Sept. 11, April 2002 Sexual Abuse and the Clergy, May 2002 Farming Subsidies, May 2002 LEGAL ISSUES CRIMINAL JUSTICE Affirmative Action, September 2001 TRANSPORTATION War on Terrorism, October 2001 Civil Liberties in Wartime, December 2001 Airline Industry Problems, September 1999 Rethinking the Death Penalty, Nov. 2001 Policing the Borders, February 2002 Auto Industry’s Future, January 2000 Intelligence Reforms, January 2002 Accountants Under Fire, March 2002 Auto Safety, October 2001 Cyber-Crime, April 2002 Three-Strikes Laws, May 2002 EDUCATION MODERN CULTURE Cheating in Schools, September 2000 Distance Learning, December 2001 School Vouchers Showdown, Feb. 2002 Libraries and the Internet, June 2001 Evangelical Christians, September 2001 Future Job Market, January 2002 Future Topics Grade Inflation, June 2002 Archaeology Today, May 2002 Retirement Security, May 2002 v Airline Travel ENVIRONMENT Nuclear Waste, June 2001 POLITICS/GOVERNMENT v Invasive Species, October 2001 Globalization Backlash, September 2001 Same-Sex Schools Energy and Security, February 2002 U.S.-Mexico Relations, November 2001 v Crisis in Japan CQ RESEARCHER FAVORITES IN A DURABLE, CIRCULATING VOLUME Purchase All 4 Books And Save! 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