What do health care companies want for Americans? More affordable health insurance available for all
America’s leading health care firms are funding an advertising and lobbying campaign to reduce the number of uninsured. Under the leadership of the Healthcare Leadership Council’s Health Access America effort, the group started with a full-page newspaper ad in June and visits to members of Congress to push use of tax incentives to make private health insurance more affordable through the workplace.
Mary Grealy, executive director of the Healthcare Leadership Council in Washington, DC, says preliminary data from a new study show the value of existing tax benefits for employer-provided health insurance is worth about $610 for individuals with an income up to $25,770, or three times the poverty level. That falls far short of proposed tax credits before Congress, which range from $1,000 to $1,500 for individuals and $2,000 to $3,500 for families, she says.
"We can make a lot of progress addressing the problem of the uninsured right out of the box by making coverage more affordable for working families and Main Street business owners," Ms. Grealy adds.
Besides urging policy-makers to use tax incentives to make private health insurance more affordable through the workplace, campaign leaders say they also will seek improvements in current federal programs such as Medicaid and Children’s Health Insurance Programs (CHIP) to increase participation by eligible families.
"This is a solvable problem," Ms. Grealy says. "We know that three of every four uninsured Americans live in a household in which there is at least one wage-earning family member. There are millions of people who receive an offer of insurance from an employer, but can’t afford it for themselves or their dependents. There are millions more who work, but who do not received an offer of employer insurance coverage.
"A survey by the National Association of Health Underwriters shows that there are many employers who want to offer health coverage to their employees and will do so if a change in public policies make that coverage economically feasible," she explains. "Likewise, many working Americans who are now declining insurance will, with a helping hand in the form of tax incentives, begin to purchase coverage for themselves and their families. We can reach the vast majority of the uninsured through the existing employer-based coverage system."
Several months before the campaign broke, Ms. Grealy testified before the Senate Finance Committee that more than 70% of the uninsured are in families with at least one worker. More than one-third of the uninsured, nearly 17 million people, are in families in which at least one family member has been offered employer coverage but has turned it down.
"According to our research, the decliners of employer health insurance predominantly decline coverage for their families, not themselves. This is most likely because many employers charge higher premiums and cost sharing for dependents than for the actual employees," she says.
Another large group of the uninsured is in families in which there is at least one worker but the employer does not offer coverage. The survey found that many companies that do not now offer health coverage would begin to do so if premiums were reduced or subsidized by as little as 10%, although many would require as much as a 25% subsidy, Ms. Grealy says.
"However, two of three employers surveyed who do not offer insurance said that they will continue that practice if no public policy changes are made to reduce the cost of insurance. One concern raised by the survey is the fact that a significant number of small employers will likely drop their coverage if their health insurance premiums rise by 10% in the near future," she points out.
Also testifying at the March 13 Finance Committee hearing was Diane Rowland, executive director for the Kaiser Commission on Medicaid and the Uninsured in Washington, DC, who said that for the low-income uninsured, the most immediate and potentially most effective means of broadening coverage will be to build on current public programs: Medicaid and CHIP.
"Building on coverage available today through Medicaid and CHIP would help close the gaps that currently exist when some family members are eligible and others are ineligible for coverage and low-income childless adults are excluded from coverage," she told the committee. "This approach also has the advantage of building on an existing administrative and financing structure in operation in all 50 states."
Ms. Rowland tells State Health Watch there is concern that as the income level for those who are covered is raised, there can be an incentive for employers to cut coverage and for employees to move from private to public coverage. Another concern is funding for the public programs.
"States vary in their ability to take on additional funding burdens," she says. "Most people need insurance in bad economic times, when state money is least likely to be available."
A strategy that relies on state action without a federal mandate can result in variations around the country, Ms. Rowland says. "But if we have 42 million uninsured and we can get the states where many of them live [such as California, Texas, Florida, and New York] to act, that will help address the problem. The federal government needs to demonstrate a willingness to put more money on the table."
She says the most effective strategy at this point may be to reach out to uninsured families, going where the kids are today, and building on that success.
How likely is it that changes will be made? Ms. Rowland says she thinks that members of Congress are generally proud of what has been accomplished with CHIP, although they wish it would be bigger and grow faster. "It’s generally well-received by most states. There’s a real sense of wanting to build on Medicaid and CHIP, but they also want to look at the president’s proposal for tax credits and other changes."
Meanwhile, legislation introduced in Congress over the summer would allow parents as well as children to get coverage through CHIP. The Family Care Act of 2001 would use $28 billion set aside in the FY 2002 congressional budget resolution to expand a variety of coverage options for low-income people. The prime sponsor of the bill, Sen. Edward M. Kennedy (D-MA), said, "If you can cover the parents, you can ensure that you can cover the remaining children."
Sen. Olympia Snowe (R-ME) also sponsors the measure.
States that expand eligibility for CHIP to children in families with incomes up to twice the federal poverty level ($29,260 for a family of three) would be eligible for an enhanced match that would allow parents to sign up for coverage as well. States also would be given incentives to extend coverage for children up to age 20, childless pregnant women, legal immigrant children and pregnant women, and parents through the Medicaid program.
A report from Families USA says that while many people, including policy-makers, believe that Medicaid offers a health care safety net for all low-income people, this is a myth, as shown by the readily apparent holes in the safety net. Because states have the freedom to design their own programs, Families USA says, there are 56 different programs, all of which treat children, parents of dependent children, and nonparent adults differently.
As a result of incremental improvements to Medicaid over the last 15 years and introduction of CHIP, most states now cover children in families with income below 200% of the federal poverty level. However, most states have established eligibility standards for parents that are very low. For example, in more than half of the states, a parent in a three-person family working at minimum wage is considered to have too much income to qualify for Medicaid if the parent works full time.
In 40 states, nonparent adults are ineligible for Medicaid, even if they have no income at all, unless they are severely disabled. Ten states provide some coverage for adults, either through Medicaid or through Medicaid-like coverage without any federal funds. But even in those states, income eligibility standards are very low.
[Contact Ms. Grealy at (202) 452-8700, Ms. Rowland at (202) 347-5270, and Families USA at (202) 628-3030.]
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