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