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Addendum A
Analysis prepared by Kenneth E. Thorpe, Ph.D., Vanselow Professor of
Health Policy and Director, Institute for Health Services Research, Tulane
University Medical Center
Incremental Health Care Reform Proposals
Proposal 1. Refundable Tax Credit
- Who Is Eligible? Uninsured adults between 101 percent and 150
percent of poverty.
- What Benefits? Those eligible would receive a package of
benefits with an actuarial equivalence to the Blue Cross, Blue Shield
Standard Option plan in the Federal Employees Health Benefit Program
- How Administered? Eligibility for the programs would be
initially established by the states. Annual adjusted gross income would
be used to establish eligibility. Those enrolling in the program would
receive a federal tax credit. The credit could be claimed as part of the
income tax filing process, or on an advanced payment option. Under the
advanced payment option, enrollees would receive a monthly voucher to
purchase insurance, or alternatively the enrollee could direct the
voucher directly to the health plan. The actual magnitude of the tax
credit would be reconciled each year when the enrollee files their
federal income tax.
- Contributions. The value of the credit would average $2800
per adult for those living at the federal poverty line. At 150 percent
of poverty, the credit would reduce to $2,400. Employers or the
individual enrollee would be responsible for paying the difference
between the credit and the cost of the health plan.
- Program Financing. The federal cost of the program of fiscal
years 2000 through 2004 would total $57 Billion.* The costs of the
program would be financed through savings in federal disproportionate
share payments ($6.8 Billion with the remaining costs of the program
financed through the federal budget surplus). This would require the
equivalent of 5.4 percent of the surplus.
- Expected Number of Participants. A total of 2.8 million
formerly uninsured adults are expected to enroll.
Proposal 2. Medicaid Expansion for Uninsured Adults through 100
percent of poverty
- Who is Eligible? Uninsured adults living in poverty.
- What Benefits? Current Medicaid program in each state.
- How Administered? Same as current Medicaid program.
- Contributions. Enhanced federal match--current Medicaid
matching rate plus 10 percentage points. States would also receive
additional outreach funds, pegged at 10 percent of program costs.
- Program Financing. Federal costs estimated at $50 billion
over the next five fiscal years (FY 2000-2004). Program financed through
savings in federal disproportionate share payments ($8.5 billion) and
dedicating the equivalent of 4.5 percent of the federal budget surplus
($41.5 Billion) toward the cost of the program.
- Expected Number of Participants. Approximately 3.5 million
previously uninsured adults.
Proposal 3. Medicaid Enrollment Outreach
- Who is Eligible? All pregnant women and children currently
eligible for Medicaid.
- What Benefits? Current Medicaid program benefits.
- How Administered? Current Medicaid rules.
- Contributions. States enroll eligibles under current
federal/state matching rules. Each state receives additional 10 percent
of program costs for enrollment outreach programs.
- Program Financing. Estimated at $17 billion over next five
fiscal years. Paid for by federal disproportionate share savings ($2.4
billion) and dedicating the equivalent of 1.6 percent of federal budget
surplus ($14.6 billion) toward the program.
- Expected Number of Participants. Approximately 3.2 million
previously uninsured.
Proposal 4. Subsidies for Temporarily Unemployed Persons
- Who is Eligible? Unemployed and uninsured persons with
employer-sponsored insurance prior to their unemployment spell, and
those eligible for unemployment insurance benefits for up to 6 months of
coverage.
- What Benefits? Health insurance provided by previous
employer.
- How Administered? Similar to current state administration of
unemployment insurance benefits.
- Contributions. Subsidy limited to 100 percent of COBRA-health
insurance costs. Full subsidy for workers with monthly income at or
below poverty, phasing out proportionately at 250 percent of poverty.
Federal subsidies limited to 6-month period.
- Program Financing. Federal costs estimated at $12.8 billion
over the next five fiscal years. Costs financed through savings in
federal disproportionate share payments ($2.4 billion) and the
equivalent of 1.1 percent of the federal budget surplus ($10.4 billion)
over the next five fiscal years.
- Expected Number of Participants. Approximately 1 million
currently uninsured and unemployed adults.
Tables 1-3 are attached.
* The program would cost $105 Billion if phased out at 200 percent of
poverty and would cover 5.4 million uninsured adults. |
