AcademyHealth Stateside - July 2005 (Plain Text Version)In this issue: New Study Examines the Effects of Potential Federal Coverage Strategies
In a recent Health Affairs article, authors Sherry Glied and Douglas Gould analyze how the variation in certain state characteristics has an effect on the impact of various federal strategies to increase insurance coverage. They begin by categorizing states by the percent of their population that is uninsured. For example, uninsurance rates (2000–2002) across states vary from 9.2 percent (Rhode Island) up to 26.3 percent (Texas). They further break down the uninsurance rate into two sub-categories: percent of the uninsured with incomes below 100 percent of the federal poverty level (FPL), and uninsured working for small firms. In addition, the study examines and categorizes states by local health insurance market factors, such as yearly non-group premium price, and current state income eligibility levels for public coverage. Taking into account the variation across the states, the authors model the impact of five different federal policies that target the uninsured: 1) Tax credits in the non-group market 2) Tax credits for small employers 3) Medicaid expansion to adults below 133 percent FPL 4) State Children’s Health Insurance Program (SCHIP) expansion to children below 300 percent of FPL 5) Medicaid expansion to parents of SCHIP-eligible children. They conclude that a particular policy may have minimal impact on the uninsured in one state but may have an extensive impact on the uninsured in a neighboring state. Each federal policy will affect each state in a different fashion. This research highlights several important lessons for the states. First, it draws attention to the importance of state-level research and data collection on the uninsured and the local health insurance markets. The states still have the primary responsibility to regulate insurance and accurate and timely data can inform the debate. State-level research can help shed light onto which coverage strategy can most efficiently affect the uninsured and can assist in tailoring any federal program to take into account varying state characteristics. Second, the article demonstrates that no one federal policy can solve the problem of the uninsured. If the federal government selected one policy instrument, some states could benefit, others could see no gain, and some states could fare poorly. To create uniform reductions in the uninsured across all states, the federal government may need to select several policy options that work together. Last, this study adds a unique perspective into the federalism debate. Proponents of action by the federal government typically argue for uniformity (or standards) created at the national level. They point out the drastic variation in health insurance status by state and argue for federal standards to remedy some of the horizontal inequity existing across states. Yet, the study points out that any uniform federal action focused on the uninsured will have a drastically different impact depending on the very same state-level variation the federal policy seeks to correct. |