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Increasing Access to Health Insurance Focus of Senate, House Committee Hearings

Senate Finance Committee

On March 14, the Senate Finance Committee held a hearing entitled “Charting a Course for Health Reform: Moving Toward Universal Coverage.” The committee heard testimony on a number of health care reforms, all of which are aimed at reducing the number of un- and underinsured Americans.

In his opening statement, Chair Max Baucus (D-MT) said, “At the core of America’s health care crisis is the debate over whether health care is a right, or a privilege. At the core of our crisis is the question whether health care is just another commodity, or a fundamental human need…America spends more than $2 trillion a year on health care. But we have 47 million uninsured. And we have relatively poor health outcomes…America has many of the world’s best doctors and hospitals. They perform the most advanced life-saving procedures. They successfully treat the most serious illnesses. They unfailingly expand the bounds of medical innovation. But this best-in-the-world medical system is out of reach for millions of Americans. One in six Americans does not have access to health care, except for in overcrowded emergency rooms.” Sen. Baucus laid out five principles for health care reform: achieving universal coverage, sharing the burden by creating “pooling arrangements” for cost-sharing, controlling costs, prevention, and shared responsibility “everybody must shoulder the burden together.”

“Last year health care spending exceeded $2 trillion, more than 16 percent of the GDP [gross domestic product]. Costs continue to climb and there is no expectation they will stop,” said Ranking Member Charles Grassley (R-IA). He continued, “The financial burdens of health care costs are being felt by American business. Employers are finding it increasingly challenging to compete in the international market against foreign companies that are not required to directly provide health coverage for their employees…There is also great cost to the community to me, you, taxpayers, consumers, providers, and so on. The Institute of Medicine (IOM) estimates the uninsured population costs society somewhere between $65 billion and $135 billion.” Sen. Grassley said he supported changing the tax code and incentivizing private coverage rather than providing government coverage to all, a proposal he said was “not the right direction for America.” In closing, he said, “We have enough on the table that we have an opportunity to move beyond talk and to substantive action…With every day that passes, we only make fixing the system more difficult. We are running out of time to make changes that will put us on a path toward a more stable health care community.”

James Mongan, president of Partners HealthCare, addressed “three key questions the nation should keep in mind as we begin what I hope will be more of a dialogue than a debate: why is health insurance important; why has legislating on the issue been so difficult; and are there any general paths to success this time around?” Dr. Mongan discussed the importance of health insurance in economic terms, noting that a 2004 IOM study “estimated that the annualized economic cost of the diminished health and shorter life spans of Americans who lack insurance is between 65 and 130 billion dollars a year. These numbers include productivity losses and developmental losses due to poor health in children.” He said that one of the largest barriers to solving the problem of the uninsured and underinsured is cost. Dr. Mongan estimated the price at $70 to $100 billion per year, but said that given our current spending of $2 trillion per year “these numbers would not seem insurmountable.” He recommended the committee follow Massachusetts’ example, recommending “an honest appraisal of the problem, a shared commitment to solutions, a philosophy of sharing and fairness regarding revenue, and a sense of intellectual humility” in achieving universal health care coverage.

“The unpleasant reality is that the health care system that captures vast amounts of America’s resources, employs many of its most talented citizens, and promises to both promote health as well as relieve the burdens of illness is failing far too many of us,” said Richard G. Frank, vice chair of the Citizens’ Health Care Working Group (CHCWG). The CHCWG was created as part of the Medicare Prescription Drug, Improvement, and Modernization Act Of 2003 (P.L. 108-173). The group surveyed thousands of Americans regarding their views of health care, including accessibility and cost of insurance policies. Dr. Frank told the committee “[W]hile Americans recognize that health care costs are a major problem for businesses, industry, and government, as well as families, many believe that the huge sums now being spent on health care should be enough to ensure access to quality care for everyone, if these resources were allocated more sensibly. At the same time, people consistently emphasized the importance of shared responsibility and fairness a clear willingness to pay a fair share, to try to do a better job of taking care of themselves, and to accept limits on coverage if based on good medical evidence.” He said the findings also revealed that most Americans want better access to community-based health care, most especially to primary health care providers.

During questions, Sen. Grassley asked the panelists if the committee ought to look at the upcoming State Children’s Health Insurance program (SCHIP) reauthorization “in a vacuum” or if they should be considering the legislation as a part of a national reform strategy. Dr. Frank told the committee that improving the delivery of national health care is important but that doing so should not come at the cost of reauthorizing SCHIP. Dr. Mongan said that the SCHIP reauthorization was “critically important.” He also said that SCHIP is a vital part of solving the problem of the uninsured and underinsured; he noted that the program has been a success and encouraged states to think creatively about spending federal dollars.

Sen. Blanche Lincoln (D-AR) asked the panelists if they supported using SCHIP as a “wrap-around” meaning that children who are underinsured could access SCHIP benefits to supplement an existing health insurance policy. All of the panelists supported the idea of using SCHIP to cover gaps in children’s health insurance coverage. Additional witnesses included: Dr. Stuart H. Altman, dean of the Heller School for Social Policy and Management at Brandeis University, and John Sheils, vice president of the Lewin Group.

House Education and Labor Subcommittee on Health, Employment, Labor and Pensions

On March 15, the House Education and Labor Subcommittee on Health, Employment, Labor and Pensions held a hearing on integrating employer-based health insurance coverage with the State Children’s Health Insurance Program (SCHIP) and Medicaid.

Joan Akler, deputy executive director of the Center for Children and Families/Health Policy Institute at Georgetown University, said that “as the expansion of public programs for children, and in some cases parents, has occurred, the question of integration with employer-sponsored coverage has arisen. States, especially during challenging budget times, have explored ways to capture employers’ contributions as a source of financing for eligible families. This legitimate desire to reduce public costs has been one of the primary motivations to establish premium assistance programs.” Premium assistance program generally use Medicaid and SCHIP dollars to subsidize low-income families’ purchase of private or employer-based health insurance. Ms. Akler detailed states’ premium assistance programs, focusing on Iowa and Pennsylvania, two states that have “pursued this option aggressively.” Ms. Akler said that the programs have not been successful, because “only 14-15 percent of low-income working families have an offer of employer-sponsored insurance that they are not picking up.” She concluded, “Because employer-sponsored insurance is simply not widely available to low-wage workers, traditional premium assistance programs will not address the causes of uninsurance for these workers. Premium assistance can be a useful tool in some but not all circumstances; it is not a substitute for direct coverage through Medicaid and SCHIP.”

“As we enter a new national debate on health care reform leading up to the 2008 Presidential elections, I urge that our vision of health care reform stretch beyond the issue of access to care and the uninsured. Two other pressing issues must be recognized and honestly addressed in the coming national debate: health care quality and affordability,” said Andrew Webber, president and CEO of the National Business Coalition on Health. Mr. Webber asked the subcommittee to consider premium assistance programs, noting that they would “provide medical benefit coverage to 71 percent of Americans working in the private sector, according to the latest U.S. Department of Labor data.” He praised employer-based health care, saying it “has been the innovator and leader of value-based purchasing, introducing innovations like pay-for-performance, value-based benefit design, and health plan and provider report cards. It has been a leader in health promotion, prevention and disease management.” Mr. Webber said that Congress must consider “legislation and market strategies that would allow small businesses to collectively purchase health insurance to spread risk and leverage economies of scale; small employer tax incentives to provide health care benefits; reasonable exemptions from state coverage mandates for small employers; [and] greater flexibility to allow families to use SCHIP dollars to enroll in employer sponsored benefit programs” when trying to expand health care coverage to all citizens.

Also testifying were Brian English, a small business owner from Columbia, Maryland, and Dr. Linda Blumberg, an economist and principal research associate at the Urban Institute.

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