Incremental strategies for providing health insurance for the uninsured. Projected federal costs and number of newly insured.

OBJECTIVE

To present several incremental strategies for extending health insurance coverage for segments of an estimated 40.6 million uninsured persons in the United States. Along with these strategies, the federal costs and estimates of the number of newly insured are presented.

DESIGN

Using data from the Congressional Budget Office and the federal government, the number of newly insured persons in the United States under options designed to increase coverage among uninsured children, their parents, and workers between jobs are simulated. The federal costs and coverage implications of these options are estimated for federal fiscal years 1998 through 2002.

METHODS

Three distinct incremental approaches for covering the uninsured are explored. The first approach would expand coverage through the current Medicaid program. The second approach would provide financial incentives for parents of children eligible for Medicaid to purchase coverage, and the final approach provides time-limited subsidies allowing workers and their families to purchase insurance when they are between jobs.

MAIN RESULTS

The federal costs of these approaches range from $2 billion to $3 billion per year (enrollment outreach approach) to $5 billion to $7 billion per year (enrolling parents of Medicaid-eligible children approach). If pursued simultaneously, the incremental strategies under investigation could extend health insurance to more than 7 million uninsured persons in the United States. The cost of these options could be financed through Medicaid savings, restructuring the current disproportionate share payments made through Medicare and Medicaid, increasing excise taxes on tobacco, or all of the above.

CONCLUSIONS

The incremental strategies would build on the current US health care delivery system by providing targeted financial assistance to specific populations. By their nature, such reforms could provide a political means for compromise and agreement between Congress and the president. Though the reforms do not, by design, provide a comprehensive solution to the problems facing the uninsured, they would address the severe problems facing many low- and middle-income families unable to purchase health insurance today.