Appendix A
Executive Summary of the 2004 IOM Report
Insuring America’s Health: Principles and Recommendations

ABSTRACT

The lack of health insurance for tens of millions of Americans has serious negative consequences and economic costs not only for the uninsured themselves but also for their families, the communities they live in, and the whole country. The situation is dire and expected to worsen. The Committee urges Congress and the Administration to act immediately to eliminate this longstanding problem.


This report offers a framework for the public and policy makers to use as they weigh the pros and cons of various proposals. The framework consists of a set of principles informed by the research and analysis of the five previous reports in this series. The principles are applied to selected coverage prototypes to demonstrate the extent to which various proposals for extending coverage or designing new strategies to eliminate uninsurance would improve the current situation.

The lack of health insurance coverage for a substantial number of Americans has been a public policy problem throughout the past century and particularly over the past three decades. Three years ago, following a decade of strong economic growth but little progress reducing the number of the uninsured, the problem was urgent; 39 million people under age 65

NOTE: For a copy of the full report or any of the other five reports in the IOM series on the consequences of uninsurance, please visit www.nap.edu.



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Appendix A Executive Summary of the 2004 IOM Report Insuring America’s Health: Principles and Recommendations AbSTRACT The lack of health insurance for tens of millions of Americans has seri- ous negatie consequences and economic costs not only for the uninsured themseles but also for their families, the communities they lie in, and the whole country. The situation is dire and expected to worsen. The Commit- tee urges Congress and the Administration to act immediately to eliminate this longstanding problem. This report offers a framework for the public and policy makers to use as they weigh the pros and cons of arious proposals. The framework consists of a set of principles informed by the research and analysis of the fie preious reports in this series. The principles are applied to selected coerage prototypes to demonstrate the extent to which arious proposals for extending coerage or designing new strategies to eliminate uninsur- ance would improe the current situation. The lack of health insurance coverage for a substantial number of Americans has been a public policy problem throughout the past century and particularly over the past three decades. Three years ago, following a decade of strong economic growth but little progress reducing the number of the uninsured, the problem was urgent; 39 million people under age 65 NOTE: For a copy of the full report or any of the other five reports in the IOM series on the consequences of uninsurance, please visit www.nap.edu. 

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0 AMERICA’S UNINSURED CRISIS reported having been without insurance during the entire previous year.1 In 2000, the Institute of Medicine (IOM) formed an expert Committee on the Consequences of Uninsurance to study the issue comprehensively, ex- amining the effects of the lack of health coverage on individuals, families, communities, and the broader society.2 Now, after a significant economic downturn, 17.2 percent of the population under age 65 is uninsured and the number has grown to over 43 million. One in three Americans were uninsured for a month or more during a two-year period (1996-1997) (Short, 2001). Fewer people have access to coverage at work, more people find the costs of private coverage too expensive, and others lose public cov- erage because of changed personal circumstances, administrative barriers, and program cutbacks. The situation is even more dire now than when the study began and it is expected to worsen in the foreseeable future because of federal and state budget constraints limiting public coverage programs, increasing costs of health care and insurance premiums, and continuing high rates of unemployment. WHy SHOuLD POLICy MAkERS AND THE PubLIC CARE AbOuT COvERAgE? The Committee has conducted an exhaustive review of the scientific evidence on the consequences of uninsurance and finds that having no insurance decreases access to health services and reduced access to health care among the uninsured is associated with the poorer health. The lack of coverage is not only associated with negative effects on the uninsured individual but also has implications for the entire family of the uninsured person and the community in which he or she lives, and economic costs to society nationally (IOM, 2001a, 2002a,b, 2003a,b). In short, in a series of five reports the Committee concluded that: 1 The estimate of the uninsured is based on the Census Bureau’s annual March Current Population Survey (CPS), as all annual estimates of the uninsured population of the United States presented in this report, unless otherwise noted. The CPS may overestimate the number of uninsured for the entire calendar year and does not account for all who are uninsured for shorter time periods (CBO, 2003). See Chapter 2 for a discussion of who is uninsured, why, and for how long. 2 In this study, the focus is on people with no health insurance, such as “major medical” coverage for hospitalization and outpatient medical services, either for short or long periods. The Committee does not address underinsurance, that is, health plans that offer less than adequate coverage with excessive out-of-pocket payments, maximum benefit limits, or exclu- sion of specific services, such as mental health treatment. The problems of underinsurance are generally less severe than those of uninsurance, involve different policy issues and require the collection of different types of information. See further discussion in Chapter 2.

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 APPENDIX A • he number of uninsured individuals under age 65 is large, grow- T ing, and has persisted even during periods of strong economic growth. • ninsured children and adults do not receive the care they need; u they suffer from poorer health and development, and are more likely to die early than are those with coverage. • ven one uninsured person in a family can put the financial stabil- E ity and health of the whole family at risk. • community’s high uninsured rate can adversely affect the overall A health status of the community, its health care institutions and providers, and the access of its residents to certain services. • he estimated value across the populations in healthy years of life T gained by providing health insurance coverage is almost certainly greater than the additional costs of an “insured” level of services for those who lack coverage.3 guIDINg THE DEbATE In this report, the sixth and last in the series, the Committee presents its conclusions and recommendations, based on the findings of its previous five reports. It calls for action on the problems of uninsurance and hopes to stimulate informed discussion of the various proposals that have been put forth to extend coverage. By “extend coerage” we mean haing more people gain coerage who preiously had had none and reducing the un- insured rate. To guide future discussion, the Committee offers principles, supported by the research, against which proposals for extending coverage can be assessed. The Committee’s review of clinical, epidemiological, and economic research for its earlier reports revealed certain features of health insurance that contribute to better health outcomes for those who have coverage. These insights into what accounts for the greater effectiveness of “insured” health care are reflected in the principles the Committee presents to guide policy makers and the public in analyzing proposals or developing new strategies. The Committee does not recommend or reject any specific pro- posal. Rather it demonstrates, through the use of the principles, how each of a wide range of proposals would improve the current situation. 3 An “insured” level of services reflects the current average benefits under Medicaid or private health insurance for those under age 65.

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 AMERICA’S UNINSURED CRISIS ELIMINATINg uNINSuRANCE: LESSONS FROM THE PAST AND PRESENT Present-day efforts to reduce or eliminate uninsurance build on nearly a century of campaigns to bring about universal health insurance coverage. Past campaigns have yielded both incremental changes and major reforms but not universal coverage, due to challenges to major structural changes posed by American political arrangements and the lack of political leader- ship strong and sustained enough to forge a workable consensus on cover- age legislation. In addition, the opposition of provider, insurer, and business groups with economic interests potentially adversely affected by specific reform proposals has blocked universal coverage even though many have agreed with the general need for reform. In the early 1900s, health insurance was seen initially as a type of social insurance, justified as a means of protecting workers’ lost income when disabled or ill (Starr, 1982). By the 1930s it became a way to make health services more affordable for individuals and thus encourage utilization. Opposition to compulsory public insurance at the national level fed the development of private-sector nonprofit and commercial health coverage organized through the workplace. Between 1940 and 1960, the proportion of the general population with private health insurance grew from 9 percent to 68 percent (Bovbjerg et al., 1993). Reform efforts to extend public coverage to retirees and the poor, two groups unlikely to purchase private coverage and likely to have difficulty paying for health care, met with success in 1965 with the enactment of Medicare and Medicaid as amendments to the Social Security Act. These two new programs introduced tens of millions of newly insured persons, and billions of new public dollars, into the health care system. Campaigns for universal coverage in the 1970s and 1990s have been shaped by the tensions between the goals of enrolling greater numbers of people and controlling health care expenditures. Recent Federal Incentives to Extend Coverage Have Not Closed the Coverage gap Finding: Federal incremental reforms over the past 20 years have made little progress in reducing overall uninsured rates nationally, although public program expansions have improved coverage for targeted previ- ously uninsured groups. Federal reforms of employment-based insur- ance have not included provisions for assuring affordability and, thus, have had limited effect.

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 APPENDIX A Finding: Extensions of program eligibility for one group of uninsured often affect the coverage status of other population groups indirectly, for example, when State Children’s Health Insurance Program enroll- ment efforts identify children who are eligible for but not enrolled in Medicaid. Finding: Public programs fall short of their coverage goals when not all eligible persons enroll. When outreach and enrollment are made a priority, coverage levels rise. Public coverage programs sometimes em- ploy administrative barriers to enrollment to contend with inadequate or unstable during periods of economic stress within states. Health insurance coverage rates nationally reached their high point in 1980, when approximately 15 percent of the general population under age 65 was uninsured (Bovbjerg et. al., 1993). The percentage uninsured has not varied widely since then, but the number of uninsured people has grown substantially, to over 43 million, reflecting growth in the total population. Reforms since 1980 have made little progress in reducing the uninsured rate (Levit et al., 1992; Fronstin, 2002; Mills and Bhandari, 2003). Since the mid-1980s, however, major federal initiatives to extend both public and private coverage, many modeled after successful state programs, have improved coverage rates among lower income children (in households earning less than 200 percent poverty) and boosted the numbers of lower income persons with public coverage. Between 1984 and 1990, Congress gradually expanded Medicaid for pregnant women, infants, and young children, delinking coverage from welfare eligibility. These Medicaid expan- sions were followed in 1997 by the creation of the State Children’s Health Insurance Program (SCHIP), a 10-year, $40 billion allotment in federal matching and capped grants in aid to the states. The program reduced the number of uninsured children, though more than half of the remaining uninsured children are eligible but not enrolled (Broaddus and Ku, 2000; Dubay et al., 2002a; Kenney et al., 2003). Federal initiatives to extend employment-based coverage have targeted improved portability and continuity of coverage through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Health Insur- ance Portability and Accountability Act of 1996 (HIPAA), and the Trade Act of 2002 (TA). All three statutes attempt to preserve coverage for specific categories of transitioning and unemployed workers and their families, yet the lack of authority or resources under COBRA and HIPAA to make insur- ance premiums affordable has seriously limited their usefulness and impact. It remains to be seen whether the subsidized tax credit to be given to dis- placed workers and retirees under the TA’s authority will make premiums

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 AMERICA’S UNINSURED CRISIS affordable enough to increase coverage among the approximately 260,000 eligible persons (Healthcare Leadership Council, 2003). State and Local Initiatives to Extend Coverage Finding: The federal Employee Retirement Income Security Act of 1974 (ERISA) constrains the ability of states to mandate employment- based coverage, one strategy to extend private coverage within their boundaries. Finding: Although some states have made significant progress in reduc- ing uninsurance, even the states that have led major coverage reforms have large and persisting uninsured populations. Finding: States do not have the fiscal resources to implement fully their existing public coverage programs and are further constrained from eliminating uninsurance within their boundaries by categorical limits on eligibility for federally supported public coverage programs. Finding: Extensions of public or private coverage at the county level have focused on increasing coverage among targeted populations rather than the entire uninsured population locally. Despite the potential of local programs to fill targeted gaps, the lack of reliable funding source limits their scope and effectiveness. Historically some states have taken the lead in extending coverage, but state efforts alone have been insufficient to eliminate uninsurance within their boundaries and have had little impact on the overall, national unin- sured rate. This report highlights five states—Hawaii, Massachusetts, Min- nesota, Oregon, and Tennessee—that have invested significant funds since the mid-1980s to expand their public programs and in some cases have also regulated the small group and nongroup insurance markets to create more affordable options. In 1994, these states began using Medicaid Sec- tion 1115 waivers, without additional federal dollars, to broaden eligibility, with all but Tennessee folding in their own separate coverage programs for persons ineligible for Medicaid. Though all have made progress in extend- ing coverage, each state still has significant numbers of uninsured people. All states are limited by ERISA, which does not permit direct state regu- lation of coverage plans sponsored by private employers.4 States may not 4 In 1983, Hawaii received an exemption from ERISA, under the condition that the provi- sions of the state’s employer mandate not be updated.

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 APPENDIX A tax employer-sponsored plans directly, require employers to offer coverage, or regulate what they do offer. Addressing concerns about the substitution or crowding out of private coverage by new public programs has created administrative barriers to full enrollment of all eligible persons. The increasingly severe budget crises faced by the states beginning in 2001 have limited state reform and begun to erode coverage, although the prospect of losing federal revenue has motivated states to maintain much of their commitment to public coverage programs that receive federal matching funds (Smith et al., 2002; Boyd, 2003). State governments’ capacity to finance health care and extend cover- age tends to be weakest at times when demands for such support are likely to be the highest, for example, during an economic recession. Nonetheless, the growing unmet need for health insurance in recent years has catalyzed reform efforts in many states (IOM, 2003a). Many states designate their counties as the providers of last resort for the underserved and the uninsured (IOM, 2003a). Across the nation, a handful of counties has experimented with innovative ways to improve ac- cess to care using insurance or an approach that resembles health insurance to reduce the impact of uninsurance on their communities. The Committee looked at the experiences of three urban counties that have led reform, Almeda County (CA), Hillsborough County (FL), and San Diego (CA). These counties have reformed the organization, financing, and delivery of local health services, combining outreach and enrollment activities with new sources of revenue to support coverage. Serious financial constraints limit the scope and effectiveness of these programs and keep them from fully reaching their goals. Despite gradual expansions of public programs at the federal, state, and local levels and isolated efforts around the country to move toward the goal of universal coverage, the lack of political consensus has prevented a substantial reduction in uninsurance in the United States. Laudable efforts have been hindered by a lack of resources. The state and county programs described here are noteworthy but atypical; individual state and local ef- forts to extend health insurance will not achieve universal coverage nation- ally. In some states the size of the uninsured population is overwhelming and many states lack the resources to extend coverage substantially. The circumscribed nature of past and present initiatives suggests that attempts to provide universal coverage without a substantial infusion of new federal funds are unrealistic. Recognition of the need to treat the elimination of uninsurance as a national responsibility, as well as a state and local one, is essential to comprehensive reform of coverage. Conclusion: The persistence of uninsurance in the united States re- quires a national and coherent strategy aimed at covering the entire

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 AMERICA’S UNINSURED CRISIS population. Federal leadership and federal dollars are necessary to eliminate uninsurance, although not necessarily federal administration or a uniform approach throughout the country. universal health insur- ance coverage will only be achieved when the principle of universality is embodied in federal public policy. A vISION OF uNIvERSAL COvERAgE The Committee’s previous reports detailed the negative effects on indi- viduals’ health, family stability, community health care institutions and ac- cess of residents, and the national economy associated with the existence of a large uninsured population. This report reviews a century of efforts aimed at reducing or eliminating uninsurance. This report also examines various approaches to providing health insurance because the Committee believes extending insurance coverage is a worthwhile and feasible endeavor. Imag- ine what the country would be like if everyone had coverage—people would be financially able to have health problems checked, to seek preventive and primary care promptly, and to receive necessary, appropriate, and ef- fective health services. Hospitals would be able to provide care without jeopardizing their operating budget and all families would have security in knowing that they had some protection against the prospect of medical bills undermining their financial stability or creditworthiness. The Commit- tee believes that this picture could become a reality and that it is an image worth pursuing because the costs of uninsurance to all of us—financial, societal, and in terms of health—are so great. The benefits of appropriate and timely health care are potentially even greater and can help motivate attaining this vision. vISION STATEMENT The Committee on the Consequences of uninsurance envisions an approach to health insurance that will promote better overall health for individuals, families, communities, and the nation by providing financial access for everyone to necessary, appropriate, and effective health services. PRINCIPLES TO guIDE THE ExTENSION OF COvERAgE The evidence reviewed and developed by the Committee in its first five reports contributes to the shared vision and the following five key principles. The first principle is the most basic and yet the most important. The remaining four principles are not ranked by priority. Selected pieces of evidence are provided in the following discussion of the principles. (See

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 APPENDIX A the Committee’s earlier reports, Coerage Matters, Care Without Coerage, Health Insurance Is a Family Matter, A Shared Destiny, and Hidden Costs, Value Lost, and Chapter 2 in the full report, Insuring America’s Health, for more detailed discussions of evidence.) 1. Health care coverage should be universal. • veryone living in the United States should be covered by health E insurance. Being uninsured can damage the health of individuals and families. Uninsured children and adults use medical and dental services less often than insured people and are less likely to receive routine preventive care (Newacheck et al., 1998b; McCormick et al., 2001; IOM, 2002b). They are less likely to have a regular source of care than are insured people (Zuvekas and Weinick, 1999; Weinick et al., 2000). Insurance coverage is the best mecha- nism for gaining financial access to services that may produce bet- ter health. • ninsured people are less likely to receive high-quality, profes- U sionally recommended care and medications, particularly for preventive services and chronic conditions (Beckles et al., 1998; Cooper-Patrick et al., 1999; Powell-Griner et al., 1999; Ayanian et al., 2000; Breen et al., 2001; Goldman et al., 2001). • ninsured children risk abnormal long-term development if they U do not receive routine care; uninsured adults have worse outcomes for chronic conditions such as diabetes, cardiovascular disease, end-stage renal disease, and HIV (Hadley, 2002; IOM, 2002a,b). • ninsured adults have a 25 percent greater mortality risk than do U insured adults, accounting for an estimated 18,000 excess deaths annually (Franks et al., 1993a; Sorlie et al., 1994; IOM, 2002a). 2. Health care coverage should be continuous. • ontinuous coverage is more likely to lead to improved health out- C comes; breaks in coverage result in diminished health status (Lurie et al., 1984, 1986; Franks et al., 1993a; Sorlie et al., 1994; Baker et al., 2001). • chieving coverage well before the onset of an illness would likely A lead to a better health outcome because the chance of early detec- tion would be enhanced (Perkins et al., 2001). • nterruptions in coverage interfere with therapeutic relationships, I contribute to missed preventive services for children, and result in inadequate chronic care (Rodewald et al., 1997; Beckles et al., 1998; Burstin et al., 1998; Daumit et al., 1999, 2000; Hoffman et al., 2001).

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 AMERICA’S UNINSURED CRISIS 3. Health care coverage should be affordable to individuals and families. • he high cost of health insurance is the main reason people give for T being uninsured (Hoffman and Schlobohm, 2000; IOM, 2001a). Nearly two-thirds of people with no coverage have incomes that are less than 200 percent of the federal poverty level (IOM, 2001a). Families in that income group have little leeway for health expen- ditures, making some form of financial assistance necessary for obtaining coverage (IOM, 2002b). • mong families with no members insured during the entire year A and incomes below the poverty level, more than a quarter paid out-of-pocket medical expenses that were more than 5 percent of income (Taylor et al., 2001). 4. The health insurance strategy should be affordable and sustainable for society. • he Committee acknowledges that any health insurance strategy T will likely face budgetary constraints on the benefits as well as on the administrative operations. Any major reform will need mechanisms to control the rate of growth in health care spending. There is no analytically derivable dollar amount of what society can afford; that will be determined through political and economic processes. • he Committee believes that everyone should contribute financially T to the national strategy through mechanisms such as taxes, premi- ums, and cost sharing because all members of society can expect to benefit from universal health insurance coverage. • o help insure affordability, the reform strategy should strive for T efficiency and simplicity. 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. • nsurance should be designed to enhance the quality of the health I care system as specified above and recommended by the IOM’s Committee on Quality of Health Care in America (IOM, 2001b). • benefit package that includes preventive and screening services, A outpatient prescription drugs, and specialty mental health care as well as outpatient and hospital services would enhance receipt of appropriate care (Huttin et al., 2000; IOM, 2002a). • ariation in patient cost sharing could be used as an incen- V tive for appropriate service use because it can influence patient behavior (Newhouse and The Insurance Experiment Group, 1993).

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 APPENDIX A uSINg THE PRINCIPLES The Committee’s research on the problems related to uninsurance demonstrates conclusively that there are benefits for the nation and all its residents from eliminating uninsurance and ensuring coverage for everyone. Based on review of past incremental and disjointed efforts to extend cover- age, the limited progress made, and the remaining 43 million uninsured, The Committee concludes that health insurance coverage for everyone in the united States requires major reform initiated as federal policy. Achieving universal coverage across the country will require at a mini- mum federal policy direction and financial support. The new system would not necessarily be controlled wholly at the federal level or operated solely through a government agency. The Committee presents the preceding set of principles to be used in clarifying public debate about approaches to extending coverage. The principles provide objectives against which to measure various proposals. The Committee does not endorse or reject any particular approach to solving the problem of uninsurance, but recognizes that there are many pathways to achieving its vision. The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for extending coverage to everyone. To illustrate how the principles should be used to evaluate reform proposals, the Committee sketches four prototypes for major reform in a simplified format so that the main incentives are clear. It then assesses each prototype against each of the principles, highlighting the model’s strengths and weaknesses. These models all include aspects of strategies under dis- cussion in the public debate but are not detailed legislative proposals or specific strategies favored by particular politicians or advocacy groups. Brief outlines of the prototypes (discussed fully in Chapter 5 of Insuring America’s Health) are as follows . Major public program extension and new tax credit: No funda- mental change in private insurance, Medicaid and SCHIP merged and expanded, Medicare extended to 55 year olds, a tax credit for moderate income individuals. . Employer mandate, premium subsidy, and indiidual mandate: Em- ployers required to provide coverage and contribution to workers’ premiums, subsidy for employers of low-wage workers, individu- als required to accept employment-based insurance or obtain it privately, merged public program for those not covered at work.

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0 AMERICA’S UNINSURED CRISIS . Indiidual mandate and tax credit: Each person eligible for an ad- vanceable, refundable tax credit and required to obtain coverage in the private market, Medicaid, and SCHIP eliminated. . Single payer: Administered federally, everyone enrolled, single ben- efit package, global budget, no Medicaid, SCHIP, or Medicare. Each model meets some principles better than others and each prin- ciple may be more fully achieved by one prototype more than another. For example, the principle of universal coverage is more likely to be reached through any of the models with mandates than by the first prototype, which is entirely voluntary. Prototype 1 was included for completeness because it is an obvious approach currently under public consideration, although it would not achieve universality. The single payer model would most suc- cessfully eliminate gaps in coverage. The assessment of each model is fully discussed in Chapter 5 and summarized in Table ES.1. The affordability to individuals and families of each prototype would depend on the size of the subsidies or tax credits and cost-sharing require- ments, as well as eligibility levels for the public programs. The affordability and sustainability for society of each model would largely depend on the nature of cost controls in the system, sources of revenues, the amount of cost sharing, and the comprehensiveness of the benefit packages. Strong cost and utilization controls could affect access to services and health out- comes in ways yet to be determined. The Committee is mindful that defin- ing a minimum benefit package for the uninsured would likely also affect some people who currently have a lesser insurance package, increasing their benefits and resulting in additional costs and probably increased access to services and drugs and improved health outcomes. The potential of various models to enhance health through quality care would depend on the design of the benefit packages, the strength of the public programs, and effective consumer demand. There are shortcomings of each model, but each prototype could come closer to achieving the Com- mittee’s vision and be ameliorated with further refinement, and elements of different models could be combined to promote particular principles. Most importantly, each prototype could more nearly achieve each principle than does the current system. NExT STEPS The Committee recognizes that it will take some time to develop, adopt, and implement a program of universal coverage and that it will re- quire additional public resources to finance insurance. It will not be quick or easy to implement the necessary reforms and it will be preferable to phase in the changes according to a fixed schedule. Implementation should

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 APPENDIX A aim for a minimum number of transitional stages, each of which incorpo- rates changes that are as coherent and simple as possible. Despite a long history of failed attempts to achieve insurance for everyone, the Committee believes that universal insurance coverage is an important and achievable goal for the country. Instead of considering the status quo as everyone’s second choice when consensus on an approach to universal coverage fails to materialize, we should consider it the last choice. We cannot afford to ignore the problem of uninsurance. The Committee recommends that the President and Congress develop a strategy to achieve universal insurance coverage and to establish a firm and explicit schedule to reach this goal by 2010. The Committee recommends that, until universal coverage takes effect, the federal and state governments provide resources sufficient for Med- icaid and SCHIP to cover all persons currently eligible and prevent the erosion of outreach efforts, eligibility, enrollment, and coverage. The Committee is concerned that the current and growing economic pressures on state governments as well as at the federal level will have a negative impact on public programs and erode current coverage, making future coverage gains more difficult. Until everyone has financial access to health services through insurance, it is necessary to sustain current public coverage programs. It is also important to shore up the current capacity of health care institutions and providers who take a major responsibility for caring for the uninsured. Continuing support of service capacity, particu- larly in underserved areas, may be needed. The Committee appreciates that making a national commitment to achieve universal insurance coverage will require strong bipartisan political support as well as broad-based and deep public support. We all bear the costs of the current nonsystem that leaves tens of millions without health coverage. Doing nothing and maintaining the status quo with over 43 mil- lion uninsured Americans is expensive. The nation suffers losses due to ill health, impaired development, early deaths, and lost productivity. The lack of health insurance is a destabilizing factor in families and for health care institutions that serve uninsured patients. In fact, the presence of uninsur- ance creates insecurity for everyone, even those with health insurance today, because losing that coverage tomorrow is so easy. Universal insurance cov- erage will benefit all Americans, enhance the great promise of our health care system, and reinforce our values as a democratic society. It is time for our nation to extend coverage to everyone.

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 AMERICA’S UNINSURED CRISIS TAbLE ES.1 Summary Assessment of Prototypes Based on Committee Principles Prototype 1 Major Public Program Principles Status Quo Expansion and Tax Credit Coverage should be Not universal; Would not achiee universal  million uninsured uniersality because oluntary, but would reduce uninsured population Coverage should be Not continuous; income, Family- and job-related gaps continuous age, family, job, and in coerage health-related gaps in coerage Coverage should be Priate coerage More affordable than current affordable for system for those with low unaffordable individuals and to many moderate- or moderate income families and low-income persons Strategy should be All participants contribute; Not affordable or sustainable affordable and for society; uninsurance is aggregate expenditures not sustainable for growing; cost of poorer controlled; new public society health and shorter lives is expenditures for only the $65 billion-$130 billion; public program expansion some participants contribute; and tax credit; sustainability no limit on aggregate health public program depends on expenditures or on tax revenue sources and credit political support; size of depends on political support expenditures—spending is higher than other countries; sustainability of current public programs depends on economy and political support Coverage should Quality of care for the Opportunities to promote enhance health population limited quality improvements through high quality because one in seven similar to current system care is uninsured

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 APPENDIX A Prototype 2 Prototype 3 Prototype 4 Employer Mandate, Premium Subsidy, and Individual Mandate Individual Mandate and Tax Credit Single Payer Coerage likely to Depends on size of tax Likely to achiee be high; depends on credit, enforcement, and uniersal coerage enforcement of cost of individual mandates insurance Brief gaps related to Continuous until death or Minimal gaps life and job transitions age 65 Subsidy based only on Minimal cost sharing, but Yes for workers, assuming adequate income and family size could be problem for low employer premium leaves older, less healthy, income assistance; public and those in expensie areas program designed to with less affordable coerage be affordable for all enrollees All participants No limit on aggregate health Nearly all participants contribute; basic package expenditures or on tax contribute; aggregate expenditure, though federal expenditures controllable, less costly than current costs relatively predictable utilization not directly or employment coerage; revenue from patients in and controllable through size centrally controlled; high public program; sustain- of credit; sustainable through cost to federal budget; ability depends on revenue federal income tax base; size administrative savings; sources from employers’ of credit depends on political sustainability depends premium on assistance support on revenue source and and public program political support Potentially yes, depends on Could design quality Similar incenties to current priate insurance system; proper design incenties in expanded public program and basic consumer could choose benefit package; current quality plans employer incentives for quality remain

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