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6 Conclusions and Recommendations The charge to the Committee on the Consequences of Uninsurance was “to communicate to the public and policy makers analytical findings about the mean- ing of a large uninsured population for individuals, families, and their communi- ties, as well as for society as a whole. Its reports should contribute to the public debate about insurance reforms and health care financing.” Based on the findings of its first five reports, the Committee concludes that: • The number of uninsured individuals under age 65 is large, grow- ing, and has persisted despite periods of strong economic growth. • Uninsured children and adults do not receive the care they need; they suffer from poorer health and development, and are more likely to die prematurely than are those with coverage. • Even one uninsured person in a family can put the health and financial stability of the whole family at risk. • When a community has a high uninsured rate, this can adversely affect its overall health status and its health care institutions and provid- ers, and reduce the access of its residents to certain services. • The estimated value across society in healthy years of life gained by providing health insurance coverage to uninsured persons is almost certainly greater than the additional costs of providing those who lack coverage with the same level of services as insured persons use. Because having health insurance improves access to appropriate and timely services and access is related to better health, insurance is a key to improving the country’s health. The evidence in the Committee’s reports on the problems 153

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154 INSURING AMERICA’S HEALTH related to uninsurance leads to a logical conclusion—that the interests of our nation and its residents are best served by adopting policies that result in everyone having coverage. Chapter 3 of this report highlights a century of unsuccessful attempts to insure the nation’s populace. It also documents efforts that incremen- tally extended coverage at the federal, state, and county levels. While these efforts have provided insurance for millions of people, they have fallen short. Indeed, more than one of every six Americans under age 65 report they are uninsured for the previous year and the uninsured rate is growing (Mills and Bhandari, 2003). One in three Americans had a period of at least one month without insurance during a two-year period (1996–1997) (Short, 2001). Incremental approaches that are geographically limited, narrowly targeted to a subgroup of the uninsured, temporary, and commit too few new dollars are inadequate to address the problem at hand. Major reform is needed to make universal coverage a reality. Policy change at the federal level is essential because: • Federal resources are greater than those available at the state and local levels and can be directed to areas of greatest need. • Nationwide standards are essential for establishing a uniform minimum level for coverage and benefits, while individual states can provide higher levels if they choose. States are limited by the Employee Retirement Income Security Act of 1974 (ERISA) in their implementation of changes related to employment- based coverage. Although implementation can be phased in over time, viable reform pro- posals will need to go beyond the limits of just incremental expansions of existing programs to include an explicit goal and a coherent plan to achieve coverage for everyone, integrated structural changes to correct existing gaps and inefficiencies, and a definite schedule for making measurable progress required to achieve uni- versal coverage within a reasonable timeframe. Most importantly, major reform will require strong, bipartisan political support. The Committee concludes that universal health insurance coverage for everyone in the United States requires major reform initiated as federal policy. To facilitate the process of achieving coverage for everyone, the Committee identified principles and policy criteria that can be used to assess the merits of various reform strategies (see Box 6.1). We recognize the essentially political nature of the policy choices that must be made and do not endorse or reject specific reform approaches. The criteria, formulated as Committee principles, are discussed in Chapter 4 and reiterated briefly here.

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155 CONCLUSIONS AND RECOMMENDATIONS PRINCIPLES TO GUIDE THE EXTENSION OF COVERAGE 1. Health care coverage should be universal. 2. Health care coverage should be continuous. 3. Health care coverage should be affordable to individuals and families. 4. The health insurance strategy should be affordable and sustain- able for society. 5. Health insurance should enhance health and well being by pro- moting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable. The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for expanding coverage to everyone. All of the prototypes discussed in Chapter 5 come closer to satisfying the principles than does the status quo. Each could be improved by adjusting various components. Elements from one prototype may be combined with another to maximize the impact or minimize costs. Also, the comprehensiveness of the benefit packages would be weighed against the costs and expected improvements in health. The Committee’s intent is not to recommend or reject a particular strategy or to present a specific blueprint, but rather to articulate the principles that should be used to assess various insurance strategies. The Committee believes, however, that the universality principle necessitates an approach that incorporates mandates. Any proposal for reform inevitably will shift burdens and benefits of health care financing. Depending on the approach selected, those shifts could substan- tially exceed the actual increase in spending required to cover the uninsured population. While recognizing that financial resources for health care are limited and that shifting current burdens and benefits may be objectionable to those comfortable with the status quo, the Committee believes nonetheless that univer- sal coverage will enhance the overall health and well-being of the nation. Antici- pating the political ramifications of the redistributive impacts of a reformed health insurance strategy is beyond the scope of the Committee’s charge. The inevitabil- ity of such shifts is not a reason for inaction. We must acknowledge the need to restructure health care finance fundamentally in order to extend coverage to everyone. Significant new public policies will be necessary to address the issue of uninsurance. Additional public resources to finance insurance will be needed as well, although these may be reduced or offset by savings elsewhere. The Commit- tee recognizes that the American public in the past has been reluctant to support coverage for the uninsured because it would likely entail additional taxes or a major shifting of budgetary resources. A more complete understanding of the great

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156 INSURING AMERICA’S HEALTH costs we are incurring as a society because of the lack of universal coverage might overcome this reluctance. Although some of the existing payments for care for the uninsured might be shifted into a new, comprehensive program, we also recognize that it is highly unlikely that all current expenditures would become available to support a new program. The Committee recognizes that a program of universal coverage will take time to develop, adopt, and implement. The political and administrative com- plexities and financing challenges of implementing even the simplest model should not be underestimated. The Committee therefore urges that planning, including an aggressive timetable, begin immediately, with the goal of universal coverage by 2010. The Committee is optimistic that the task is achievable by this date and that it is a reasonable target. This date is consistent with the federal government’s Healthy People 2010 initiative to increase the years and quality of life nationally and eliminate disparities in health among population groups (DHHS, 2000). The first objective of the initiative’s Access to Health Care goal is to increase the proportion of the population under age 65 that has health care coverage; the target is 100 percent coverage by 2010 (DHHS, 2000). Like any major tax law or other social program reform, transitions for large and even small changes in health care finance can be costly. Any plan for phasing in universal coverage should recognize that change in the current health insurance system will be complex and potentially confusing. Thus, the coherence and sim- plicity of a minimal number of transitional stages are important goals for a phase- in strategy. The Committee recommends that the President and Congress de- velop a strategy to achieve universal insurance coverage and estab- lish a firm and explicit schedule to reach this goal by 2010. Because full insurance coverage for the whole population will take time to achieve, several actions should be taken to prevent further erosion of existing public insurance programs. During the current economic downturn, many states and municipalities are experiencing reduced revenues. This fiscal crisis is intensi- fied by rising health care costs and insurance premiums and by growing numbers of unemployed residents who are uninsured and eligible for public coverage (Smith et al., 2003). As a result of budget shortfalls in 2002, many states are planning significant cutbacks in the State Children’s Health Insurance Program (SCHIP) and their Medicaid program, which is the second largest line item in most states’ operating budgets (Schneider, 2002; KCMU, 2003b). Generally, those cutbacks had not been implemented by April 2003, but future cuts are anticipated (KCMU, 2003c). With 50 million nonelderly persons enrolled in Medicaid and another 5.3 million in SCHIP, it is important to assure funds for continued coverage and to expand enrollment in periods when more people meet existing eligibility criteria (CMS, 2003a; KCMU, 2003a). It is also important to remember that the original authorization and appropriation for the SCHIP program was limited to 10 years and is due to expire in 2007. Provisions for its continuation will

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157 CONCLUSIONS AND RECOMMENDATIONS be necessary if the reform strategy is not fully implemented by that date. Other- wise, the population served by the current program will become uninsured. The Committee recognizes the current economic pressures on all levels of government. More enrollees will require additional funds. An estimated 3 million lower income adults are currently eligible but not enrolled in Medicaid, represent- ing 16 percent of all lower income adults (Schneider, 2002). Another 4.3 million children are eligible for Medicaid or SCHIP, but not enrolled (Kenney et al., 2003). If these people were covered by the existing programs, the uninsured population would be significantly reduced. Getting people enrolled in these public programs is necessary but not sufficient; keeping them in the program is also important. Medicaid can be difficult to obtain and hard to keep. While most states have implemented administrative changes to facilitate enrollment, in the face of serious budget constraints some states have taken steps to curtail outreach efforts, limit eligibility of parents, and rescind 12-month continuous eligibility for chil- dren (Ross and Cox, 2003). Efforts should be taken to reduce the number of people without coverage because of complex enrollment procedures and adminis- trative barriers or obstacles. Individuals earning less than the poverty level are particularly likely to lose health insurance, whether public or private. About 19 percent of children and 17 percent of adults who are covered by Medicaid at the start of the year lose that coverage during the year, even though many remain eligible (Ku and Ross, 2002). Among low-income people with private coverage, 13 percent of children and adults who start the year with coverage lose it before the end of the year. Continu- ous coverage for those who are intermittently insured could reverse some of the negative consequences of uninsurance. While many states have provided outreach and streamlined enrollment and reenrollment procedures for SCHIP, there has not been as much progress in the Medicaid program, for which two-thirds of uninsured children are eligible. The Committee recommends that until universal coverage takes effect, the federal and state governments provide resources sufficient for Medicaid and SCHIP to cover all persons currently eligible and prevent the erosion of outreach efforts, eligibility, enrollment, and coverage. The public coverage programs are critical for those who otherwise would be uninsured. For those who currently are uninsured, it is important to maintain the existing capacity of health care institutions and providers who often make needed services available. The disruptions of transition to universal coverage for those providers and institutions should be minimized. The Committee also recognizes that problems of access to health care will remain in some geographic areas and for certain populations. Insurance coverage will reduce but not eliminate the need to support service capacity in certain underserved areas and for particular underserved populations. The Committee believes we all have a stake in how these recommendations

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158 INSURING AMERICA’S HEALTH are implemented as well as whether or not they are implemented. Currently all Americans bear the costs of a sizable uninsured population: • the ill health, impaired development, and early deaths of the uninsured, measured as the lost value of healthy life years; • much of the costs of care provided to the uninsured; • the financial instability of all families with at least one uninsured member; • the negative impact on health care institutions and on the communities they serve; and • the diminution of democratic cultural and political values of equal respect and equal opportunity. Doing nothing to change current policies carries substantial costs which will continue to grow in the future as health services become increasingly effective. Indeed, the underlying purpose of the Committee’s project has been to identify and increase awareness of the consequences associated with uninsurance, in the belief that an informed public will generate public policies to ameliorate the problem. The next steps require bipartisan political action at the federal level to move the process forward. Box 6.2 reminds us that this peculiarly American dilemma of health insurance reform has been with us a long time. Even more importantly, it reminds us of why we should delay reforms no longer. BOX 6.2 A Page from History The following text is from President Richard Nixon’s conclusion of his Special Message to Congress, February 18, 1971, in which he transmitted his proposal for health insurance reform. “It is health which is real wealth,” said Gandhi, “and not pieces of gold and silver.” That statement applies not only to the lives of men but also to the life of nations. And nations, like men, are judged in the end by the things they hold most valuable. Not only is health more important than economic wealth, it is also its founda- tion. It has been estimated, for example, that ten percent of our country’s economic growth in the past half century has come because a declining death rate has pro- duced an expanded labor force. Our entire society, then, has a direct stake in the health of every member. In carrying out its responsibilities in this field, a nation serves its own best interests, even as it demonstrates the breadth of its spirit and the depth of its compassion. Yet we cannot truly carry out these responsibilities unless the ultimate focus of our concern is the personal health of the individual human being. We dare not get so caught up in our systems and our strategies that we lose sight of his needs or compromise his interests. We can build an effective National Health Strategy only if we remember the central truth that the only way to serve our people well is to better serve each person.

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159 CONCLUSIONS AND RECOMMENDATIONS The Committee has demonstrated that through both good economic times and bad and despite decades of efforts to implement universal health insurance coverage, the United States has continued to have a large and growing uninsured population. Although there was a slight dip in the number uninsured in 1999 following several years of prosperous economic conditions, it was so small and temporary that it is clear that economic growth alone will not eliminate the presence of a large uninsured population. That population, because of lack of insurance, has experienced less or no access to needed health care. The benefits of universal coverage would enrich all Americans, whether accounted for in terms of improved health and longer life spans, greater economic productivity, financial security, or the stabilization of communities’ health care systems. We all benefit as well because health insurance contributes essentially to obtaining the kind and quality of health care that can express the equality and dignity of every person. Unless we can ensure universal coverage, we fail as a nation to deliver the great promise of our health care system, as well as of the values we live by as a society. It is time for our nation to extend coverage to everyone.

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