The Uninsured and Children’s Health Insurance Program

According to the last official U.S. Census Bureau estimate in 2007, almost 46 million Americans (15.3 percent of the population) had no health insurance, and within the next few years, the number of uninsured is likely to reach 50 million, or one in every six Americans. The economic recession has caused 2 million or more people to lose their health benefits along with their jobs, and millions more Americans lack adequate coverage to keep their medical bills manageable, a situation that will only grow worse with the continued economic crisis. No healthcare system can operate effectively or efficiently with so many people falling through the cracks. The uninsured and underinsured forgo necessary care, receive less preventive care, are diagnosed at a more advanced stage of disease and require more emergency room treatment than those patients with coverage. At the same time, most state budgets are under severe stress, impeding their ability to expand programs for the uninsured.

Lack of coverage is largely an affordability issue. Nearly 65 percent of uninsured families have incomes below 200 percent of the federal poverty level. The 111th Congress has taken a significant step in the right direction with the passage of the Children’s Health Insurance Program (CHIP) reauthorization and expansion, which will cover an additional 4 million uninsured children who do not qualify for Medicaid. The Premier alliance supported this action and applauds the new Congress for its early passage.

Hospitals, as frontline providers of healthcare, share the burden of financing care for the uninsured through charity and uncompensated care. Even before the start of the

current recession, uncompensated care costs were climbing, due in part to the erosion of employer-based benefits and to the growing prevalence of insurance policies requiring high enrollee cost-sharing. Between 2006 and 2007, uncompensated care provided by community hospitals increased from $31.2 billion to $34 billion, according to the American Hospital Association (AHA). A more recent AHA survey of hospitals found that uncompensated care is increasing at even a higher rate (8 percent more between July and September 2008 than in the same period in 2007). The cost shift to hospitals and their insured patients that results from caring for the uninsured and underinsured is exacerbated by inadequate hospital reimbursement from the nation’s two major public insurance programs, Medicaid and Medicare.

Recommendations

The Premier alliance sees health reform as essential to the sustainability of our healthcare system and to America’s economic recovery. The Premier alliance believes that there are certain elements of health reform that are critical to its success:

�Build on our current system of private and public coverage to achieve meaningful reform that brings adequate and affordable coverage to our nation’s uninsured.

�Take additional steps to bolster the healthcare safety net. The recently enacted CHIP legislation included outreach provisions to increase enrollment in Medicaid and CHIP by children who are eligible but not currently participating in the programs.

Overview

The Uninsured and Children’s Health Insurance Program

�Implement reforms to the private insurance market, starting with the rules governing the sale of small group and individual policies. To facilitate the choice of affordable and high quality private insurance options, especially to small businesses and individuals lacking a connection to the workplace, insurance exchanges

or similar pooling mechanisms need to be created. Designed correctly, these arrangements can reduce the administrative costs of health insurance and bring increased transparency to the process of choosing among competing insurance products for employers and consumers.

HEALTH INSURANCE COVERAGE OF THE NONELDERLY POPULATION, 2007

SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of 2008 ASEC Supplement to the CPS.

261.4 Million

The Uninsured and Children’s Health Insurance Program

Medicaid/Other Public

16%

Private Non-group6%

Employer-sponsored Insurance

61%

Uninsured17%

HealthcarePolicyPositionStatements