Expanding Existing Health Insurance Programs Key To Reducing Uninsured

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In testimony today before the Senate Finance Committee, Commonwealth Fund President Karen Davis presented a compelling case for expanding existing public health insurance programs to provide coverage for the most vulnerable segments of the nation's 42.6 million uninsured. She stressed the importance of expanding Medicaid and the Children's Health Insurance Program (CHIP) to cover parents of covered children. Medicare and Medicaid cover one of four Americans, and have 35 years' experience providing health insurance to the sickest and poorest among us. The programs are ideally suited to covering the uninsured with low incomes, unstable jobs, and serious health problems, Davis noted. While funded by the government, Medicare and Medicaid use private insurers when it is efficient to do so. Both programs purchase services from private managed care plans and make extensive use of private insurers as administrative claims payment agents. Davis was cautious about the use of tax credits to expand coverage. "The provision of tax credits for the purchase of nongroup insurance is particularly problematic," she said. "A $1,000 tax credit toward an $8,000 premium for a 60-year-old woman earning less than $35,000 a year is hardly sufficient to make such coverage affordable. It is difficult to adjust tax credits to take account of variations in individual health insurance premiums by age, geographic location, and health status." Different strategies should be employed to cover different groups, Davis said. Some options for expanding existing programs include:

  • Covering uninsured patients under Medicaid/CHIP (2.2 million with incomes less than 200% of the federal poverty level newly covered)
  • Expanding Medicaid to uninsured family members of disabled special needs children and disabled adults on Medicaid (more)
  • Providing premium assistance under Medicare to cover uninsured adults age 55 and over (3.4 million)
  • Covering uninsured dependents of elderly Medicare beneficiaries (600,000 people) and uninsured family members of disabled Medicare beneficiaries
  • Expanding Medicare coverage of the sick and disabled (3.7 million uninsured under age 55) by eliminating the two-year waiting period and broadening eligibility to those able to work
  • Improving the link between public programs and employer coverage through premium assistance and other methods (5 million to 13 million uninsured)
  • Increasing low-wage worker participation in employer health plans through employer-administered premium assistance (6 million uninsured workers and family members not currently participating in employer plans)
Designing options that work for families in different circumstances and having a single mechanism for family coverage will increase participation rates and improve continuity of coverage, Davis noted. Most importantly, giving top priority to providing health insurance for the sickest and poorest Americans will improve the quality of care, promote preventive care and proper management of chronic conditions, and relieve the financial burdens that too many uninsured or underinsured Americans face. "We have the luxury of a substantial 10-year budget surplus-at least $1 trillion of which was generated by economies in Medicare and Medicaid in the late 1990s," Davis said. "It is an ideal time to reinvest a significant share of those savings in improved health care for those left behind."

Publication Details

Publication Date: March 15, 2001
Related Topics
Health Care Coverage

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