The federal poverty level is largely to blame for the tremendous number of uninsured. Many of the uninsured are working individuals but fail to qualify for the federal programs Medicare or Medicaid; this because their annual income minimally exceeds the national poverty level therefore excluding them from these federal programs. Fifty-nine percent of the uninsured participating in the Kaiser Commission report of 1994 cited inability to afford health care insurance; 22% lack coverage because their employer doesn't offer it; 7% say they choose to be and 3% say they are in poor health and health insurance would not make them any better.1 The Kaiser Commission report is significant because it points out the two-leading causes for the large uninsured population: welfare reform policies and employers failure to offer insurance plans to low-wage workers. Secondly, this paper delineates that health care costs generated by the uninsured are not elusive to the federal government. Thirdly, this paper examines possible solutions to the rising uninsured minority population
Attempting to find a way to cover all Americans with health insurance started in 1948 with Harry S. Truman and resurfaced again in 1965. In 1965, Lyndon Johnson passed the Title XVII of the Social Security Act to extend health care to the aged population through the creation of a program termed Medicare and Title XIX a public program established to provide health care coverage to the low-income and nonelderly population called Medicaid. Since their inception both programs have registered poor success and escalated government spending. Thirty-four years later at the turn of another century, the American government is still searching for a health care system inclusive to all Americans. A report released in 1996 by the Kaiser Commission showed that the number of uninsured individuals in America had climbed to well over 41 million. This number is projected to rise to over 60 million by 2009.2 These numbers do not include another 20 to 25 million people that are uninsured throughout the year.
Welfare reform has acted as a culprit for creating the large population of uninsured. In 1996 President Clinton passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) which limited the duration for families receiving money from welfare programs AFDC and TANF. Until 1996, Medicaid was automatically given to families that qualified for these programs. The passage of the PRWORA was seen as a dual success because it decreased government spending on both welfare and Medicaid by uncoupling the two programs. In actuality, the PRWORA was not a success. It has only served to shift the problem of welfare to other state and federal programs or private sector businesses. Welfare reform has spread into the private sector by forcing businesses to replace the Medicaid benefits of former welfare recipients with company sponsored insurance coverage to mostly minimum and part time workers. Employers are responding with a cold shoulder to this class of mostly uneducated and unskilled workers trying to make the transition from welfare to the work force. Most companies fear investment in the form of insurance benefits to low-wage workers since it comes at such a huge cost. Secondly, is many companies believe that low-wage workers are a "risky population" of individuals largely due to their past habits and educational deficits.
Reduced employer commitment to health benefits has increased the uninsured population. Private insurance is the predominant form of financing medical care in America; it comprises twenty-six percent of health care insurance in America.3 However, economic pressure to cut labor cost in order to compete in the American as well as international market has forced many small private businesses to look for cost cutting strategies. The popular method for reducing costs is decreasing compensation to unskilled and low-wage workers. These decreased compensations usually target benefit packages such as health insurance plans. Even for low-wage workers that are offered insurance plans, declines in the share of premiums paid by employers and increased costs sharing benefits make health insurance coverage less desirable, not to mention unaffordable. From 1988 to 1996, the average employee premium share for a single-person plan offered by employers with less than 200 workers almost doubled from 12 to 22 percent. Premium shares for family coverage paid by employees jumped from 34 to 44 percent and family deductibles nearly doubled.4 As a result of the increased premiums and deductibles fewer low-wage workers are participating in plans offered by their employers.
Due to the lack of private sector participation, the cost of covering the uninsured eventually falls back on the federal government. Many of the uninsured depend on nonprofit hospitals or clinics in their communities. However, these charitable hospitals are declining in number. The Milwaukee Policy Research Institute released a report that charity care provided by six hospitals in Milwaukee county Wisconsin had grown from $23 million in 1995 to about $38 million in 1998. In addition, three inner-city clinics closed due to bankruptcy.5 An even greater concern is that while a substantial portion of the funds for non-profit hospitals and clinics comes from private benefactors, the other portion comes from state and federal taxes. Specifically, the loss of private funds means that the state and federal government will have to absorb all or most of the cost needed to keep non-profit hospitals operating. If non-profit hospitals continue to decline government funded for-profit hospitals would get their uninsured clientele. This too would result in increased government spending to cover the uninsured influx.
Rising emergency care provided to the uninsured is increasing government spending. More and more the uninsured are using emergency room care as a substitute for general health care necessities. The rate of immunization in large urban areas is far lower than in other areas. As of 1996, the rate of measles vaccination was 55.5 percent in cities and 63.3 percent in the outlying areas; for rubella it was 53.9 percent, compared with 61 percent; for polio, 47.1 percent compared with 58.4 percent. Failure to receive proper preventative care such as immunizations and yearly check-ups results in more serious health conditions. As a result the working poor depend on hospital emergency rooms to replace preventative care. In 1996 more than 100 million Americans visited emergency rooms, of these total visits, 39% involved preventable health problems.6 Emergency room care is more expensive because it is unplanned and requires more testing to find the cause of possible conditions. The government incorporates the bulk of cost accumulated by emergency room care for the uninsured.
The outlook for the uninsured is promising in some states. In April 1999 the Virginia Legislature passed a law allowing residents to donate their state income tax refunds to help fund medical care for the uninsured. Commonly called a "checkoff program," Virginia's program may be only the second one of its kind in the country. Oklahoma has a similar checkoff program that has accumulated $685,000 since l987.~ Another innovative idea that is still being considered in the House of Representatives is providing the uninsured with a tax credit. House Majority Leader Dick Armey has plans to introduce a bill this spring that would give uninsured workers and their families an annual tax credit tentatively set at $800 per adult and $400 per child, to a maximum of $2,400 to buy insurance.8 While these tax refunds and tax credits are definitely a step in the right direction, the federal government must do something that is more complete. For example, the tax refunds and tax credits still do not involve small private businesses and essentially keeps them void of any responsibility to provide coverage to its low-wage workers. Small employers need options to buy into large insurance groups or some type of public-sector supported insurance programs that make their coverage more affordable and increases their range of plan choices.
Public policy solutions for the uninsured: Medical Savings Accounts and The Robert Woods Johnson Foundation. MSAs were created by the National Center for Policy Analysis , a public policy research institute based in Dallas, Texas.9 These accounts essentially hold small businesses more accountable for insuring their workers. MSAs are investment accounts to which an employer contributes, usually coupled with a high deductible insurance policy. The MSA funds belong to the employee and may be used to pay minor health care bills, rolled over to the next year or held until retirement. As of June 1997 at least 56 insurance companies were offering MSA policies in the individual and group markets. In addition to insurers at least 20 banks and nearly 30 companies were offering MSA accounts. In theory MSAs seem like a good solution to the problem of providing insurance to the uninsured-MSAs help small businesses provide insurance to the uninsured while at the same time expands policy options offered to low-wage workers(even though deductibles are high). The truth is only 20 to 25 percent of enrollees to MSA were previously uninsured and most enrollees tend to be older middle-aged people that do not require a lot of medical attention. Moreover, the MSA program is still quite small and relatively unknown to most of the uninsured.
The Robert Wood Johnson Foundation, a non-profit organization based in Washington, D.C., is offering an innovative solution for uninsured communities to solve their dilemma to health care coverage.10 "Communities in Charge: Financing and Delivering Care to the Uninsured" is the initiative designed by the Robert Wood Johnson Foundation to help small communities rethink how health care funds and services are organized in their communities for low-income, uninsured individuals. Through communities in charge up to 20 communities with a will be awarded one-year planning grants of up to $150,000. These grants will help each community research the magnitude of the uninsured problem, develop a strong community-wide union, review potential solutions, and begin to design their delivery and financing system. Upon successful completion of the first phase, up to 15 of the communities will be awarded three-year development grants of up to $700,000. These grants will support the detailed design and implementation of a new delivery system for the uninsured. A national health care consulting firm will help the communities with researching their health care problems. The Robert Wood Johnson program is definitely a positive program to alleviate the growing uninsured. However, the program is only open to communities with a minimum population of 250,000 and at least 37,500 low income, uninsured individuals. Essentially, this program fails to address the large population of uninsured which mostly exists in larger cities.
Tax credit, medical savings accounts, and checkoff programs are all steps in the right direction for decreasing the number of uninsured. However, these programs are not being implemented or not progressing fast enough to keep pace with the growing number of uninsured. Consider this, US health care expenditures account for nearly 14% of the total GDP of the American economy. Yet of all developed nation the US has the largest uninsured population in the world. There are not any easy solutions to ameliorating the large uninsured population. The outlook for the uninsured seems even more bleak when one considers that none of the factions that operate in the health care industry are eager to engulf the cost that the uninsured create. Neither health maintenance organizations, businesses, nor the federal government want to absorb these costs. The biggest sufferers in all of this are the poor who are in a sense being punished for seeking a better life through hard work. In its current form health care is not a right but is treated as a commodity that is granted to those that can afford it. Perhaps as money continues to be a factor and determines who receives health care, the burden on doctors will increase. A greater ethical weight will be put on doctors. Future doctors must decide to enter their profession not for monetary reward but for the satisfaction of being able to perform a job that they enjoy.
Footnotes
1 Kaiser Family Foundation. Kaiser Commission Report on Medicaid Facts: Medicaid and the Uninsured. Washington D.C.: Kaiser Family Foundation, 1994.
2 Kaiser Family Foundation. Kaiser Commission Report on Medicaid Facts: Medicaid and the Uninsured. Washington D.C.: Kaiser Family Foundation, 1996.
3 Danziger, Sandefur, Gary D., Weinberg, eds. Confronting Poverty: Prescriptions for Change. Cambridge, Massachusetts: Harvard University Press, 1994. 253-78.
4 The Commonwealth Fund. Erosion of Employer-Sponsored Health Insurance Coverage and Quality. New York, New York: The Commonwealth Fund, 1998.
5 Regional News: Midwest. Cram Communications Incornorated: Modern Health Care. 19 April 1999: 42.
6 Healthdemographics. Online. Internet. 1997. Available: http://www.mcareo1.com/Hdmg001.htm.
7 "Virginia Allows Tax Refunds to Go to Uninsured." Crain Communications Incorporated: Modern Health Care. 26 April 1999:18.
8 "The Uninsured: Tax Credits A Hot Solution." The National Journal Group. Incorporated: Health Line. 12 March 1999. Section: Access/Quality/Cost.
9 National Policy for Policy Analysis. "MSAs, the Poor and Medicaid". Online. Internet. 1997. Available: http://www.ncpa.org.
10 Robert Wood Johnson Foundation. "Communities in Charge: Financing and Delivering Care to the Uninsured." Online. Internet. 1999. Available: http://www.rwjf.org/main. and http://www.cas.psu.edu/docs/casdept//aers/porh/communities.html