Health Care in America – Outlook For Change

The nation’s economic outlook is bright – unemployment is at an all-time low. income are rising, the poverty rate has declined, interest rates have plummeted – yet the number of Americans without health insurance is rapidly increasing.

In 1997, an estimated 43.4 million Americans, 16 percent of the population, had no health insurance. That is a 25 percent increase from 1990 when 34.7 million had no health insurabce.

Among the uninsured were 10.7 million children under 18, according to the U.S. Census Bureau.

Providing health insurance to these populations is an issue that states are attempting to address by increasing Medicaid coverage to more low-income families and children.

“Pieces of Medicaid are turning into something different,” said Jim Fossett, a health care finance and budgeting professor in the Public Administration Department at the State University of New York in Albany. He said that in many states, the program was being transformed to help the working poor as well as welfare recipients.

The Children’s Health Insurance Program or CHIP (Title XXI of the Social Security Act) was enacted as part of the Balanced Budget Act of 1997 to provide health insurance coverage for most of the nation’s 10 million uninsured children.

It gives states approximately $24 billion over five years to fund health coverage. States can choose to expand their existing Medicaid program, create a new state CHIP plan, or combine the two approaches. So far all states and territories except for Washington and Wyoming have submitted plans to the Health Care Financing Administration (HCFA). All of those plans have been approved except Tennessee’s.

Aging of Baby Boomers

The number of people 65 years and older will more than double by the middle of the next century to 79 million. The elderly are projected to increase from 12.8 percent of the total population in 1996 to 20 percent in 2030, and to remain at about 20 percent until 2050, according to the U.S. Census Bureau. This reflects the aging of the post World War II Baby Boom generation, persons born from 1946 to 1964. Because the elderly are staying healthier longer and requiring nursing homes at a later age, states want to find ways to increase the availability of services provided to the elderly and provide them with more home-based services so that they can live a functional, independent lifestyle longer.

Growth of HMOs Bring Pressure For More Regulation

More than one-third of people with health insurance, 34 percent, are covered by a Health Maintenance Organization, or HMO, according to data from National Research Corporation’s Health Care Market Guide Survey, 1997. As a type of managed care plan, HMO’s offer a lower-cost alternative to traditional, fee-for-service health insurance. HMO’s keep costs low through the use of various cost-saving strategies such as limiting access to providers by the use of gatekeepers, usually a primary care physician, who must give prior approval before enrollees receive services from other providers, such as hospitals and medical specialists. The most recently proposed legislation is to protect consumers from some of the least desirable features of managed care, such as the denial of certain forms of treatment.

Legislative Priorities

The top health care priorities of most state legislatures in 1999 will address constituent concerns about getting necessary medical treatment, supporting the independence and care of older persons in their homes and supplying health care to children, according to the National Conference of State Legislatures.

In an NCSL survey, every state said dealing with managed care problems in general was its number one priority. Thirty-one states expect to consider HMO liability legislation, and 22 of them will specifically consider establishing the right to an independent appeal when care is denied. Exceptions include Virginia, Kentucky, Tenessee, Arizona, Nevada, Idaho and Alaska.

Currently Texas is the only state to adopt strong legislation allowing people to sue their HMO. Since the Texas law went into effect in September 1997, only two lawsuits have been filed, according to the Texas Department of Insurance.

Forty-five state legislatures said they would introduce legislation addressing the quality, cost and dignity of long-term care services in the form of legislation on assisted living, quality of nursing facilities and the availability of prescription drugs to the elderly. The only exceptions on long term care are Idaho, Kansas, Arkansas, West Virginia and Delaware.

“Long-term care is a looming issue and a more comprehensive approach is occurring,” said Randy Desonia, director of Health Policy Studies at the National Governor’s Association.

Desonia said some states are experimenting with a version of managed care that tries to limit the amount of time that people spend in the hospital and nursing homes by finding ways to develop more adequate home care. Desonia said that some states are also trying to integrate agencies that provide services to the elderly.

In his State of the Union address in January, President Clinton proposed a 6.2-billion-dollar long-term-care initiative that would give a thousand-dollar tax credit to those receiving long-term care or for family members who provide that care.

States and governors will also be monitoring and evaluating the implementation of their children’s health insurance programs (CHIP). Thirty-three states expect to consider legislation to enhance or change insurance programs for the indigent, uninsured and working poor.

States NOT doing so are Alaska, Hawaii, Idaho, Wyoming, North Dakota, Nebraska, Minnesota, Missouri, Arkansas, Kentucky, Florida, Ohio, North and South Carolina, Maryland, Delaware and New Jersey.