Mayday, Mayday, Mayday! Cover the Uninsured!
Mayday, Mayday, Mayday! Cover the Uninsured!
This year, May Day marked the beginning of “Cover the Uninsured Week.” And mayday — an international distress signal used to communicate a life-threatening emergency — could not be more appropriate. According to the most recent estimates, 45.8 million Americans will suffer financial hardship, live sicker, and die younger because they lack health insurance. The sponsors of “Cover the Uninsured Week” hope to galvanize thousands of individuals and organizations across the country to raise awareness about the problems facing Americans without health insurance and to tell Congress that health care is the most significant threat to our nation’s economic security.
The health care system in our country is fundamentally broken and represents a life-threatening emergency for the millions of Americans without health insurance and for our economy as a whole. Today, four out of five individuals (PDF) without health insurance live in working families. These individuals risk economic hardship when they get sick and go without needed health care and preventive services. Economically, American businesses are struggling to compete in a global economy while shouldering the burden of our broken health care system.
Because of the human and economic cost of leaving so many Americans without health insurance, and the White House and Congress’s failure to hear the distress signals, some states have begun to forge ahead on their own. In April, Massachusetts enacted legislation designed to establish universal coverage for state residents. This plan, which is expected to be fully implemented in July 2007, relies on three platforms to expand health coverage — a public health insurance program, the employer-sponsored insurance system, and individual responsibility. This three-pronged approach:
- expands MassHealth — the Medicaid program — to cover all children living in families with incomes below 300 percent of poverty and to raise enrollment levels for individuals with disabilities and HIV/AIDS;
- requires employers with 11 or more workers to provide health insurance coverage or pay a $295 per employee per year assessment; and
- requires all individuals to have health insurance or pay a penalty.
The Massachusetts plan employs several strategies to ensure that residents are able to purchase coverage rather than pay penalties. For example, the new Commonwealth Health Insurance Connector is expected to offer affordable, comprehensive policies to smaller firms and individuals. The Connector will also operate the Commonwealth Care Plan, which will contract with Medicaid-participating health plans and provide premium subsidies to ensure that coverage is within reach for lower-income residents. Individuals with incomes below poverty will not have a premium responsibility for coverage obtained through the Care Plan, while those with incomes between 100 and 300 percent of poverty will receive premium assistance on a sliding scale. In addition, individuals will not be subject to the penalty if they cannot purchase coverage that is deemed “affordable.”
The Massachusetts Senate (PDF) estimates that roughly 515,000 state residents will obtain health coverage under this plan, while 35,000 will remain uninsured. Roughly 20 percent would be newly insured through the Medicaid program, while 42 percent would be covered through Connector policies and 40 percent through subsidized Commonwealth Care policies.
Over the next year, key decisions will determine whether these estimates — and the good intentions they represent — will be fulfilled. For example, the state will develop a definition of “affordable” coverage — and this decision will determine whether coverage really will be within reach for many Massachusetts residents, or whether most uninsured individuals and families will bear the burden of a financial penalty because “affordable” health insurance is still beyond their budget. The size and scope of premiums within the Connector and Commonwealth Care will also determine how much money the state will need to commit to premium subsidies, and whether employers will choose to pay an assessment rather than provide coverage.
The Massachusetts legislation represents a great step forward — it proves that we need not be politically paralyzed and can respond to the mayday calls of our residents. But this approach does not provide a road map for every state. In a speech to the U.S. Chamber of Commerce, Massachusetts Governor Mitt Romney noted that some states have not set aside funds for caring for the uninsured and thus might not have the capacity to implement Massachusetts’s plan. Independent analysis funded by the California HealthCare Foundation (PDF) examining the cost of adopting the Massachusetts model in California suggests that he understates the problems other states would face replicating this approach. For example:
- California has a higher proportion of uninsured and low-income residents than Massachusetts. Therefore, a larger share of California’s population would need financial assistance in order to afford coverage — and even less-generous assistance would cost California far more than Massachusetts will dedicate to these subsidies.
- Today, California and Massachusetts have significantly different levels of state spending on care for the uninsured. Massachusetts currently supports a significant uncompensated care pool and will redirect $1 billion — or $1,300 to $1,800 per uninsured person annually — from this fund to support premium subsidies. In comparison, California currently dedicates $2 billion in Disproportionate Share Hospital (DSH) funds for uncompensated care — which equals roughly $300 per uninsured Californian.
- Massachusetts can build on a stronger employer-sponsored insurance market than California can. Nearly 70 percent of non-elderly Massachusetts residents are covered through employer-sponsored coverage, while just over 55 percent of California residents have health insurance through their employers.
As this analysis illustrates, it may be difficult — if not impossible — for some states to pursue health reform on their own. And 45.8 million Americans without health insurance is a national problem that requires national leadership. We should use the Massachusetts effort as inspiration for a national search-and-rescue operation for our health care system and respond to “Cover the Uninsured Week”’s mayday call by making affordable health coverage for everyone a national priority.
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