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Addressing the Needs of the Uninsured in a Challenging Economic Environment (continued)

Len Nichols: That's right. That is a common assumption. Unfortunately, I think it is just relatively little known that the Medicaid programs in the United States don't typically cover the poverty population. We focus on children, first of all. Children are pretty much eligible now through SCHIP at least up to about 200 percent of poverty. But for sort of "garden-variety" adults who aren't parents, the income cut offs are well below poverty. Even women who are covered when they are pregnant are not covered after they are pregnant, after 1 month. Fundamentally we leave a lot of the poor on their own out there and that is what that slide reflects.

Cindy DiBiasi: Sam, let me ask you. Have access problems for the uninsured gotten worse over time?

Sam Zuvekas: Unfortunately it looks like it has. If you look at the graph that is now showing up, in 1977 it was more like a quarter of the uninsured had no usual source of care. Moving into 25 years later, or 20-25 years later, it is closer to 40 percent so access problems have definitely grown for the uninsured. In contrast, if you look for the insured population it has stayed fairly flat. In fact, people on public insurance programs, Medicaid and Medicare, it has actually improved a little bit.

Cindy DiBiasi: Paula, you spoke about reaching out to employers. Are there any important insights or messages that you gained from talking with the business community?

Paula Roy: Absolutely. I think there are a couple of things that we found along the way that is really important for States looking to get a handle on their own situation. That is, you can't look at this through the microscope of health insurance only. That is real important, but there are some other pressures going on out there for employers. In Delaware, at any rate, we are looking at rising Worker's Compensation costs. In the health provider community, particularly physicians in some places, we understand that medical malpractice insurance rates are going up. So there are other pressures going on out there in addition to rising health insurance premiums that just make it a real volatile situation and we think that is a real key to learning, we have got to take what we know about health insurance and put it in a bigger picture if we are going to do something about it.

Cindy DiBiasi: Are there business arguments to be made that if you don't help insure and if your employees aren't being insured, they are not accessing as many of the preventative pieces of health care so they may be out longer and ill longer, and affect productivity?

Paula Roy: That is absolutely true. Actually in Delaware we are doing that kind of thing with diabetes right now, doing some employer outreach saying it really makes sense for you to make your employees who have diabetes, give them the tools they need to manage their disease and it is going to be better for you.

Cindy DiBiasi: Len, this comes from Steven. He wants to know, do you have data about why families who have insurance available choose not to access that insurance?

Len Nichols: That is a very good question, and there has been a lot of work on that question both in the private market as well as in Medicaid. Let me start with what we know on the private side. Basically, about 85 percent of people who are offered private health insurance through their employer do end up taking it. So only about 15 percent turn it down. Of those who do turn it down, the primary reason is out-of-pocket cost. The primary reason is that compared to their income level, the out-of-pocket payment that is required of them by their employer is perceived to be too high. Now it also turns out that on average these people who turn insurance down are relatively healthy. They expect that they don't need health care in the short run and they know in a way it is sitting there at their employer for them to get later if they need it. In some sense this is a population that people don't worry about as much.

The more difficult conundrum are those who are eligible for public programs and don't sign up. Again, we think they are, at least compared to those who do enroll, relatively healthy so the good news is they probably don't need it as badly. It turns out if you are eligible for Medicaid and you show up in a hospital, you will probably end up on Medicaid before the hospital lets you go. It turns out it is in the hospital's interest to make sure they get paid for what they do for you.

There is a substantial portion of the population that does not sign up for Medicaid, some of whom are sick. I think all of us are constantly struggling with different ways to reduce barriers that they perceive. Partly it is application process. Partly it is stigma. Partly it is just fear of systems that are complex, particularly if you speak a different language.

Cindy DiBiasi: I know the numbers keep changing, but Jonathan from Arkansas is asking how many people in the United States are now uninsured?

Len Nichols: Roughly 39 million. We expect that to go up a little bit as a result of the recession, but I think reasonable estimates are it probably won't go above 41, it will be more like 40.

Cindy DiBiasi: Sam, what does it mean today to be a child and be uninsured?

Sam Zuvekas: In some sense, children who are uninsured fare a little bit better than adults on most of the measures we have looked at. There are still many kids who face significant and the same kinds of access problems as adults. If you look at this graph, you can see that 18 percent of uninsured children under the age of 5 lack a usual source of care. I think we need to be particularly concerned about this group because this is where children need to have well-child care to monitor how they are doing as well as getting their vacciNations. It's less of a problem it appears in adults in the sense that it is many fewer people that have access problems, but it is still a chunk of the population. A chunk of the uninsured children really seem to have access problems.

Cindy DiBiasi: Paula, Rhonda wants to know, how do you get hospitals to divulge their cost-shifting practices and how ultimately is it defined? This should be a good one.

Paula Roy: I will tell you what, the first cost-shift study we did, I will not tell you Rhonda that it was pretty or that it was easy, because it wasn't. In Delaware we have a couple of unique situations. One is that we don't have any public hospitals; we don't have any private, for-profit hospitals. So all of our hospitals are community, non-profit hospitals. We also have a tradition of being able to bring people together. Sometimes it is easier than others, depending on the subject. We had talked about cost shift as our de facto way of financing indigent care for a long time in Delaware. We had never quantified what that meant. We thought it was important to get some sort of a baseline so we really were able to do that through the healthcare commission and through some real strong leadership able to bring everyone together. There was obviously a lot of confidentiality involved. We brought in an outside firm with no Delaware basis to actually conduct the analysis for us. It gave us the baseline and we have been able to update it since then. It really is a consensus building and providing the leadership necessary to convince people to that it is important information to have.

Cindy DiBiasi: Now Len, you just gave us a number of 39-41, probably 40 million uninsured. When are these new numbers actually going to be announced?

Len Nichols: Typically the number that people focus on for better or worse is the Current Population Survey number because it has been around for a long time but also it is actually written into the SCHIP legislation that it is a survey that is used to track children. That survey is conducted in March of every year for the uninsurance question and they ask about the prior calendar year. So this month it is being conducted. We will know therefore, the answer to the question about calendar 2001 in September of 2002. There is about a 9-month lag.

Cindy DiBiasi: And please, we urge you again, please call in your questions or E-mail them in or just type into the text box because this teleconference is for you and answer your questions.

Gary from Hawaii would like to know, do you anticipate, this is an interesting question, do you anticipate a higher percentage of medium and high-income uninsureds this go-around given layoffs and...

Len Nichols: Yes, because like the results showed before from the prior recession, the people who tend to lose employer-sponsored insurance in a recession are those who had it before. They tend to be higher income folk and folk who are working in those higher wage jobs. So, yes, we do expect their proportion of the uninsured to go up. I also would caution you to note that this recession turned out not to be as deep as the one in '92 and not as long. I think it is unlikely that the effect will be as large as it was last time.

Cindy DiBiasi: Paula, the issue of the uninsured is certainly not new and that means that it is politically difficult to solve this problem. What are some of the challenges States should be prepared to face?

Paula Roy: There are a host of them. I think I have to start out by saying, if it were easy we wouldn't be spending 3 days doing a teleconference talking about it. [laughter] So I won't tell you it is easy, but I will tell you it is extremely important. I think first of all, you need to understand that there is not going to be one single solution and that the whole nature of the uninsured population is very diverse. There is no silver bullet in this. Again, we would have solved it by now. We have talked about healthcare costs increasing both in terms of premiums but actual real cost. The cost of medical care is increasing. Right now we are in an environment where the States have limited resources and that certainly poses a problem.

We are really making some progress with the health insurance flexibility and accountability initiatives, but I think up until now, States have really felt hamstrung by a multitude of Federal rules and regulations that have interfered with their flexibility and their ability to be as creative as they might want to be. And then understanding that we have different values. Different people see this problem differently. That is another one of the reasons it is not easy to pull this together. Certain types of initiatives may seem unfair to one group of people or another. For example, if one wanted to put together a program that subsidized some kind of insurance product for small employers that have not offered insurance before, the question becomes how is that fair to the small employer who has been struggling all through the recession to offer insurance and now here comes a product that he or she is perhaps not eligible for, those kinds of things.

You just have to think your way through it but those are some of the challenges you can expect to face.

Cindy DiBiasi: Do you see any indication that States are going ahead with or dropping plans to expand SCHIP to cover families?

Paula Roy: I think States are looking at using SCHIP to its fullest extent for a very practical purpose in the environment we are in right now. That is that the Federal reimbursement to States is higher than the Federal Medicaid reimbursement. Medicaid is a shared financing. Generally, it depends on the State, but generally it is for every dollar the State puts in, the Federal government puts in a dollar. With SCHIP it is 65/35 so that is a real incentive to look at ways to expand your SCHIP program.

Len Nichols: I think that is right. Paula is certainly right about the incentive but I think it is also interesting to look at different kinds of States are doing different things. Some States have used up their SCHIP allotment and could use more money. They are trying so hard to take advantage of the incentive Paula described. Other States still have money left on the table because they are not trying as hard. I think it has to do partly with, as Paula pointed out before, the different values in different States, different perspectives of this problem, how serious is it and I think that therefore you get very different responses out there. You see some States talking about cutting back benefits in order to expand the number of people who might be eligible. That is one of the interesting HIPAA proposals that are out there. That is a really interesting set of trade offs. Less coverage for more people. It is a very complex thing.

Paula Roy: Just to tease a little bit, when John Santa talks on Thursday I think you are going to hear more about that because I think Oregon is particularly interested in that. It is a real interesting question.

Cindy DiBiasi: Tomorrow when we are looking at State and local efforts to close the gaps between public and private insurance coverage we are going to be discussing it as well so it is a running theme.

Len, do you see Federal funding for access to care programs increasing?

Len Nichols: Not this year. I think it is fair to say that the Federal government is about to go into pre-election gridlock and it will be a lot of fun but not a lot of new stuff will happen. Call me bold, but that is my prediction for the year. The fact that the surplus went away so fast, the fact that we are indeed focused as a Nation on the external threat. The fact that the tax cuts, basically no one is talking about reversing them so they do see to be a fait accompli so the money that might be possible scraped together for a healthcare initiative is more than likely going to be targeted on Medicare Drug if anything. I think that is going to be in front of expanding coverage for this year.

Cindy DiBiasi: We have a question from Bridgeport, Connecticut. How many States offer low-cost health insurance to the uninsured and what types do they offer? Anyone?

Paula Roy: There are all different kinds of programs.

Len Nichols: I'm not sure I have the number. Vickie Gates would know the number tomorrow.

Paula Roy: Yeah, Vickie is really going to be your expert on that.

Cindy DiBiasi: OK. Well then tomorrow we will answer that question. Please from Bridgeport, Connecticut, call in again tomorrow.

While we wait for data on the uninsured to come out, what indications, economic or otherwise, can give policymakers more of a real time sense about the rates of uninsured in their jurisdictions?

Len Nichols: That is a good question. I think it is fair to say that this kind of phenomenon will show up first in the local emergency rooms and public hospital outpatient departments. That is, if they see a significant increase in the amount of their business, then you can know that the number of the uninsured or the proportion of the uninsured is rising in your community. It will vary across the Nation. Unemployment rates vary across the Nation quite a lot, as do uninsurance rates. So it may very well be in some parts of the country a real problem. In other parts of the country not noticeable at all.

Cindy DiBiasi: Let me open this up to everybody on the panel. Can't individual insurance policies cover a large number of the uninsured?

Paula Roy: I think, just from my perspective, purchasing insurance in the individual market is very expensive. I mean a whole concept of insurance, I defer to my two accountants here, but it is shared risk and pooling and if there is nowhere to spread the risk, the product becomes very expensive. That is particularly true for people who have some kind of a chronic condition. It is just a very expensive option would be my...

Len Nichols: I would jump in and just suggest that it is expensive. But I think it is probably the case that it could work well for about 75-80 percent of the population. That is to say, most of us are healthy most of the time. This is the good news. For those people, they can buy reasonably priced policies out there. They won't be nearly as generous as comprehensive, as the employer-sponsored policies because individual insurers have to be more careful about adverse selection, that is, people coming to them only when they are really sick. But again for the 75 percent that are healthy, everything is fine.

For those who do have a problem, however, Paula is absolutely right on. There was a very recent report done by a group at Georgetown which took hypothetical conditions and asked insurers what they would charge them if they would indeed sell them a policy at all. It was astounding to me personally as an economist to see the range of prices, the range of prohibitions that the insurers put on what they would cover for things like hay fever. They wouldn't cover anything with the respiratory system. That is a little extreme.

Sam Zuvekas: I would just add that even for that group that is 75-80 percent that Len said could purchase relatively cheap plans, these plans are typically going to be less generous than what they would be able to get through employers. They might be a high-deductible plan where they might have to incur $3-4,000 in medical expenses which can really hit a family or a person who is earning just a minimum wage.

Len Nichols: But it is kind of interesting to me in a way. I would say this is where the rubber meets the road on the different philosophies about how to solve this problem. There are people who wake up in the morning and think more people should be more responsible for more of their own activities and therefore they should have less generous coverage, have higher deductibles and co-pays, but have access to reasonably priced coverage beyond that high deductible.

Other people think everyone should have first dollar coverage. No one should ever be denied any care anytime, 24/7, da, da, da. At Mayo, it turns out that is expensive. So the tradeoff comes down to where your values are.

Cindy DiBiasi: Not to plug an upcoming teleconference, but I am going to. For people who are more interested in this subject, there is going to be another ULP sponsored Web-assisted teleconference on the individual insurance market and we are going to be doing that on April 24.

From Jonathan in Arkansas, he would like to know what should States do to prevent an increase in the number of people uninsured during a recession?

Len Nichols: That is a great question and I think that is the same Jonathan that asked the previous question so he is doing well. He's two for two today. I would say one very interesting phenomenon that comes out of the data which I reported and that is if you look how in the previous recession families dropped family coverage and switched to single coverage because that is all they could afford, presumably when one worker lost their job. Then think about the waiting periods that were imposed on SCHIP programs, that is to say in the name of preventing so-called "crowd out" or people switching from private to public coverage. Most States, in fact the Federal government required States to put in a requirement that stated you had to be uninsured for a certain number of months. I think it was 12. Well, it turns out a 12-month wait when you are being laid off from job and you lose your employer-sponsored coverage is basically the length of a recession. So you prevent SCHIP from being able to solve the short-run, temporary recession-based problem, which is precisely the problem that we have today.

I would submit in a recession, and you can let the gurus in New York or Washington define it for you, but when a recession starts take those firewalls away. Take those wait periods away. That is the single quickest thing you could do to solve the problem.

Cindy DiBiasi: Paula, let me ask you. If you worked to keep the issue of the uninsured on policymaker's radar screens, what are some of the toughest challenges that you are facing in getting the message across?

Paula Roy: Well, sometimes I find it is amazing because we have talked about it so much here. For some people there is still a disconnect between access to health insurance and improved health status. We find at least in our State and I don't think we are all that different in this regard, will tend to look at a health disparity or a particular health problem and want to analyze it and want to figure out what to do with it. Well, whether it is cancer or high infant mortality or high diabetes mortality rates, eventually you always come back to the access to care question. From time to time it is difficult to put the, we need to worry about health insurance or access to some means of paying for appropriate healthcare so that those health outcomes or that health status improves. For those of us that think about it every day it is a no-brainer, but for people just coming into the issue it is a challenge.

Cindy DiBiasi: We do appreciate you E-mailing your questions into us. They are very good questions and giving us a lot of fodder here for discussion. We would love to have you call us. We would love to hear you, I know it is a teleconference and it is Web-assisted, but nothing like the good old telephone to talk. We could actually have some discussions with people.

Sam, you know there is a group, a philosophy out there that if we just insure everybody then we have done away with the access problem, it isn't an issue anymore.

Sam Zuvekas: Unfortunately, I don't think that is the case.

Cindy DiBiasi: Oh well, we tried. [laughs]

Sam Zuvekas: First of all, I already alluded to this that not all insurance coverage is full insurance coverage. With many plans, even employer-sponsored plans, people can face significant financial risk if they have a catastrophic illness in their family. Someone gets cancer, perhaps diabetes.

But cost isn't the only issue when you are talking about access and paying for healthcare services. There are all kinds of other non-financial barriers to treatment that people face. These play into some of these disparities that Paula was talking about. There might be a lack of providers that are either available or willing to accept patients, let's say, that are on Medicaid or have one of the SCHIP programs. Certainly this is the case in rural areas as well as the inner city. Transportation issues, childcare issues for working mothers in particular. Getting time off of work so they can go see a provider, having providers that have office hours on nights and weekends. All of these are sort of the more non-financial issues that can play in.

In some of the analyses I have done with some colleagues here at AHRQ, we found that income and health insurance do make a difference in sort of looking at disparities between groups, but there are a lot of disparities that aren't explained by income and health insurance, differences between say Hispanics and whites or blacks and whites. This is strongly suggested. It is not just an issue of health insurance.

Cindy DiBiasi: Just a reminder, I have been asking people to call in but we are forgetting to tell them that they have to dial "14" on their touch-tone pad keyboard to ask a question on the phone, their phone keyboard.

We have got a couple of questions from Alaska actually, some good questions. I am going to go through them really quickly because we are actually going to be discussing them tomorrow but just to give you an idea of what tomorrow is going to look like. The question is, have you studied the amount of deductible and premiums on access to healthcare? A person paying $800 a month for a policy with a $2,500 deductible may not be able to afford preventative care, medication or physician's visits. This is not just a problem for the poor and uninsured, which it is certainly not. We are going to be discussing more of this tomorrow.

Len, given what we know now, how might the impact of this recession differ from that of the last one in terms of who becomes uninsured?

Len Nichols: Well, I think the first major difference in this and the last one is that New England is more likely to be hit this time than last time. Certainly it is true that New York suffered the brunt of the 9/11 attack, but Massachusetts and Pennsylvania as well have higher unemployment increases than the Nation as an average. New York turns out to be actually on the average for the Nation as a whole. But New England will definitely go along with the country this time.

The second difference is, thankfully, that as SCHIP and Medicaid have both been expanded since the last recession to the degree that SCHIP programs are out there with unspent money, they are going to potentially be a help. By the way, we got a correction from my last answer, which is very helpful from Chad from wherever you are. You didn't tell us the State. But it turns out I misspoke or mislead. States typically don't require a waiting period for those who are involuntarily separated from insurance. That is good. That means that if you are laid off from your job and you lose your coverage, then the children should theoretically should be eligible for SCHIP if the State can take the people. So that is very good. SCHIP will help buffer that to some degree.

Probably the other factor that is extremely important this time compared to last time is the labor market has been tighter for far longer. If there is one theme in the research that I have done over the years about looking at employer decisions to offer health insurance to workers and so forth. It is that employers offer health insurance when they have to, to compete for workers. It is not some benefit that is sort of a birthday present for the favorite employees. It is what is done in competition because in fact the labor market demands it. When labor markets are tight, more and more firms have to offer it to compete. They have been tight for a very long time. Because the recession was relatively shallow, most firms who had begun to think about maybe dropping are going to find their business is picking right back up and so they are not going to be in the same position they were in the early '90's where everyone was laying people off and everybody was dropping coverage. I think in fact we are likely to see less severe increases this time.

Cindy DiBiasi: What is the standard when you have employee health insurance? What is the standard contribution employees have to make? Is there a number or a percentage?

Len Nichols: Well, typically for single coverage, for individual coverage of the worker alone, employers pay about 80-85 percent; for family coverage they typically pay about 70-75 percent.

Cindy DiBiasi: Here is a question for everyone. Given the difficulty of covering the uninsured in a recession or at anytime for that matter, should we be focusing more on strengthening the safety net and the safety net services? Does this achieve the same objective?

Paula Roy: Absolutely. That is why when I talked about health insurance earlier I backed up real fast and said or access to appropriate care or a way of financing it. That is a point that Sam made too. Insurance alone isn't the answer. What we really need to do is find ways to get people into appropriate care and not expensive emergency department care. Focus on maintaining one's health in whatever way that happens. In fact, through our whole planning process, and particularly because of our community healthcare access program, we have learned that the safety net plays a very vital role and has forced us to actually amend what we see as the ultimate solution and say it's a blend of some kind of insurance program and supportive safety net. So absolutely, right on target.

Cindy DiBiasi: Sam?

Sam Zuvekas: I am going to reinforce both what Paula and what Len has said is that when a recession comes it is not uniform across the country in terms of who gets unemployed and who loses insurance. It is likely to be concentrated in particular areas and that can put real pressure on the safety net providers that are already there and really strain their capacity to provide services. Trying to think about where you need to target your resources when recessions occur and when you have rising uninsurance, it is looking not just in aggregate, but where it is occurring.

Cindy DiBiasi: We have a caller from Ohio. Kathryn is on the line, hello?

Kathryn: Hi. I represent that safety net and that is why I started to ask my question in my head before the last two speakers talked about how important the safety net is. I am in the public health department. We have a well-child immunization and prenatal. Actually, a couple of years ago the government decided, both Federal and State, that we probably should become an acronym and fade away. Every year we get less and less money and every year we have more and more people. We did 28 percent of the local births last year here in this clinic. I was at a press conference that Sharon Brown was at, Representative Sharon Brown and he, someone said that we have had a 75 percent increase in free clinic applications in Lorain County compared to January to March 2001. Yet the money is not forthcoming to us. We are encouraged to continue to do more with less and to certainly get these people enrolled and get them doctors. I would have to second and third and fourth the motion that says that a Medicaid card does not get you a doctor. I guess my question is can you get us more funds?

Cindy DiBiasi: I am very impressed by your 28 percent birthing ability [laughs].

Len Nichols: And the 75 percent increase in the applications is also a very good indicator, that Bell Weather indicator of the fact that the uninsured are greatly increasing in your area. The good news I would say is that the President's budget has in it increases for community health centers in general. I would say his spokespeople have always made that a pillar of his approach to healthcare that is not just insurance. I think...

Kathryn: I would have to counter with that is community health centers and we are public health. Public health doesn't get separated out from that.

Len Nichols: I don't doubt the fact that you do need increases. I am just suggesting in general that the awareness is there. I would think perchance you are getting some bioterrorism money somehow in some of this budget and maybe you can use some of that. Steal, beg and borrow and get some women OB/GYN's but I will turn it over to Sam for that.

Kathryn: [laughing] We are having trouble getting that at all.

Sam Zuvekas: I will duck that since I am a researcher. [laughter]

Kathryn: That money is going to go to the State. I have one more question before I lose [unclear]. Are the assessment tools that you address, the lady from Delaware and the survey instruments, are those tools that are available?

Paula Roy: Yes they are. Particularly the CAHPS®, that is the Consumer Assessment of Health Plans survey. That is a standard tool so that is readily available. I understand that I am getting some information right now that I will pass on to you. If you contact our friends, our wonderful sponsors here at the Agency for Healthcare Research and Quality at that you can then from there be directed to the CAHPS® survey tool.

The surveys that we do on the uninsured and the total cost and the employer survey I think we would probably be able to share that with you but it was something that we developed locally. It is not a standard survey tool.

Kathryn: Thank you.

Cindy DiBiasi: Thank you for calling. Chad, the Utah SCHIP director has a question asking is it a safety net issue or a cost issue? How do you reduce health care costs overall, thus creating greater access?

Paula Roy: Chad, I think we all probably all want to jump in on this. Certainly there is no doubt about the fact that we are spending more on health care. I think one of the things that we all have to figure out is how much we want to spend on health care and how we want to spend it. For the most part, most people are shielded from the true expensive health care and with each new technological development, each new pharmaceutical coming online, demographics, and the baby boomers aging. All those things point to increased health care costs. That is just something we have been unwilling to come to terms with as a Nation.

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