Health Care Coverage in America

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Health Care Coverage in America

• Understanding the Issue and Proposed Solutions

Updated March 2008
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Nearly 47 million people in the U.S. were
uninsured for all of 2006 in every age group
and every income levelAmong these are 8.7
million children
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Why the Strong Interest in the Uninsured?

• Cost of health care and health insurance keeps
  rising
• A number of states are implementing state-level
  reforms in lieu of federal action
• The debate over the reauthorization of the SCHIP
  increased concern and awareness for the issue

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Why is Health Coverage So Important?
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Not Having Coverage Can Be Dangerous to Your
Health

• An estimated 18,000 22,000 adults die each year
  because they are uninsured and cant get
  appropriate health care
• People without health insurance often go without
  care or delay care
• Adults without coverage die sooner than adults
  with continuous coverage
• Uninsured children are much more likely not to
  have a usual source of health care and go without
  needed care than children with insurance

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Americans with an Unmet Health Care Need Due to
High Costs
(Percentage of Americans Citing a Health Care
Need in Last 12 Months that Went Unmet Because of
Cost, 2002-2003)
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Uninsured Children More Likely to Delay or Forego
Needed Care
(Percentage of Children with Selected Access
Problems, by Insurance Status, 2004)
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Not Having Insurance May Threaten the Financial
Security of Families

• More than a third of care received by the
  uninsured is paid for out of their own pockets.
• 60 of uninsured working age adults report
  problems paying medical bills, compared with 35
  of insured adults.

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Who Is Uninsured?
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Who is Uninsured?

• Nearly 47 million Americans, or one in six,
  including 8.7 million children
• More than eight out of 10 are in working families
• In every age group and every income level

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Most Uninsured Americans are in Working Families
(Uninsured Nonelderly Population by Work Status
of Family Head, 2006)
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Uninsured Come From All Income Levels
(Uninsured Nonelderly by Family Income, 2006)
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How Do Americans Get Covered?
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Employer-Sponsored Coverage

• Most Americans nearly 162 million receive
  health coverage through the workplace.
• Employer-sponsored coverage is steadily shrinking
  but remains an important and popular source of
  coverage.

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Most in United States Get Coverage Through An
Employer
(Millions Under Age 65 with Health Coverage
through Each Source, 2005)
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Percentage of Firms Offering Health Benefits
(Percentage of Employers Offering Health Benefits
by Firm Size 2007)
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Increases in Health Insurance Premiums Compared
to Wage Growth and General Inflation, 1999-2007
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Individual Coverage

• Individual or non group coverage covers 17.7
  million people 6.8 percent of Americans.
• People seeking individual coverage are usually
  self-employed or arent offered coverage through
  their employers.
• 40 percent of firms didnt offer coverage in 2007.

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HSAs and High Deductible Health Plans (HDHP)

• Established by Medicare Modernization Act of 2003
• A kind of bank account holding pre-tax dollars
  from workers and employers, from which
  individuals can draw on to purchase health
  services
• HSAs can be offered only in conjunction with
  high-deductible health plans
• HDHPs covered 4.5 million people by January 2007

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Medicaid

• Covers nearly 70 million people
• Funded by both state and federal dollars
• Generous package of benefits covering low-income
  mothers and children, persons with disabilities
  and certain seniors

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Medicaid Enrollees
(Unduplicated Annual Enrollment for Fiscal Year
2007)
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State Childrens Health Insurance Program (SCHIP)

• Provides coverage for more than 6 million
  children
• Enacted by Congress in 1997
• Financed jointly by federal and state
  governments, the program is intended for children
  whose parents earn too much to qualify for
  Medicaid yet too little to afford private
  coverage

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Medicaid, SCHIP Childrens Coverage Growing in
Importance
(Percent of Children Under Age 18 Covered, by
Source, 1999-2006)
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Selected Characteristics of Children Who Qualify
For SCHIP Based on Income, But Arent Enrolled,
2005
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Medicare

• Average monthly enrollment of 43.9 million people
  in 2007
• Virtually everyone over 65 is eligible, along
  with certain individuals with permanent
  disabilities and those with end-stage renal
  disease
• Eligibility does not depend on a persons income
  or assets
• Can be a platform for providing coverage to early
  retirees between the ages of 55 and 64 (i.e.,
  public program expansions)
• Not a significant part of uninsured debate

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Approaches to Covering the Uninsured
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Expansion of Employer-Based Pools and Creation of
New Pool

• Allow individuals and employers to buy into an
  existing large pool to spread risk and lower
  premiums
• Federal Employees Health Benefits Program (FEHBP)
  is community rated federal workers who have a
  medical history of illness cannot be charged more
  than those who do not
• Associated Health Plans (AHPs) help small
  employers purchase health coverage through trade
  associations

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Employer Contribution Requirements (Pay or Play)

• Requires employers to either provide insurance to
  their workers or finance coverage through a tax
  covering the cost of providing insurance to their
  workers under newly created public plans, or an
  insurance pool

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Individual Mandates

• Requires everyone to have some basic form of
  health insurance
• Insurance could be provided by employers, or the
  public sector, or from private insurers
• Theory akin to how automobile insurance works-
  every driver has to buy at least the legally
  required minimum of coverage

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State and Local Coverage Initiatives

• Highly diverse policy approaches that attempt to
  provide health insurance for populations that
  typically find it difficult to access affordable
  health insurance
• Borrow concepts and models from both public and
  private sectors

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State and Local Coverage Initiatives
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Expansion of Medicaid, SCHIP and other Public
Programs

• Policy experts suggest that these programs, with
  appropriate adjustments can be readily expanded
  to cover a larger percentage of the uninsured.
• These programs are financed through a variety of
  mechanisms, including state, local and federal
  tax revenue, as well as tax increases on private
  insurers.
• They can also be tailored to require participants
  to pick up a significant share of the costs
  (i.e., buy in bill).

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Tax Proposals

• Allowing individuals and/or employers to use
  pre-tax dollars to pay for insurance premiums,
  (i.e., HSAs)
• Would erase the tax disadvantage people face when
  they buy non-group coverage

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Fully Tax-Financed Health Care System

• Employers, individuals, and other private
  entities would be responsible for health care
  coverage, through taxes paid to the government
• Single payer approach Health care providers
  would remain private, but the government would
  administer payments for health care services
  similar to the Canadian model

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Questions to Ask About Any Health Coverage
Proposal

• How many uninsured people will likely gain
  coverage?
• How much new spending of any kind will be
  necessary to cover each newly insured person?
• Who will be asked to pay the added costs needed?
  Government? Employers? Individuals?
• What is the likelihood that those newly covered
  will be able to keep their coverage for more than
  a few months?

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Questions to Ask About Any Health Coverage
Proposal

• What is the chance that some people presently
  insured will lose their coverage as a result of a
  proposal being implemented? If so, how many?
• 6. Is funding for the proposal permanent? Can
  it be sustained over many years?
• 7. If the proposal is adopted, how might other
  players react, such as physicians, hospitals,
  insurance companies, employers?

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Questions to Ask About Any Health Coverage
Proposal

• What help does the proposal offer to those with
  special situations, such as unusually high
  medical expenses?
• 9. Does the proposal help keep medical expenses
  in check for those presently paying for coverage,
  including governments, employers and individuals?

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Looking Ahead
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Health Care Coverage Matters

• In our current system, far too many people are
  left without the resources necessary to purchase
  and keep dependable coverage.
• The lack of health coverage has real consequences
  for a persons health and financial status.
• There is no ideal or easy solution Most
  proposals combine coverage expansion with other
  objectives.

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SCHIP Matters

• Provided coverage for more than 6 million
  children over the past 10 years
• Almost 70 percent of eligible children enrolled
• Long-term status yet to be decided

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Questions and Answers
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www.CoverTheUninsured.org
Lets Get America Covered!