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.

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.

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

Uninsured (percent of non-elderly population)1998 1999

Uninsured all yearSIPP 9.1 n/aMEPS 13.3 12.2

Uninsured at any time during yearSIPP 24.5 n/aMEPS 25.3 25.1

Uninsured at a point in timeSIPP 16.6 15.7MEPS 18.3 17.4NHIS 16.5 16.0CPS 18.4 16.2

(Source: Congressional Budget Office, May, 2003)

Counting the Uninsured

0102030405060708090

100

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

UninsuredInsured

Percent insured versus uninsured, 1987 - 2005

SOURCE: US Census Bureau, http://www.census.gov/hhes/www/hlthins/hihistt4.html

Counting the Uninsured

In fact, virtually everyone is insured for something, and no one is insured for everything.

Young males, age 21 - 24 are the least likely to have health insurance of any age/gender category (40.7% were uninsured in 2004).

But even they are usually covered for the things most likely to happen to them - auto accidents and workplace injuries.

Are they really “uninsured?” At the same time, people who are considered “fully insured”

are not covered for everything. 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.

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:

19.4% of Medicaid and SCHIP spent 10%+ 18.2% of privately insured But only 10.5% of the uninsured do

Is it best to be uninsured?

Defining the Underinsured

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

Where Does the Family Budget Go?

Sources of HC Spending

0

10

20

30

40

50

60

1960 1980 2000

Out-of-PocketPublic PayersPrivate 3rd Party

Rethinking the Issue

Considerations in Expanding Coverage: Who decides what to cover -- insurance

companies, employers, the government -- or consumers?

Adverse Selection versus Moral Hazard Insurance versus Third-Party Payment Risk Pooling versus Pre-Paid Health Care Pre-paid Health Care versus Post-paid

Health Care Premiums versus Benefits

Third Party Payment

Consumer

Insurer

Provider

Two-Party Contracts

Consumer

InsurerProvider

Employer

Consumer

Risk Pooling

Source: World Bank, 2004: http://extsearch.worldbank.org/servlet/SiteSearchServlet?q=risk%20pooling

Employer-Based Tax Subsidy, by Household Income, 2004

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

< $10 k $20-30K

$40-50K

$75-100K

Average

Fed. Tax Expenditure

How Much Change is Needed?

0%10%20%30%40%50%60%70%80%90%

100%

NZ Aus US Can UK

Complete

Fundamental

Minor Change

Contact:

Greg ScandlenConsumers for Health Care [email protected]