The estimated 41 million Americans without health insurance registered prominently on HHS' radar screen last week as the agency proposed a series of initiatives to expand coverage and broaden access. If Congress adopts the proposals, the federal government would commit to spending more than $90 billion in the next 10 years to help reduce the number of uninsured.
HHS' initiatives, which are part of President Bush's 2004 budget proposal, will require strong cooperation from Congress, where a looming war in Iraq and debate over Medicare reform are likely to push aside other priorities.
Nevertheless, in what many industry observers called a "laundry list" of initiatives (See box, p. 16), HHS said it plans to address the uninsured with a multifaceted approach rather than some form of universal coverage, which President Bush and other Republican leaders adamantly oppose (See editorial, p. 20).
"Recognizing that far too many Americans still lack health insurance, we must move forward on many fronts to help low- and moderate-income Americans, especially children, get care and stay healthy," HHS Secretary Tommy Thompson said last week.
The proposals drew a mixed reaction in Washington and around the country, and surfaced the same week the Kaiser Commission on Medicaid and the Uninsured released new figures showing that total spending on the uninsured hit $35 billion in 2001. However, other newly released data showed that uncompensated-care spending in 2001 hit its lowest level as a percentage of total hospital expenses since 1983 (See story, p. 4).
Supporters of HHS' ideas said they represent an opportunity to make incremental progress on a confounding problem. Critics, especially some Democrats and advocacy groups, said a more far-reaching solution is required and that some elements of the HHS plan could actually diminish coverage.
A thorny problem
Debate on the issue may not reach the fever pitch it did in 1993 when former President Clinton pushed for a nationalized healthcare system, but the administration's proposals generated a spirited discussion among policymakers and analysts. The range of opinions showed the problem remains as divisive and difficult to solve as it was a decade ago.
"It's a complex challenge," said HHS spokesman Bill Pierce.
The uninsured comprise a vastly diverse group. They range from the unemployed and low-income workers to small-business employees, recent immigrants and even some middle-class young people who have chosen not to buy insurance yet. For that reason, Pierce and others argued, several different approaches are required.
Whatever plan is adopted "has to be a rich package of various alternatives dealing with the various circumstances the American public face," said Donald Young, president of the Health Insurance Association of America, Washington.
Renewed interest in the uninsured follows last year's strong push by the self-proclaimed "strange bedfellows" coalition, a diverse group of healthcare, business and advocacy organizations sponsored by the Robert Wood Johnson Foundation (Feb. 25, 2002, p. 10). The foundation and other sponsors said they will spend more than $10 million on "Cover the Uninsured Week," scheduled for March 10-16, a public awareness campaign that includes advertising and town hall meetings.
The new attention means a new argument over how best to address the growing challenge.
Perhaps the most controversial of the approaches HHS touted last week would allow states to alter the makeup of the nonmandatory Medicaid populations they serve without permission from HHS, which they must secure now. HHS argues that the proposal would help states decide how best to allocate federal Medicaid dollars during changing economic times-and would ultimately expand coverage.
A former governor of Wisconsin, Thompson argues that states will jump at the chance to make their own choices about how best to use limited resources.
According to policy analysts, however, states may use their new independence to expand the population eligible for some services but restrict benefits to prevent covering the most expensive care, including the cost of a hospital stay.
"Those dollars are on the hospitals' back," a Democratic congressional aide said.
Hospitals worried about payment
The American Hospital Association is concerned about several aspects of the Medicaid plan, including a proposed accounting mechanism that could imperil the disproportionate-share payments many hospitals depend on to treat large numbers of the uninsured.
"It's a troubling aspect of the proposal," said Molly Collins, senior associate director of policy at the association.
Coverage without hospital care may be better than no coverage at all, but "people don't think of policies with large holes in protection as insurance," said Ed Howard, executive vice president of the Alliance for Health Reform, a bipartisan Washington-based group that educates policymakers on coverage issues.
From HHS' perspective, "this administration would rather provide coverage to people and help them through tough times than simply let them go," Pierce said. "That's what states are doing today."
The Kaiser Commission study found that hospitals provided $23.6 billion, or about two-thirds, of the $35 billion in uncompensated care in 2001. Subsidizing insurance coverage, instead of paying for as much high-cost care, represents one way to begin tackling the problem, the study, published on the Web site of the journal Health Affairs, healthaffairs.org, concluded.
"Some share of these funds is potentially available for transfer to new government efforts to extend coverage to those currently uninsured" the study said, going on to suggest that Medicare and Medicaid payments are a "reasonable candidate for reallocation, especially since hospitals would be the primary beneficiaries of expanding coverage to the uninsured."
With bureaucratic and clinical waste responsible for 30% of healthcare charges, the delivery system itself could play a significant role in solving the uninsured problem, according to an employer advocate.
"None of the HHS proposals address the delivery system," said Becky Cherney, chairwoman of the board of the National Business Coalition on Health and CEO of the Central Florida Health Care Coalition, Orlando. "That's where the cost is. We keep fiddling with how we pay for (care) instead of what we get for it."
The HHS proposal does include a $169 million infusion for community health centers, an investment that would double their capacity. Cherney and others said that investment may modestly expand access but doesn't do a lot to address the core challenge of getting more people insured.
A taxing debate
The bulk of the president's plan centers on tax credits. His budget would spend $89 billion during the next 10 years on credits that would help low-income people buy coverage, reviving a plan the president pushed last year. A family of four with an income of less than $25,000 could receive up to $3,000 toward the purchase of an insurance policy; an individual earning $15,000 or less would qualify for $1,000.
"The health credits are not a big help," Cherney said, echoing other critics' concern that the tax credits won't do much good if a low-income family still had to pay nearly $5,000 to obtain coverage.
Young said some of the tax credits should be directed at helping the 80% of uninsured people "with ties to the workforce." Young would take the Bush proposal one step further, he said, by targeting assistance at people whose employers offer coverage with premiums too expensive to afford.
"It's important to give workers the opportunity either to purchase employer coverage or buy it on their own," Young said.
"I do believe tax credits are part of the answer," said Sen. Debbie Stabenow (D-Mich.), the Senate Democrats' new point person on healthcare issues (See News Makers, p. 33). "This is a small-business issue. Many of the uninsured are working. That's who we need to help."
Lawmakers will take up the issue of expanding insurance coverage no sooner than this summer, according to congressional sources. They said Medicare reform and a drug benefit will be the key health issues and both of those issues will be lined up behind war with Iraq, domestic security and a potential economic stimulus package to revive the faltering economy.
"There's not a lot of talk about the uninsured on Capitol Hill," the Democratic aide said. Others see room for progress, if not right away.
"We look at the administration's proposals as good, responsible, reasonable and doable," a Republican aide said. "Does that mean there's going to be a comprehensive bill that's ready for prime time? Probably not."
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