Solving the uninsured dilemma difficult

By ELLEN BECK, United Press International  |  Oct. 1, 2003 at 10:22 AM
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WASHINGTON, Sept. 30 (UPI) -- The uninsured ranks continue to grow -- up by 2.4 million from 2001 to 2002 -- and though there is no one solution to this national tragedy, the insurance industry is working to help the poor and small businesses as the government shores up Medicaid so states can handle more indigent beneficiaries.

These patchwork efforts certainly will not solve the problem, but helping small companies afford health insurance coverage for their workers, and making sure states have extra money for Medicaid -- the state-federal partnership that provides health care coverage for the indigent -- is a start.

The U.S. Census Bureau reported Tuesday the number of uninsured reached 43.6 million in 2002 -- some 15.2 percent of the population.

Overall, the poor economy, higher unemployment and rising healthcare costs are to blame, Leighton Ku, a senior fellow at the Center on Budget and Policy Priorities in Washington, told United Press International.

There is no national effort or one program aimed at reducing the ranks of the uninsured. There is talk of a one-payer system of national health insurance -- both mandatory and voluntary -- but with the Republicans in control of the White House and Congress these discussions are preliminary and tend to be short-lived.

Yu said Medicaid programs helped in 2002 by accepting 3.2 million more adults and the States Children's Health Insurance Program -- run by the states through Medicaid -- accepted 600,000 more children.

"It could have been worse -- twice as high or larger -- but for the fact Medicaid and SCHIP really proved an important safety net," Yu said.

Medicaid, at more than $225 billion annually, is the largest health insurance provider in the country, serving 50 million people, but states are facing severe revenue shortages and are cutting budgets to bring them into balance, as required by law in most states. Medicaid is paid for by state monies and matching federal funds.

Yu said a fiscal relief bill passed this year sent an additional $10 billion in matching funds to states faced with cutting Medicaid services or eligibility. Another $10 billion went to states in the form of grants, but these additional monies will expire in 2004.

"If the economy continues to be weak, this could bring about new troubles," he said.

Barbara Edwards, of Ohio's $9-billion-a-year Medicaid program, said the Census report "does a good job of reporting what we saw on the front lines" of the uninsured battle. In 2002, an additional 200,000 people entered Ohio's Medicaid program.

Edwards said the Ohio legislature had to rebalance the budget three times, but "worked to protect" Medicaid spending. The program was strong enough so while its own enrollment increased, there was no corresponding increased enrollment in the state's general welfare program.

Yu said the reason Medicaid was able to provide the safety net it did in 2002 was its spending was not capped, which had been proposed by the Bush administration.

"(A cap) would have created serious problems," he said, because states would not have been able to pay for increased caseloads. Instead, they would have had to pay for it without federal matching funds, or they would have had to cut other programs or reduce Medicaid services and eligibility.

Ron Pollack, executive director of Families USA, an advocacy group in Washington, told UPI small-business employers are the most squeezed by the combination of a poor economy and rising health care costs.

"The breadwinners for the overwhelming majority of working families that don't have health coverage are in small businesses," he said. "Hence, the concern of small business owners and their employees about health coverage is far more acute than for other businesses. Simply stated, if we are going to make headway about the uninsured, we must facilitate increased health coverage within small businesses."

Mohit Ghose, spokesman for the American Association of Health Plans in Washington, said the question facing the insurance industry is "how do we address the cost drivers" that make health insurance too expensive for small business. He said those drivers include:

--malpractice lawsuits brought against healthcare providers, which result in huge damage awards that drive up premiums;

--costly state and federal mandates for health care providers, and

--healthcare waste, fraud and abuse, which cost American taxpayers millions of dollars a year.

Insurers are trying to structure plans that reduce costs for employers but still give employees flexibility and choice.

"We're seeing more -- and especially smaller -- employers either reduce benefits or making the decision to drop plans altogether," Mark Mathis, of Humana in Green Bay, Wis., told UPI. Consumer-driven or consumer-directed plans have become popular, he said, but require employees to make informed choices and intelligent decisions about their healthcare needs.

Humana offers plans geared toward small businesses, defined as groups of 100 or fewer employees. One new feature of these plans is a reimbursement fund.

The Humana CoverageFirst plan, for example, gives beneficiaries $500 upfront to spend on healthcare services before any deductible applies. The resulting deductible is higher than usual -- $1,000 to $2,500 per person. But Mathis said Humana found some two-thirds of its members did not have more than $500 in healthcare spending per year.

He said after the deductible is met, a more traditional plan, such as a preferred provider organization, kicks in.

Humana also operates a pilot project in Illinois, Wisconsin and Arizona that pairs various plans with reimbursement funds, to which both the employer and employee contribute -- with advantages for each. Premium Manager Plus, as it is called, allows people to choose plans that fit their budget and their needs.

"It creates an incentive for people to take a good look at how they are using healthcare," Mathis said.

Karen Davis, president of The Commonwealth Fund in New York City, said Americans are becoming increasingly worried about losing employer-sponsored health coverage.

"Shoring up our system of employer-sponsored health insurance should be a priority in reversing the trend of rising numbers of uninsured," Davis said in a statement. "Better alternatives for businesses to buy coverage for their employees, such as opening up the Federal Employees Health Insurance Benefits Plan to small businesses and uninsured workers, and financial assistance to low-wage workers to help them afford coverage, would go a long way to support the system that remains the mainstay of health care in this country."

Blue Cross and Blue Shield plans in a number of states also offer programs for the uninsured, according to AAHP. For example, BC/BS of Montana offers a plan that provides enrollees with up to $10,000 in coverage per year, including six office visits, outpatient care, emergency room care and limited pharmaceuticals. It is priced at 40 to 50 percent of the average premium.

BC/BS of Alabama's Child Caring Program helps uninsured children, 18 and under, who are not eligible for government coverage. The plan is offered free for enrolled children with no premium contribution, deductibles or co-insurance.

The economy is picking up in 2003 but unemployment rates continue to rise. That, along with continued double-digit increases in healthcare costs lead experts to predict the number of uninsured will increase again next year.

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