Public and private health insurance: stacking up the costs

Some proposals to expand health insurance coverage for people with low incomes are based on expansions of public programs, such as Medicaid or the State Children's Health Insurance Program (SCHIP), while others rely on the use of tax subsidies for individuals to purchase private insurance. Analyses of data from the 2005 Medical Expenditure Panel Survey indicate that total medical spending is much lower when coverage is provided by Medicaid or SCHIP than it is when coverage is provided by private insurance. Public insurance is particularly advantageous from the consumer's perspective because associated out-of-pocket spending is far lower.     

Report outlines State-run insurance continuity programs

The National Alliance of State and Territorial AIDS Directors (NASTAD) issued a brief that analyzes States' responses to health insurance continuity programs for people with HIV. The government makes premium payments for individuals who cannot afford to maintain their existing private health insurance in at least 35 States. The insurance continuity programs rely on Federal Ryan White CARE Act or State funds, and are more affordable than covering expenses directly through public programs such as Medicaid or State AIDS drug assistance programs. The NASTAD report provides strategies for developing, administering, and monitoring insurance continuity programs, and includes case studies from key States.     

Issues in health reform: how changes in eligibility may move millions back and forth between medicaid and insurance exchanges

The Affordable Care Act will extend health insurance coverage by both expanding Medicaid eligibility and offering premium subsidies for the purchase of private health insurance through state health insurance exchanges. But by definition, eligibility for these programs is sensitive to income and can change over time with fluctuating income and changes in family composition. The law specifies no minimum enrollment period, and subsidy levels will also change as income rises and falls. Using national survey data, we estimate that within six months, more than 35 percent of all adults with family incomes below 200 percent of the federal poverty level will experience a shift in eligibility from Medicaid to an insurance exchange, or the reverse; within a year, 50 percent, or 28 million, will. To minimize the effect on continuity and quality of care, states and the federal government should adopt strategies to reduce the frequency of coverage transitions and to mitigate the disruptions caused by those transitions. Options include establishing a minimum guaranteed eligibility period and "dually certifying" some plans to serve both Medicaid and exchange enrollees.     

Alternatives for expanding health insurance coverage

In March 1990, nearly 14 percent of the U.S. population was without health insurance. This article examines five approaches to increase coverage: tax credits for the purchase of private insurance; changes in the regulation of the private insurance market; additional requirements on employers to provide employment-based insurance; expansion of Medicaid to selected groups; and a universal public health insurance program. Coverage would be most improved under a universal public insurance plan, and least improved by regulatory changes in the private insurance market. Significant but incomplete increases in coverage could be achieved through either new employer mandates or expansion of Medicaid. A tax credit could increase coverage appreciably only if it was substantial relative to the cost of insurance, and even then most of the credits would go to those who would have purchased insurance anyway.     

The spillover effects of health insurance benefit mandates on public insurance coverage: Evidence from veterans

This study examines how regulations in private health insurance markets affect coverage of public insurance. We focus on mental health parity laws, which mandate private health insurance to provide equal coverage for mental and physical health services. The implementation of mental health parity laws may improve a quality dimension of private health insurance but at increased costs. We graphically develop a conceptual framework and then empirically examine whether the regulations shift individuals from private to public insurance. We exploit state-by-year variation in policy implementation in 1999–2008 and focus on a sample of veterans, who have better access to public insurance than non-veterans. Using data from the Current Population Survey, we find that the parity laws reduce employer-sponsored insurance (ESI) coverage by 2.1% points. The drop in ESI is largely offset by enrollment gains in public insurance, namely through the Veterans Affairs (VA) benefit and Medicaid/Medicare programs.     

An analysis of private health insurance purchasing decisions with national health insurance in Taiwan

The Taiwanese health insurance industry is just over 30 years old. Originally private and domestic, the industry underwent substantial institutional changes when it opened to foreign competition between 1987 and 1994 and when the Taiwanese government established national health insurance (NHI) coverage in 1995. Congruent with these changes, rapid growth occurred in the Taiwanese demand for private health insurance. In order to better understand the recent performance of the Taiwanese health insurance industry, the structure of the NHI system is described and then household decisions to purchase private health insurance are analyzed using a two-part (hurdle) model on 1998 Survey of Family Income and Expenditure data. Logistic and OLS regressions are used to examine the factors influencing the probability and amount of private health insurance purchased. Generally, factors affecting the probability of having insurance also influence the amount of insurance coverage purchased. Higher income and education levels are associated with increased probabilities and larger quantities of private insurance purchases. Married females, the employed, and household heads working in state-run enterprises are more likely to purchase private insurance than their counterparts. The probability of private insurance purchases varies by region, with northern Taiwanese households having higher odds of owning private insurance than non-northern households. Compared to those in rural villages, households in cities and towns are more likely to have private insurance. The likelihood of private insurance purchase also tends to rise with advancing age and larger family sizes. In addition, one important implication in the private health insurance market is highlighted. There is no complementarity between the public and private systems.     

Private health insurance: implications for developing countries

Private health insurance is playing an increasing role in both high- and low-income countries, yet is poorly understood by researchers and policy-makers. This paper shows that the distinction between private and public health insurance is often exaggerated since well regulated private insurance markets share many features with public insurance systems. It notes that private health insurance preceded many modern social insurance systems in western Europe, allowing these countries to develop the mechanisms, institutions and capacities that subsequently made it possible to provide universal access to health care. We also review international experiences with private insurance, demonstrating that its role is not restricted to any particular region or level of national income. The seven countries that finance more than 20% of their health care via private health insurance are Brazil, Chile, Namibia, South Africa, the United States, Uruguay and Zimbabwe. In each case, private health insurance provides primary financial protection for workers and their families while public health-care funds are targeted to programmes covering poor and vulnerable populations. We make recommendations for policy in developing countries, arguing that private health insurance cannot be ignored. Instead, it can be harnessed to serve the public interest if governments implement effective regulations and focus public funds on programmes for those who are poor and vulnerable. It can also be used as a transitional form of health insurance to develop experience with insurance institutions while the public sector increases its own capacity to manage and finance health-care coverage.     

Insurance coverage of special foods needed in the treatment of phenylketonuria.

Optimal medical management of phenylketonuria (PKU) requires the use of special low-phenylalanine foods for many years. For women with PKU, elevated maternal blood levels of phenylalanine even at conception can lead to fetal damage. Despite this need, private health insurance, Medicaid, and other public health programs often exclude the cost of these foods from their benefits. The New York State Department of Health conducted a survey of metabolic disorders treatment centers to elucidate the problems PKU patients have obtaining and paying for the special foods essential to their care. Payment for special foods was denied to nearly half of those with private health insurance policies and was covered for only 10 percent of Medicaid-eligibles. A public program for children with special health care needs covered these food costs in upstate New York but not in New York City. There is no program of assistance for adults who are not eligible for Medicaid and who do not have private insurance coverage of special foods. At present, many private health insurance policies and public programs do not cover the costs of low-phenylalanine foods other than infant formula. Payment for this essential part of the management of PKU should be mandated for all public programs for persons with chronic illnesses, public medical assistance (Medicaid) programs, and private health insurance. There is a need for a public program to assist adults with PKU who are not eligible for Medicaid and who do not have health insurance that covers these costs.     

Maternal health insurance coverage as a determinant of obstetrical anesthesia care

This study measures the association between health insurance and the likelihood of receiving different obstetrical anesthesia protocols among 121,351 singleton live births in upstate New York during 1992. Mothers receiving a cesarean under Medicaid were approximately twice as likely to receive general anesthesia as those with traditional private coverage. Those receiving a cesarean under an HMO were least likely to receive general anesthesia with adjusted odds of 0.73 (confidence interval [CI] = 0.68-0.79), compared to those with traditional private insurance. Those delivering vaginally under Medicaid, HMO, or no coverage had adjusted odds of receiving an epidural of 0.45 (CI = 0.43-0.48), 0.68 (CI = 0.64-0.71), and 0.44 (CI = 0.38-0.52), respectively, compared to those under traditional private insurance. Although there was some differences by race, the strongest determinant of anesthesia remained insurance type. Insurance-mediated disparities in obstetrical anesthesia care are evident in upstate New York and warrant further study nationally.     

The number of Americans without health insurance rose in 2001 and continued to rise in 2002.

Data from the Census Bureau and the Centers for Disease Control and Prevention indicate that the number of uninsured Americans rose in 2001and in the first quarter of 2002. The main reason insurance coverage fell was a drop-off in employer-sponsored insurance for workers and their dependents. This reduction was triggered by rising unemployment levels and rising health insurance premiums, which made it more difficult for employers to offer insurance or for workers to afford it. The downturn in private coverage was partially offset by increased enrollment in Medicaid and the State Children's Health Insurance Program (SCHIP). About two million mor e children and one million more adults would have been uninsured had it not been for the growth in these programs. Funding for the public programs is, however, threatened by budget shortfalls affecting most states, which administer these programs. Many states have cut their Medicaid programs and are planning further cutbacks. Increasing federal assistance to states and their Medicaid programs could help protect insurance coverage for low-income people during the current economic slowdown. Future SCHIP enrollment could drop sharply because of a shortage of federal funds, and Congress could take steps to bolster SCHIP funding.     

Understanding the factors behind the decision to purchase varying coverage amounts of long-term care insurance.

OBJECTIVE. This article examines the factors related to an individual's decision to purchase a given amount of long-term care insurance coverage. DATA SOURCE AND STUDY SETTING. Primary data analyses were conducted on an estimation sample of 6,545 individuals who had purchased long-term care (LTC) insurance policies in late 1990 and early 1991, and 1,248 individuals who had been approached by agents but chose not to buy such insurance. Companies contributing the two samples represented 45 percent of total sales during the study year. STUDY DESIGN. A two-stage logit-OLS (ordinary least squares) choice-based sampling model was used to examine the relationship between the expected value of purchased coverage and explanatory variables that included: demographic traits, attitudes, risk premium, nursing home bed supply, and Medicaid program configurations. DATA COLLECTION. Mail surveys were used to collect information about individuals' reasons for purchase, attitudes about long-term care, and demographic characteristics. Through an identification code, information on the policy designs chosen by these individuals was linked to each of the returned mail surveys. The response rate to the survey was about 60 percent. PRINCIPAL FINDINGS. The model explains about 47 percent of the variance in the dependent variable-expected value of policy coverage. Important variables negatively associated with the dependent variable include advancing age, being married, and having less than a college education. Variables positively related include being male, having more income, and having increasing expected LTC costs. Medicaid program configuration also influences the level of benefits purchased: state reimbursement rates and the presence of comprehensive estate recovery programs are both positively related to the expected value of purchased benefits. Finally, as the difference between the premium charged and the actuarially fair premium increases, individuals buy less coverage. CONCLUSIONS. An important finding with implications for policymakers is that changes in Medicaid policy affect the decisions of consumers regarding the acquisition of private LTC policies as well as the level of protection chosen. This is particularly important to states interested in pursuing public-private partnerships in long-term care financing.     

The commercial health insurance industry in an era of eroding employer coverage

This paper analyzes the commercial health insurance industry in an era of weakening employer commitment to providing coverage and strengthening interest by public programs to offer coverage through private plans. It documents the willingness of the industry to accept erosion of employment-based enrollment rather than to sacrifice earnings, the movement of Medicaid beneficiaries into managed care, and the distribution of market shares in the employment-based, Medicaid, and Medicare markets. The profitability of the commercial health insurance industry, exceptionally strong over the past five years, will henceforth be linked to the budgetary cycles and political fluctuations of state and federal governments.     

Health insurance eroding for working families: employer-provided coverage declines for fifth consecutive year.

In 2005, the percentage of Americans with employer-provided health insurance fell for the fifth year in a row. Workers and their families have been falling into the ranks of the uninsured at alarming rates. The downward trend in employer-provided coverage for children also continued into 2005. In the previous four years, children were less likely to become uninsured as public sector health coverage expanded, but in 2005 the rate of uninsured children increased. While Medicaid and SCHIP still work for many, the government has not picked up coverage for everybody who lost insurance. The weakening of this system-notably for children-is particularly difficult for workers and their families in a time of stagnating incomes. Furthermore, these programs are not designed to prevent low-income adults or middle- or high-income families from becoming uninsured. Government at the federal and state levels has responded to medical inflation with policy changes that reduce public insurance eligibility or with proposals to reduce government costs. Federal policy proposals to lessen the tax advantage of workplace insurance or to encourage a private purchase system could further destabilize the employer-provided system. Now is a critical time to consider health insurance reform. Several promising solutions could increase access to affordable health care. The key is to create large, varied, and stable risk pools.     

Self-selection and moral hazard in Chilean health insurance

We study the existence of self-selection and moral hazard in the Chilean health insurance industry. Dependent workers must purchase health insurance either from one public or several private insurance providers. For them, we analyze the relationship between health care services utilization and the choice of either private or public insurance. In the case of independent workers, where there is no mandate, we analyze the relationship between utilization and the decision to voluntarily purchase health insurance. The results show self-selection against insurance companies for independent workers, and against public insurance for dependent workers. Moral hazard is negligible in the case of hospitalization, but for medical visits, it is quantitatively important.     

National trends in health insurance coverage of pregnant and reproductive-age women, 2000 to 2009

PurposeHealth insurance facilitates financial access to health services, including prenatal and preconception care. This study characterized changes in health insurance coverage among reproductive-age women in the United States from 2000 to 2009.MethodsData from female respondents (ages 18–49) to the National Health Interview Surveys, 2000 to 2009 (n = 207,968), including those pregnant when surveyed (n = 3,204), were used in a repeated cross-sectional design. Changes over time were estimated using longitudinal regression models.Main FindingsOf the reproductive-age women in this study, 25% were uninsured at some point in the prior year. Ten percent of pregnant women reported currently being uninsured, and 27% and 58% reported Medicaid coverage or private health insurance, respectively. Among women who were not pregnant, 19% were currently uninsured, 8% had Medicaid, and 68% had private coverage. From 2000 to 2009, an increasing percentage of reproductive-age women reported having gone without health insurance in the past year. Controlling for sociodemographic and health variables, the chances that a reproductive-age woman had been uninsured increased by approximately 1.5% annually (p < .001), and did not differ between pregnant women and those who were not pregnant. The odds that an insured pregnant woman had Medicaid coverage increased 7% per year over the study period (p < .001), whereas the odds of private coverage decreased.ConclusionReproductive-age women are increasingly at risk of being uninsured, which raises concerns about access to prenatal and preconception care. Among pregnant women, access to private health insurance has decreased, and state Medicaid programs have covered a growing percentage of women. Health reform will likely impact future trends.     

The Oregon Health Plan and public health

The Oregon Health Plan would provide all Oregonians with health insurance through a combination of Medicaid expansion, employer mandates and high-risk coverage, with services delivered largely through managed care. The role of public health in a managed care environment is an important national issue, and one which has received much attention in Oregon. "Cultural" differences between Medicaid and public health have arisen over issues such as whether eligibility assures access, whether the private medical model will provide integrated care, the potential for exploitation of vulnerable populations in a capitated system, and the loss of cost-based Medicaid reimbursement to public clinics. In 1991, legislation required that Oregon's Medicaid managed care plans enter agreements with local health departments to assure their continued participation in providing certain public health services; these agreements are now being implemented. Oregon's experience suggests that any national health system will require a continuum of community and individual health services, with an important role for public health departments.     

Family planning clinic patients: their usual health care providers, insurance status, and implications for managed care.

PURPOSE: To understand the extent to which family planning clinic patients have health insurance or access to other health care providers, as well as their preferences for clinic versus private reproductive medical care. METHOD: An anonymous self-report questionnaire was administered at three Planned Parenthood clinics in Los Angeles County to 780 female patients aged 12-49 years. Dependent variables included insurance status, usual source of care, and a battery of questions regarding the importance of confidentiality. RESULTS: A total of 356 adolescents (aged 12-19 years) and 424 adults (aged 20-49 years) completed the survey in 1994. Fifty-nine percent of adolescents and 53% of adults had a usual source of care other than the clinic. The majority of each group reported some degree of continuity of care in their usual provider setting. Nearly half (49%) of all adolescents had health insurance compared with 27% of adults. Adolescents cited not wanting to involve family members as the primary reason for not using their usual providers, whereas adults were more likely to cite being uninsured. The majority of both adult and adolescent patients indicate they would prefer the clinic over private health care if guaranteed health care that was free, confidential, or both. CONCLUSION: Despite many patients' having health insurance and other sources of health care, family planning clinics were primarily chosen because of cost and confidentiality. Their reasons for preferring clinics may continue despite changes in access to insurance or efforts to incorporate similar reproductive services into mainstream health care provider systems. Making public or private health care funds available to family planning clinics through contracts or other mechanisms may facilitate patients' access to essential services and reduce potential service duplication.     

Healthcare Providers’ Satisfaction with a State Children’s Health Insurance Program (SCHIP)

Purpose This study’s purpose was to understand how experiences with and perceptions of the health care plan characteristics influence provider satisfaction with a State Children’s Health Insurance Program (SCHIP). Methods Physicians and other health care providers participating in one program (ALL Kids) were mailed a survey (n = 500). Pediatricians were the most likely to return the survey. We used frequencies, chi-square and logistic regression analysis to explore relationships. Results The odds of being less satisfied with the program among providers who perceived that reimbursement in the ALL Kids program was less compared to private insurance were almost 7 times (OR = 6.81; 95% CI = (1.88–24.73)) greater than for those who perceived that reimbursement was more or the same in ALL Kids. Likewise, respondents who perceived that All Kids families were less likely than families with private insurance to return for follow-up visits were less satisfied with ALL Kids (OR = 17.42; 95% CI = (1.85–164.70)). Conclusions The stigma of SCHIP may be less than that often associated with Medicaid; however, this investigation should be considered with others that have identified barriers for provider’s participation. This study indicates that provider satisfaction is related to their perceptions of SCHIP policies and families, though it does not tell us what factors might contribute to this perception, such as, previous experience with public insurance (Medicaid) and publicly insured patients. Increasing reimbursement rates may not address perceptions that affect provider views of publicly-supported health plans and the participating families.     

Health insurance coverage among disabled Medicare enrollees

In this article, we use the Survey of Income and Program Participation to identify patterns of non-Medicare insurance coverage among disabled Medicare enrollees. Compared with the aged, the disabled are less likely to have private insurance coverage and more likely to have Medicaid. Probit analysis of the determinants of private insurance for disabled Medicare enrollees shows that income, education, marital status, sex, and having an employed family member are positively related to the likelihood of having private health insurance, whereas age and the probability of Medicaid enrollment are negatively related to this likelihood.