Rethinking the Uninsured Greg Scandlen Rethinking the Uninsured

Rethinking the Uninsured Greg Scandlen

Rethinking the Uninsured We’ve been working on this issue since I first got into this business -- 30 years ago. n n n Medicaid Expansions SCHIP High Risk Pools Small Group and Individual Market Reforms COBRA, HIPAA Cost control Nothing we’ve tried has solved anything. Sometimes when a problem seems intractable, it is time to reframe the issue.

Insured versus Uninsured -False Dichotomy This conference has added “the underinsured. ” • • Why not “the over-insured? ” Why not “the well-insured who can’t get services? ” Why not “the well-insured for 8 months a year? ” Why not “the uninsured who are eligible for Medicaid and can be instantly enrolled when something serious happens? ” Is insurance really the point, or should it be accessing and paying for health care services?

Counting the Uninsured (percent of non-elderly population) 1998 Uninsured all year SIPP 9. 1 MEPS 13. 3 Uninsured at any time during year SIPP 24. 5 MEPS 25. 3 Uninsured at a point in time SIPP 16. 6 MEPS 18. 3 NHIS 16. 5 CPS 18. 4 (Source: Congressional Budget Office, May, 2003) 1999 n/a 12. 2 n/a 25. 1 15. 7 17. 4 16. 0 16. 2

Counting the Uninsured Percent insured versus uninsured, 1987 - 2005 SOURCE: US Census Bureau, http: //www. census. gov/hhes/www/hlthins/hihistt 4. html

Counting the Uninsured In fact, virtually everyone is insured for something, and no one is insured for everything. n Young males, age 21 - 24 are the least likely to have health insurance of any age/gender category (40. 7% were uninsured in 2004). n But even they are usually covered for the things most likely to happen to them - auto accidents and workplace injuries. n Are they really “uninsured? ” n At the same time, people who are considered “fully insured” are not covered for everything. n People on Medicare on average spend 21. 7% of their income on OOP services, according to Karen Davis, or 15. % as a median according to Patricia Neuman. Which group is better insured?

Defining the Underinsured Probably the most common definition is 10% of income spent on health care. n n n But why, when national spending is 16%? Why is it bad to spend 10%+ on directly on health care, but not bad to spend 10%+ on taxes that pay for health care? If 10% is the standard, then Medicare is terrible. According to Banthin and Bernard in JAMA: n 19. 4% of Medicaid and SCHIP spent 10%+ n 18. 2% of privately insured n But only 10. 5% of the uninsured do Is it best to be uninsured?

Defining the Underinsured Where Does the Family Budget Go? 1918 1961 1987 Food 41. 1% 26. 0% 19. 4% Housing 26. 8 29. 2 33. 7 Transportation 3. 1 15. 1 25. 7 Clothing 17. 6 10. 3 5. 2 Health Care 4. 7 6. 6 4. 0 Other 6. 7 12. 8 12. 0

Sources of HC Spending

Rethinking the Issue Considerations in Expanding Coverage: n Who decides what to cover -- insurance companies, employers, the government -- or consumers? n Adverse Selection versus Moral Hazard n Insurance versus Third-Party Payment n Risk Pooling versus Pre-Paid Health Care n Pre-paid Health Care versus Post-paid Health Care n Premiums versus Benefits

Third Party Payment Insurer Consumer Provider

Two-Party Contracts Provider Insurer Consumer Employer

Risk Pooling Source: World Bank, 2004: http: //extsearch. worldbank. org/servlet/Site. Search. Servlet? q=risk%20 pooling

Employer-Based Tax Subsidy, by Household Income, 2004

How Much Change is Needed?

Contact: Greg Scandlen Consumers for Health Care Choices www. CHCChoices. org 301 -606 -7364 Greg@CHCChoices. org