Targeting incremental reforms to states falls far short of goals
Variations In The Impact Of Health Coverage Expansion Proposals Across States
By Sherry Glied and Douglas Gould
Health Affairs
June 7, 2005
Abstract:
Most estimates of the consequences of alternative health insurance proposals focus on national impact, but the extent of cross-state diversity in uninsurance rates, economic and labor-market characteristics, and health care markets suggests that the impact of strategies will also vary. We illustrate this variation by comparing the effects of standard tax credit and Medicaid expansion proposals across states. Some states do well (or poorly) under all policies; others benefit under some but not others. Across policies, state effects on uninsurance rates vary by at least a factor of 2.5. Uniform national strategies that target the uninsured do not generate uniform national outcomes.
From the report:
In this paper we examine the impacts of five types of insurance expansion policies on coverage by state. First, we consider refundable tax credits for the non-group market, a proposal of the type that has been advanced by the Bush administration. Next, we analyze tax credits for small-firm workers and their dependents. Finally, we consider three types of policies that increase the eligibility limits for Medicaid or the State Children’s Health Insurance Program (SCHIP): an expansion of Medicaid eligibility to include all low-income adults, an expansion to low-income uninsured children not now eligible for SCHIP, and an extension of Medicaid eligibility to all parents of SCHIP-eligible children.
Results:
Tax credits. Declines in the uninsurance rate by state vary by a factor of nearly 5: from 4.4 percent in New Hampshire to 20.5 percent in Utah.
Small-firm tax credits. The effect across states varies by a factor of 2.4: from 2 percent of the uninsured in Washington, D.C., to 4.7 percent in Montana.
Low-income expansion. …the decrease in the uninsured population ranges from no effect in states with existing adult Medicaid eligibility limits above 133 percent of poverty, such as Vermont, Utah, and Massachusetts, to a high of 18.3 percent in Alabama and West Virginia.
SCHIP eligibility levels. The range of effects on the entire uninsured population is expected to vary from zero in states, such as New Jersey, Missouri, and Maryland, where eligibility already exceeds this level, to 4.7 percent in states, such as South Carolina, with very low existing SCHIP eligibility.
Medicaid for parents of SCHIP-eligible children. The effects by state range from 0.7 percent of the uninsured in Tennessee to 10.3 percent in Arkansas.
Effects on range of uninsurance rates. Each of the proposals considered here would narrow the range of uninsurance rates across the states. All would have their greatest effects in the states with the highest uninsurance rates. But the extent of narrowing is modest, even for the three policies with the largest national effects. Prior to reform, the nonelderly uninsurance rates among the states had a range of 17.1 percentage points, varying from 9.2 percent to 26.3 percent. Under the expansion to parents of SCHIP children, the range would narrow by 2.4 percentage points. The tax credit reform would have more than twice as large an aggregate impact but slightly less effect on the range, narrowing it by just 1.4 percentage points. The expansion to low-income adults would have the largest effect on the number of uninsured people and would narrow the range of uninsurance rates by 2.3 percentage points.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.259
And…
Study: States need help with uninsured
By Marguerite Higgins
The Washington Times
June 7, 2005
“The message is that there is no single solution that will work for all the uninsured, so we need a variety of solutions,” said Sherry Glied, head author and a health policy professor at Columbia University.
http://www.washingtontimes.com/business/20050606-101052-2922r.htm
Comment: Is the primary message really that we need a variety of solutions?
Well, let’s see.
This study measured the potential relative impact of applying five of the most frequently recommended incremental expansions to each state. It does demonstrate that the impact of each model would vary from state to state. But by targeting the most effective of each of these reforms to the various states, there still is only a modest reduction in the range of uninsurance rates.
No effort was made to estimate the costs of each of these proposals, though prior studies indicate that all of them increase health care spending. Also no mention was made of the fact that each of these proposals increase the administrative burden of health care funding, which is widely recognized as one of the greatest flaws in the U.S. system.
But what should be most alarming about this report is that the very best result obtained by targeting the most effective program to any given state still leaves four-fifths of the uninsured without coverage!
Obviously the most important flaw in this study is that they left out the single payer model which would cover everyone while controlling costs and reducing the administrative burden.
Unfortunately, the lead author, Sherry Glied, received the wrong message from her own study. We don’t need a variety of solutions that won’t work; we need the one solution that will: a single payer system of national health insurance.