ACP's new approach to boosting access to health care
A College position paper calls for subsidized coverage and temporary assistance for those between jobs
From the March 1998 ACP Observer, copyright © 1998 by the American College of Physicians.
By Howard B. Shapiro, PhD
Despite robust growth in the economy and unemployment rates that are at a 24-year low, the already high number of Americans without health insurance continues to grow.
Between 1993 and 1996, the economy produced 7 million new jobs, but the percentage of Americans without insurance increased from 15.3% to 15.6%. Although federal and state government budgets are in the black and legislatures at both levels have made some efforts to expand coverage, approximately 42 million Americans remain uninsured.
In a new policy paper approved by the Board of Regents in January, ACP reaffirmed its commitment to the long-term goal of health care insurance coverage for all Americans and laid out recommendations that would cut the number of uninsured Americans in half. The Board of Regents recognized that several steps over a number of years would be necessary to reach the long-term goal.
Since comprehensive federal health reform failed in 1994, there have been successes in tackling specific problems for segments of the population, most notably the Health Insurance Portability and Accountability Act of 1996 (the Kassebaum-Kennedy bill) and the Child Health Assistance Program of 1997. These add to previously enacted provisions that are gradually expanding Medicaid for children and pregnant women and expanding coverage for the low-income uninsured in states like Massachusetts, Vermont, Oregon, Delaware and Tennessee.
In preparing its new position paper, the College recognized that health reform proposals that succeed in today's political climate are likely to:
- Build on existing programs and not create any large, new government programs.
- Establish broad federal rules governing program benefits and standards and give states flexibility in designing and implementing programs.
- Target the population below 200% of the federal poverty guidelines ($32,000 for a family unit of four).
- Derive funding from "indirect" sources such as tax credits and savings in related programs and from expansions of existing revenue sources such as tobacco taxes, not from a large, general tax increase.
- Assure that current coverage or health care options available to insured people are not diminished or perceived to diminish.
- Win bipartisan support.
By incorporating these lessons and building on recent incremental reforms, ACP proposes the following four steps in the position paper, "Strategies for Incremental Expansion of Access to Care: Steps to Universal Coverage." (The paper is available at www.acponline.org/hpp/pospaper/expansion or through ACP's Division of Public Policy, 700 13th St., NW, Suite 250, Washington, D.C. 20005.)
1. Expand Medicaid enrollment outreach. As Medicaid has expanded beyond its traditional caseload of families on welfare, many people who are eligible for benefits have not enrolled. Moreover, as people are transitioned from welfare to work under new program rules, some are losing coverage that they are still eligible to receive. An estimated 6 million children are eligible for Medicaid but uninsured.
Reasons for these underenrollment problems are complicated and range from poverty and illiteracy to disincentives for states to add beneficiaries for whom they must pay a portion of the cost. ACP is calling on the federal government to develop effective strategies to enroll these people and to provide sufficient federal funds to help pay for these efforts. The president's recent budget proposal would expand funding for outreach activities.
2. Provide Medicaid for all adults living in poverty. Many states have implemented "Section 1115" Medicaid waivers that have used managed care and other changes in financing and delivering services to save money. Some states have combined those savings with payments from the Disproportionate Share Hospital (DSH) Payment Program to finance coverage for uninsured persons without requiring any additional federal funds. The College's proposal would give states more flexibility in exchange for enrolling all uninsured adults up to the poverty level. Medicaid would cover all poor adults and children for the first time in the program's history.
3. Subsidize private coverage for the near poor. Under ACP's proposal, adults between the poverty level and 200% of the poverty level would be eligible for subsidized private health insurance coverage. A fully refundable tax credit could be used to purchase a defined set of benefits in each state, modeled after the private packages specified in the 1997 children's health legislation package.
The College's proposal would funnel the near poor into the private market and would basically bring adult parents in line with the new children's coverage, which will likely make it more politically acceptable than using Medicaid or another direct public program to help individuals who are living above the poverty level.
4. Give workers between jobs temporary assistance. Currently, individuals who lose employer-provided coverage may continue to be covered under their former employer's health insurance for 18 months—as long as they pay for the entire premium. Cost, however, has limited the impact of this program. The College proposes that the federal government provide time-limited assistance (e.g., up to six months) to help these people pay their health care premiums. Payments could be made on a sliding scale and would be phased out for people above 250% of the poverty level.
According to ACP's estimates, over five years (fiscal year 1998 through 2002) these proposals would cost $20 billion for enrollment outreach; $230 to $276 billion (depending on how income is calculated) for the combined expansion of Medicaid and subsidized private coverage to 200% of the poverty level; and $30 billion for temporarily uninsured people.
The position paper also identifies potential sources of funds, including contributions from health care premiums, tobacco tax increases, redirected DSH funds, and federal and state Medicaid savings from giving states additional flexibility in administering Medicaid benefits. These sources would generate close to $200 billion, leaving net new federal costs of $32 billion to $78 billion over the five-year period.
ACP's proposed expansions could be phased in over several years and implemented in combinations or sequentially. The College has calculated that if its recommendations were fully implemented, about 20 million Americans—roughly half of the uninsured population—would receive coverage and that the percentage of uninsured population would drop from 15.7% to 8.2% of the population.
Health care coverage for all Americans is the long-term goal, but that is not likely to be achieved by a single piece of legislation. It is critical to move forward, consolidate gains, and then go after the next objective. These new College proposals build on existing public and private coverage and financing mechanisms. We believe they are politically viable and that the costs and potential funding sources are realistic. College leaders are committed to working with ACP members, legislators, and colleagues in other organizations to refine these ideas and take the next steps.
Howard B. Shapiro is ACP's Vice President for Public Policy.
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