The Tattered Safety Net

James G. Anderson, Ph.D.

Purdue University

Number of Uninsured in the U.S.

33.4 3741.7

43.438.7

54

0

10

20

30

40

50

60

70

80

90

1989 1992 1996 1999 2000 2003(est.)

Millions

Profile of the Uninsured

• 76.4% uninsured adults under 65 work full or part time during the year

• 34.9% earn more than $25,000 per year• Uninsured by race and ethnicity• 12.9% White• 9.7% White non-Hispanic• 18.5% Black• 18.0% Asian and Pacific Islander• 32% Hispanic

Profile of the Uninsured

• Uninsured by education

• 26.6% No high school

• 16.4% High school

• 13.4% Some college

• 10.3% Associate degree

• 7.1% BS/BA degree

Profile of the Uninsured

• Uninsured by income

• 22.7% Less than $25,000

• 17.0% $25,000-$49,999

• 11.0% $50,000-$74,999

• 6.9% $75,000 or more

Profile of the Uninsured

• Uninsured by age

• 11.8% Under 18 years

• 27.3% 18 to 24 years

• 21.2% 25 to 34 years

• 15.5% 35 to 44 years

• 12.8% 45 to 64 years

• 0.7& 65 years and over

Uninsured Children by Race and Ethnicity

• Uninsured by race and ethnicity

• 10.9% White

• 7.3% White non-Hispanic

• 13.6% Black

• 14.2% Asian and Pacific Islander

• 24.9% Hispanic

Children Covered by Medicaid by Race and Ethnicity

• Uninsured by race and ethnicity

• 17.0% White

• 13.2% White non-Hispanic

• 35.8% Black

• 18.6% Asian and Pacific Islander

• 32.8% Hispanic

Reasons Given for Lack of Insurance

• 47% Insurance is too expensive

• 15% Job doesn’t offer insurance benefits

• 15% Unemployed or between jobs

Health Insurance Coverage for Children

199966.70%

16.40%

4.50%

12.50%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Employer Medicaid Other Uninsured

Percentage

Health Insurance Coverage 2000

64.10%

10.40%13.40% 14.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Employer Medicaid Medicare Uninsured

Percentage

Health Insurance Coverage by Family Income Level

1999

78%

65%

94%

81%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<200% Poverty >200% Poverty

Children

Adults

Medicaid Enrollments Selected years

22.9

33.4 34

40.4

0

5

10

15

20

25

30

35

40

45

1990 1995 2000 2003

Millions

Medicaid Enrollment by Category 2003

4.3

7.7

19.6

8.8

0

5

10

15

20

25

Aged Disazbled Children Adults

Miillions

SCHIP Enrollment 1998 -2000

0.9

1

1.8

2.2

2.6

0

0.5

1

1.5

2

2.5

3

Dec-98 Jun-99 Dec-99 Jun-00 Dec-00

Enrollment inmillions

Medicaid Managed Care EnrollmentDecember 31, 2001

State % in Managed Care

Alaska 0%

Illinois 9.5%

Indiana 71%

Kentucky 90.4%

Ohio 26.8%

Tennessee 100%

US 58.3%

What is the Safety Net?

• Health providers who have a legal obligation to provide free or reduced-fee care to those who could not otherwise afford it.

Why Do We Need a Safety Net?

• 75 million (est.) (29%) of Americans without health insurance on any given day in 2002

• A cap on Medicaid enrollment would result in 67 million (24%) of population uninsured by 2002.

Access to Care bythe Insured and Uninsured

Type of Care Insured Uninsured

Mammograms 40% 16%

Pap Smears 76% 49%

Prostate Exams 20% 12%

Regular Source of Care

91% 64%

Routine Physical Exam

70% 47%

Problems Paying Medical Bills

18% 39%

Who are the Safety-Net Providers?

• Medicaid (40.4 million low income adults, children, elderly and disabled in 2003).

• Safety Net Hospitals in 1997 (482 hospitals)• Community and Migrant Health Centers (600

centers).• Family Planning Clinics (4,000 clinics).• Ryan White AIDS Program (136 projects).• Health care for the homeless (129 projects).• Public Health Departments.• Rural Health Clinics (2,500 clinics).

Urban Public Hospitals (1980-1990)

• Accounted for 7% of all hospitals.

• Provided 19% of all emergency room visits.

• Provided 18% of all outpatient visits.

• Nearly 50% of these patients were uninsured.

Who Pays for the Safety-Net?

• $129.9 billion federal funds for Medicaid in 2001.• $94.3 billion in state funds for Medicaid in 1995.• $17 billion federal funds for low-income hospitals

in 1992.• Medicaid costs consume 20% of state budgets.• Local governments spent 17% of county budgets

on health care in 1992.• Hospitals provided $18.5 billion in

uncompensated care in 1997.

Medicaid: The Insurance Safety-Net

• Provides coverage for 58% of those with incomes below the federal poverty line (2001: $8,590 individual; $17,650 family of four).

• Pays for 1 of 3 births.

• Provides coverage for 1 of 4 children.

• Provides coverage for 40% AIDS patients.

• Pays for 66% of nursing home care.

What Problems Do Safety net Providers Face?

• Marketplace pressures will make it difficult to make up losses.

• By 2002 hospitals will lose $20 billion in Medicaid; $14.4 billion in Medicare; $20 billion from private payers; $25 billion due to uncompensated care.

• Teaching and inner-city hospitals will operate at a loss; many will close.

• Providers will try to shift costs back to employers raising prices $1,000 per covered worker.

Strategies for Expanding Health Insurance Coverage

• Tax Credits.

• Expanding Public Programs (e.g., Medicaid, SCHIP)

• Combination of the two approaches.

Public Willingness to Pay

• 53% of the American public are willing to pay at least $30 per month to cover the uninsured

• 46% are only willing to pay $5 per month or nothing at all

Public Support for Reform Options

• 21% Expand Medicaid and SCHIP

• 21% Require businesses to offer private health insurance to their employees

• 20% Provide tax deductions and credits to help people purchase private health insurance