Insuring America's Health Principles and Recommendations (2004) / Chapter Skim
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3. Eliminating Uninsurance: Lessons From the Past and Present
3. Eliminating Uninsurance: Lessons From the Past and Present
Pages 66-109
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From page 66... ...
The Committee's principles for assessing coverage proposals derive from the historical record as well as from its examination of the consequences of uninsurance. NATIONAL EFFORTS TO BROADEN COVERAGE, 1916-1984 The lack of universal health insurance in the United States is in part a legacy of early twentieth-century precedents in the organization and financing of health services in the United States.
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From page 67... ...
that included health insurance, and experience with the limited prepaid medical services available to fraternal or mutual benefit society members, spurred interest in universal coverage in the United States (Numbers, 1978~. Initial organized efforts to extend coverage broadly occurred during the years around World War I (Starr, 1982~.
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From page 68... ...
It targeted iFor example, former President Theodore Roosevelt made sickness insurance one of the planks in his ultimately unsuccessful campaign against Woodrow Wilson in 1912 on the Progressive ticket (Numbers, 1985)
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From page 69... ...
Between 1916 and 1920, the AALL's model sickness insurance bill was de
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From page 70... ...
Proposals for state sickness insurance programs were abandoned by 1920, felled by the lack of political leadership, the difficulties of enacting mandatory policies on a state-by-state basis, and the AALL's inability to build coalitions and fashion workable political compromises with the economic interests that opposed its model for expanding health insurance (Numbers, 1985~. In addition, a harmful legacy of this first political battle was the framing of mandated coverage as counter to American values, with coverage proposals attacked in newspapers and speeches as fundamentally Germanic, and, after the close of World War One and the onset of the Red Scare, as expressions of Bolshevism (Hoffman, 2001~.
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From page 71... ...
Universal coverage bills stalled in Congress, but consumer demand for health insurance grew. While commercial insurers were slow to enter the market for group policies organized through the workplace, nonprofit and independent organizations created prepayment plans for hospital services, indemnity and service benefit plans for physician care, and sites for the direct delivery of services that gave fundamental shape to the organization and financing of health services in subsequent decades.
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From page 72... ...
The growing centrality of health insurance revenue to the fiscal health of the health care system created interest on the part of providers (physicians, hospitals) in seeing greater numbers of the general population covered by insurance, albeit on a voluntary basis (IOM, 2003a)
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From page 73... ...
Annual hearings on hospitalization proposals failed to advance reform, although the 1960 Kerr-Mills Act amending Social Security did acknowledge the interest in financing care for low-income seniors, increasing grants-in-aid to the states that raised sufficient matching funds (Marmor, 1973~. An Incremental Compromise for Universal Coverage: Medicare and Medicaid In the late 1950s, the level of health insurance coverage was at an all-time high, although only about 8 percent of the population had coverage that could be called comprehensive (i.e., insurance that covered hospital stays and physician services)
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From page 74... ...
However, these two aspects of the 1965 statute laid the groundwork for significant growth in health care inflation and spending (Starr, 1982~.7 The Medicare and Medicaid Amendments represented a limited extension of health insurance coverage. Medicare also augured for improved access to care for African Americans, as certification for a hospital to participate in the program was conditioned on its desegregated status (Reynolds, 1997~.
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From page 75... ...
of the health care system motivated reform (Starr, 1982; Lewis, 1983; Steinmo and Watts, 1995; Hacker, 1997~. Public officials, insurers, and employers were united in the widely shared belief that a poorly organized and inefficient health care system fueled health care inflation and that universally mandated coverage could bring cost savings (Starr, 1982~.8 A combination offactors defeated efforts to extend coverage further.
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From page 76... ...
, insurers, and the states to the regulatory aspects of proposed reform, passage of a universal coverage bill came close in 1974 (Starr, 1982; Etheredge, 1990; Steinmo and Watts, 1995; Hacker, 1997~. President Nixon's February message to Congress laid out a Comprehensive Health Insurance Plan that combined Medicare, Medicaid, and an employer mandate (Davis, 2001~.
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From page 77... ...
In the wake of the failure to implement universal coverage, the federal, state, and some local governments in recent years have experimented with incremental coverage expansions with impacts much more modest than that of Medicare and Medicaid in the 1960s. In the sections that follow, the Committee will first explore federal expansions of Medicaid, the State Children's Health Insurance Program (SCHIP)
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From page 78... ...
This section reviews major federal extensions of coverage since the mid1980s, both public (Medicaid expansions to cover pregnant women, infants, and young children, and the State Children's Health Insurance Program) and private (federal regulation of the market for private insurance)
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From page 80... ...
However, with categorical structures of eligibility tied to the rules of the cash assistance programs, the income eligibility levels then in existence, and funding shortfalls, state Medicaid programs did not cover all those with incomes too low to afford private health insurance coverage (Starr, 1982; Stevens, 1989~.~° Medicaid significantly raised the level of federal iOMost Medicaid enrollees have been low-income children and their mothers. A sizable group of adults are eligible for but not enrolled in Medicaid, roughly 16 percent of the 19 million uninsured
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From page 81... ...
Between 1984 and 1990, the Congress altered categorical eligibility requirements and gradually increased Medicaid income eligibility levels for pregnant women, infants, and children through provisions in its annual spending bills; Box 3.3 summarizes the legislative provisions. These changes delinked Medicaid coverage for pregnant women, infants, and children from the requirement that they meet their state's welfare eligibility requirements, a process continued with welfare reform in 1996 (KCMU, 2002a)
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From page 82... ...
Recent estimates have been as low as 4 percent, with upper bounds between 17 percent and 23 percent, depending on how substitution is defined and measured (Cutler and Gruber, 1997; Alteras, 2001~. This concern about substitution of Medicaid coverage for employment12In 1997, federal law was revised so that implementation of Medicaid mandatory managed care contracting no longer required a Section 1115 waiver (Mann, 2002)
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From page 83... ...
One study estimates an 8.5 percent decrease in the infant mortality rate associated with the 30 percentage point increase in Medicaid eligibility for women of reproductive age (15 to 44 years old) between 1979 and 1992, with the expansions targeted to women eligible for welfare having more of an effect on health (Currie and Gruber, 1996b)
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From page 85... ...
be phased in by September 2002, so that most U.S.-born children in this category are now eligible for public coverage.l3 Yet the latest Census Bureau data indicate that nearly a quarter of children in this income bracket remain uninsured; foreign-born children who are ineligible for Medicaid comprise a part but not all of this uninsured group (Ku and Blaney, 2000; IOM, 2001a; Fronstin, 2002~. The State Children's Health Insurance Program and Medicaid, 1 997-2002 Finding: S CHIP has extended coverage among children to a significant degree and, to a much lesser extent to date, their parents.
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From page 86... ...
The program was originally intended to reach 40 percent of children uninsured at the time, targeting children and families earning between 100 and 200 percent of poverty and allowing states to raise eligibility above 200 percent if their existing Medicaid program already covered children at twice poverty (Wooldridge et al., 2003~. State SCHIP programs vary in their maximum income eligibility thresholds and in eligibility levels for children at different ages; on average, the proportion of children between 100 and 200 percent of poverty eligible for public coverage rose from 22 percent to 82 percent (LoSasso and Buchmueller, 2002~.
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From page 87... ...
The states streamlined applications and application processes, used materials translated into languages other than English, and involved local community-based groups and organizations (e.g., health clinics, schools, hospitals, employers) in outreach campaigns tailored to reach groups with high uninsured rates (e.g., ethnic and racial minorities, immigrants)
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From page 88... ...
. For all children nationally between 1994 and 2000, there was a decline in public coverage, from 18.5 percent to 16.4 percent, and it was growth in employment-based coverage, reflecting economic prosperity and welfare reform, that lowered uninsured rates (Holahan et al., 2003a)
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From page 89... ...
Because most Americans receive their health insurance through their employers or as dependents on another's employment-based policy, there has been much interest in reducing uninsurance by extending such coverage, through insurance market reforms or regulation of premiums, benefit packages, and eligibility. The federal government influences the degree of private coverage generally through its favorable tax treatment of premiums (the employer's contribution is tax exempt for both the employer and the employee)
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From page 90... ...
. If all persons in households with incomes below twice the poverty line were able to keep their private coverage continuously over one year, there would be more than a 25 percent decrease in the number of uninsured adults and nearly a 40 percent decrease in the number of uninsured children (Ku and Ross, 2002~.
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From page 91... ...
This section describes a key constraint on state options, the ERISA, and summarizes the experiences of five states Hawaii, Massachusetts, Minnesota, Oregon, and Tennessee that invested both funds and political capital during the 1980s and 1990s in programs that markedly extended public coverage and lowered their uninsured rates.~7 While many more states have established innovative coverage expansions in the 1980s and 1990s, the Committee has chosen to look briefly at five leading states whose efforts were both intended to and did have a dramatic impact and whose experiences provide a Avower uninsured rates are primarily influenced by a state s level of employment-based coverage and also reject economic characteristics of the state or region (including the propensity of employers to offer coverage) and specific demographic and socioeconomic characteristics of their populations; limited evidence allows for the sorting out of these different influences on coverage status of state populations over time.
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From page 92... ...
The need for states to stay within fixed budgets that cannot have deficits, to convince legislators to allocate new funds for public coverage, and to forestall the substitution of new public coverage for existing private coverage have stemmed the early ambitions of state programs to achieve universal coverage (Gold et al., 2001~. In addition, state government's capacity to finance health care and coverage extensions tends to be weakest at times when demands for such support are likely to be highest, for example, during an economic recession (IOM, 2003a)
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From page 93... ...
LESSONS FROM THE PAST AND PRESENT 93 in lost coverage and access to care for formerly insured residents but also the loss of federal funds. Despite budget pressures, over the past year reform advocates in a number of states, other than the five discussed below, have put together sweeping coverage extensions that have garnered broad legislative support (Associated Press, 2003; Orenstein and Fox, 2003~.
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From page 94... ...
A second example, the state of Maine's recently enacted Dirigo Health plan, is intended to bring about universal coverage for the state's roughly 180,000 uninsured persons by the year 2009, relying on a mix of public and private coverage sources and financing by means of a premium tax levied on employers as well as federal Medicaid dollars (Associated Press, 2003; Carrier, 2003; Haskell, 2003~. The States and the Employment Retirement Income Security Act of 1974 (ERISA)
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From page 95... ...
United States · Individually Purchased Insurance Public Insurance ~ Uninsured FIGURE 3.2 Coverage and uninsured rates and number of uninsured (in thousands) for population under age 65 in selected states and national averages, 2002.
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From page 96... ...
Most states have higher uninsured rates than the states selected here for discussion and, thus, much further to go to achieve universal coverage.
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From page 97... ...
. The state has attempted to boost health insurance coverage through its employer mandate (the only one in the United States)
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From page 98... ...
For the states discussed in this section, the estimated uninsured rate is based on data from the Census Bureau's March Current Population Survey. 22The term "pay or play" typically refers to a requirement that employers either offer a health insurance plan to their workers and dependents or pay (often a payroll tax)
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From page 99... ...
Minnesota has extended public coverage gradually, through a step-by-step or phasedin incremental approach of filling in private coverage gaps using the availability of federal matching funds through Medicaid to maximize the eligibility levels it can
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From page 100... ...
A year later, the state folded MinnesotaCare into a Section 1115 Medicaid waiver, together with the state's Medicaid program and other state-supported public coverage (Gold et al., 2001~. Minnesota's public coverage programs extend eligibility through a small group purchasing pool for county, town, and school district employees and their families; to childless adults earning less than 70 percent of FPL who are ineligible for Medicaid (e.~..
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From page 101... ...
Currently, the Oregon Health Plan extends Medicaid eligibility to pregnant women and children under age 12 with incomes up to 170 percent of FPL and other residents earning up to the poverty line (Gold et al., 2001~. Through the Family Health Insurance Assistance Program, subsidized coverage is available for persons ineligible for Medicaid who earn up to 170 percent of FPL (Gold et al., 2001~.
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From page 102... ...
. Although the state's insurance expansion was not expected to bring about universal coverage, it did broaden public coverage dramatically and significantly in 1994, through reform of its Medicaid program (Gold et al., 2001~.
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From page 103... ...
and the Alliance Healthcare Foundation (a conversion foundation) created a small-scale demonstration program to reduce uninsured rates 23This is a point-in-time estimate (e.g., the survey respondent reported his or her coverage status at the time of participation in the survey)
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From page 104... ...
Alameda County, CA About 1.3 million people live in Alameda County, situated in the Bay Area and including the cities of Oakland, Berkeley, and Hayward. The county has an uninsured rate of about 8.4 percent, or roughly 109,000 uninsured under age 65 (Brown et al., 2002)
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From page 105... ...
. While this survey's estimated uninsured rate is about double the estimate given by a statewide survey that included a sample of county residents questioned about their coverage status over the course of a year, both surveys arrive at estimated numbers of uninsured persons that are surprisingly similar (brown et al., 2002)
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From page 106... ...
In the early 1990s, rising health care costs, especially uncompensated care costs at the county public hospital's emergency department, motivated county officials to devise a health care plan for the portion of its uninsured population below the poverty line. The Hillsborough Health Plan is intended to promote the use of primary and preventive services, targeting low-income families and coordinating the provision of coverage with other public services in the county (personal communication, Toni Beddingfield, Hillsborough Health Plan, April 30, 2003~.
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From page 107... ...
. SUMMARY None of the reform campaigns or public initiatives discussed in this chapter has achieved universal health insurance coverage.
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From page 108... ...
. In Minnesota, the uninsured rate is nearly the lowest in the nation, but gaps in coverage remain, jeopardizing its goal of universal coverage.
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From page 109... ...
Universal health insurance coverage will only be achieved when the principle of universality is embodied in federal public policy. In the chapters that follow, the Committee builds on this base of knowledge about past and present efforts to reduce uninsurance to formulate its set of principles to guide a universal approach to insuring all Americans.
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