Expanding Health Insurance Coverage James R. Tallon, Jr. President, United Hospital Fund Bipartisan...

Expanding Health Insurance Coverage

James R. Tallon, Jr.

President, United Hospital Fund

Bipartisan Congressional Health Policy Conference

January 13, 2007

Three questions in expanding health insurance coverage:

1. Who pays?

2. Is it voluntary or mandatory?

3. How is the program designed?

• Public vs. private

• Federal vs. state roles

• Pooling risk

• Benefit package

• Cost control features

UHF-Commonwealth Fund Blueprint for Universal Coverage

Principles for Reform:

• Access and affordability for all

• Administrative simplicity

• Stability of coverage

• Shared responsibility

• Continuity with existing programs

• Choice

• Pooled risk

• Efficiency and quality

Blueprint Building Blocks

• Public Programs

– Simplification

– Eligibility Expansion

– Family Health Plus “Buy-In”

• Purchasing Entity

– Administer the Family Health Plus “buy-in”

– Make coverage available to individuals at group rates

• Mandates

– Two versions of employer assessment for those not providing coverage

– Individual mandate, with income protection

Comparing Massachusetts and New York Prior to Reform

• New York has a larger share of low-income people and a larger share of uninsured low-income people

• New York has a lower rate of employer-sponsored insurance

• New York has a larger eligible but uninsured population (41% vs. 23%)

Medicare and Other Public

UninsuredUninsured

Medicaid/FHP/ CHP

Medicare and Other Public

Directly Purchased

51%

19%

15%

43%

Current Distribution Post-Reform: Public Changes

Employer-Sponsored

8.3 m

Employer-Sponsored

9.7 m

Distribution of Health Insurance Coverage, Before and After Reform:

Combined Public Program Changes

Note: “Post-Reform” scenario includes the combined administrative simplification, expansion of Family Health Plus to 150% FPL, and subsidized buy-in to Family Health Plus (150-300% FPL). “Medicare and Other Public” category includes dual eligibles and persons covered by CHAMPUS.Data include persons of all ages. Numbers may not sum to 100% due to rounding.

19.1 million people

2%

13%

2%

24%

8%

13%

10%

.3 m

4.5 m

.5 m

3.6 m

2.5 m

2.8 m

1.5m

2.5 m

2.0 m

Medicaid/FHP/CHP

FHP Buy-In (through

InsuranceExchange)

Directly Purchased

Medicare and Other Public

UninsuredUninsured

Medicare and Other Public

Medicaid/FHP/ CHP

43%

24%

10%

45%

Post Reform: Public Changes Post-Reform: Public Changes, Individual Mandate, Modest Employer Assessment

Employer-Sponsored

8.7 m

Employer-Sponsored

8.3 m

Distribution of Health Insurance Coverage, Before and After Reform: Public Program Changes Alone Compared with

Public Program Changes, Individual Mandate, and Modest Employer Assessment

Note: “Public Changes” includes the combined administrative simplification, expansion of Family Health Plus to 150% FPL, and subsidized buy-in to Family Health Plus (150-300% FPL). “Medicare and Other Public” category includes dual eligibles and persons covered by CHAMPUS.Data include persons of all ages. Numbers may not sum to 100% due to rounding.

19.1 million people

2%

13%

2%

26%

12%

13%

2%

.3 m

5 .0m

1.5 m

4.5 m

2.5 m

2.0 m

2.2m

2.5 m

.4 m

Medicaid/FHP/CHP

InsuranceExchange

Directly Purchased

8%

FHP Buy-In (through

InsuranceExchange)

Directly Purchased

.3m

Overview of Results

• Public program changes achieve a one-third reduction in the uninsured

• Significant subsidies are needed to gain participation and protection of low-income persons

• Universal coverage requires mandatory features– Employer mandates alone are not enough– Individual mandates are necessary for universal

coverage

Spitzer Agenda

Restructure:

• Close and consolidate certain hospitals

• Shift spending from institutional nursing homes to community and home-based care

• Negotiate lower prices for prescription drugs

• Aggressively fight Medicaid fraud

Reinvest:

• Universal coverage for children (year one)

• Streamline enrollment in order to enroll eligible but uninsured adults (over 4 years)

• Better management of high-cost cases