NEED FOR LEGISLATION AND SUMMARY OF THE "BASIC" HEALTH PROGRAM: UNIVERSAL ACCESS TO AFFORDABLE QUALITY HEALTH INSURANCE

America is the only industrial country in the world, except South Africa, that does not guarantee health care for all its citizens. The number of uninsured declined last year for the first time in more than a decade – but 43 million Americans remain uninsured, and any slowdown in the economy is likely to send the number up again. The vast majority of the uninsured are workers or dependents of workers. The consequences of being uninsured go far beyond vulnerability to catastrophic medical costs. The uninsured often lack timely access to quality health care, especially preventive care. They suffer unnecessary illness and even death because they have no coverage.

The number of the uninsured has grown from 32 million in 1987 to 43 million this year. Except for a brief pause in 1993 and 1994, the number of uninsured has consistently increased by a million or more each year until this year.1 Even these figures understate the number of the uninsured. During the course of a year, 70 million Americans will be uninsured for an extended period of time. 2

The vast majority of privately insured Americans -- 161 million citizens under 65 -- receive coverage on the job as workers or members of their families.3 But the uninsured are also overwhelmingly workers or their dependents. Eighty-two percent of those without insurance are employees or family members of employees. Of these uninsured workers, most are members of families with at least one person working full-time.4

Most uninsured workers are uninsured because their employer either does not offer coverage, or because they are not eligible for the coverage offered. Seventy percent of uninsured workers are in firms where no coverage is offered. Eighteen percent are in firms that offer coverage, but they are not eligible for it, usually because they are part-time workers or have not been employed by the firm long enough to qualify for coverage. Only 12% of uninsured workers are offered coverage and decline.5

The uninsured are predominantly low and moderate income persons. Almost 25 percent are poor (income of $8,501 or less for a single individual; $13,290 or less for a family of three). Twenty-eight percent have incomes between 100 and 200 percent of poverty. Eighteen percent have incomes between 200 and 300 percent of poverty. Almost three-fourths have incomes below 300 percent of poverty.6

An uninsured family is exposed to financial disaster in the event of serious illness. Unpaid medical bills account for 200,000 bankruptcies annually.7 Over 9 million families spend more than one fifth of their total income on medical costs.8 The health consequences of being uninsured are often as devastating as the economic costs:

• In any given year, one-third of the uninsured go without needed medical care.9
• Eight million uninsured Americans fail to take medication their doctors prescribe, because they cannot afford to fill the prescription.10
• Thirty-two thousand Americans with heart disease go without life-saving and life-enhancing bypass surgery or angioplasty, because they are uninsured.11
• Twenty-seven thousand uninsured women are diagnosed with breast cancer each year. They are twice as likely as insured women not to receive medical treatment until their cancer has already spread in their bodies. As a result, they are 50% more likely to die of the disease.12
• The tragic bottom line is that 83,000 Americans die every year because they have no insurance. Being uninsured is the seventh leading cause of death in America. Our failure to provide health insurance for every citizen kills more people than kidney disease, liver disease, and AIDS combined.13

The BASIC program builds on two successful federal-state health insurance programs: Medicaid and the Child Health Insurance Program (CHIP). It also incorporates a number of elements from Vice-President Gore’s proposal to improve and expand upon insurance coverage under CHIP and Medicaid to the parents of eligible children. The BASIC plan extends the availability of subsidized coverage to all uninsured low and moderate income Americans, regardless of age or family status. It guarantees the availability of coverage in every state for every uninsured person, and includes provisions to encourage enrollment by those who are eligible. The plan also allows other uninsured individuals to buy-in to the program by paying the full premium.

• Phase I: Coverage for Children and Parents – Expansion of CHIP and Medicaid
• Eligibility levels are raised to 300% of poverty ($42,450 for a family of three) for all uninsured children over 2 years.
• Coverage is made available to all uninsured parents of enrolled children.
• Coverage is made available to legal immigrant children, and their parents.
• The minimum benefit package under CHIP for children is improved by adding eye-glasses, hearing aids, and medically necessary rehabilitative services for disabled or developmentally delayed children.
• Additional steps are established to encourage enrollment of eligible children and their parents, including presumptive eligibility, qualification for at least twelve months, and simplified application forms.
• The system of capped state allotments under CHIP is eliminated and federal matching funds are made available for all eligible persons enrolled in the program.

Phase II: Coverage for the Remaining Uninsured

• Subsidized coverage is made available for the remaining uninsured with incomes below 300% of the poverty level. Coverage is phased in by income levels, beginning with those below 50% of the poverty level in the third year of the program, rising to 300% of the poverty level in the ninth year.
• Other uninsured individuals above 300% of poverty may buy-in to the program by paying the cost through premiums.

Responsibility of Employers

Eighty-two percent of the uninsured are workers or dependents of workers. Employers will not be required to provide coverage or contribute to the cost of coverage -- but they will be required to offer their uninsured employees an opportunity to enroll in the program and agree to facilitate the coverage by withholding any required premium contributions from the employee’s periodic pay.

Preliminary estimates of similar proposals indicate that the federal cost will be $200-300 billion over the next ten years, beyond the amount already budgeted for expansions of coverage under the current CHIP program.

Endnotes:

1. Employee Benefit Research Institute (EBRI) analysis of Census Bureau Data from the Current Population Survey.
2. Robert L. Bennefield, "Who Loses Coverage and for How Long?" Current Population Reports, Department of Commerce, July 22, 1998.
3. EBRI Notes, November, 1999, analysis of CPS data.
4. William S. Custer and Pat Ketsche, Health Insurance Coverage and the Uninsured, Health Insurance Association of America, analysis of CPS data.
5. Kenneth E. Thorpe and Curtis S. Florence, "Why are Workers Uninsured? Employer Sponsored Insurance in 1997," Health Affairs, March-April, 1999.
6. U.S. Census Bureau, March 2000 Current Population Survey.
7. Sullivan, T.A., Warren, E., Westbrook, J. (2000) The Fragile Middle Class: Americans in Debt. Yale University Press.
8. Ibid.
9. The Henry J. Kaiser Family Foundation Commission on Medicaid and the Uninsured. June 1998.
10. Ibid.
11. Wenneker, M. B., Weissman, J. S., Epstein, A. M. (1990) The association of payer with utilization of cardiac procedures in Massachusetts. JAMA 264: 1255-1260.  Data extrapolated to the national population.
12. Ayanain, J. Z., Kohler, B. A., Abe, T., Epstein, A. M. (1993) The relation between health insurance coverage and clinical outcomes among women with breast cancer. New Engl. J. Med. 329: 326-331. Data extrapolated to national level.
13. Franks, P., Clancy, C. M., Gold, M. R. (1993) Health insurance and mortality: Evidence from a national cohort. JAMA 270: 737-741. Incidence rates converted to population numbers.