April 6, 2001
Congress Considers Ways To Help the Uninsured Purchase Health Coverage
As Congress begins to debate several Senate and House bills offering health insurance tax credits to uninsured low- and middle-income Americans, the House Ways and Means Subcommittee on Health met April 4 to review critical trends in the uninsured population, as well as options for expanding health coverage.
Paul Fronstin, Ph.D., of the Employee Benefits Research Institute, reported that a strong economy and low unemployment drove a recent decline in the number of uninsured Americans (from 43.9 million in 1998 to 42.1 million in 1999). However, if the economy continues to weaken and the cost of health benefits continues to rise, Dr. Fronstin and Jon Gabel of the Health Research and Educational Trust warned that the decline could rapidly reverse. A severe downturn could result in as many as 63 million uninsured Americans by 2005, with the greatest concentration among low-income workers - those least able to purchase individual coverage.
A second group of witnesses from George Washington University's Health Insurance Reform Project, the Wharton School of Business, Stanford's Center for Health Policy, and the National Association of Insurance Commissioners advised that the proposed tax credits alone (varying from $400 for individuals to $2,500 for families) might not improve access to health insurance. The cost of individual coverage, they explained, is often twice the cost of employer-sponsored coverage, with out-of-pocket expenses up to five times those in a comparable group plan.
The panel suggested additional reforms, including the creation of a standardized menu of coverage options for self-insured Americans (similar to the Federal Employees Health Benefits program) that would produce large risk pools and reduce cost. The menu would include a "default pool" to fund the cost of caring for individuals still unable to obtain health insurance. The panel also encouraged Congress to create a range of coverage options that would encourage enrollment by allowing consumers to choose a plan most compatible with their own financial resources and health needs.
Information: Christiane Mitchell, AAMC Office of Governmental Relations, 202-828-0526.
