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National Insurance NewsHealth Care Costs May Deter Entrepreneurs Source(s): Jim Hopkins, USA Today (August 19). Some experts say the rising cost of health care coverage keeps individuals from leaving jobs at big corporations and starting their own businesses, according to an article in USA Today. This could have an impact on the economy by limiting innovation and job growth. Meanwhile, President Bush is promoting entrepreneurship as part of his "ownership society." Health insurance and other medical expenses are a larger part of start-up costs for entrepreneurs and have become a "bigger burden." Also, individuals with health problems may not be accepted by insurers in the individual market. Other experts disagree, saying the competition among health insurance companies will bring costs down, and health savings accounts, which stay with employees if they leave a job, may also help individuals from feeling "locked in" at a job. However, according to one study by Alison Wellington, a labor and health economist at the College of Wooster in Ohio, if universal health coverage were available, the country's self-employment rate would increase by 3.5 percentage points. (August 19, 2005) Doctors on Federal Medicaid Commission Balk at Charging Copays Source(s): Robert Pear, The New York Times (August 18). At a meeting of the federal Medicaid advisory commission, doctors "clashed" with the Bush administration over charging Medicaid patients higher fees, saying that the cost could preclude some poor people from obtaining necessary care. The commission is considering allowing states to charge higher copayments for doctor visits—$5 for adults and $3 for children—in an effort to make beneficiaries more "price-sensitive.” Dr. John C. Nelson, a former president of the American Medical Association and a commission member, said that raising copayments would put some patients at risk. Dr. Carol D. Berkowitz, president of the American Academy of Pediatrics, said even small copayments could add up quickly to "substantial costs" for a low-income family with four children. (August 18, 2005) State Legislatures Propose Medicaid Plan Source(s): Ralph Thomas, The Seattle Times (August 18); Scott Finn, Charleston Gazette (August 20). As the federal government looks for ways to cut $10 billion from Medicaid spending over the next five years, the National Conference of State Legislatures (NCSL) unanimously passed a proposal "asking for stability and flexibility in Medicaid.” Currently, the federal government regulates how the states raise and distribute their Medicaid budget, but the rules are unclear. In addition to clarifying the rules, state lawmakers would like more authority to determine "who and what should be covered under Medicaid." Over the past five years, Medicaid has increased by one-third, and now covers more than 50 million people. The NCSL proposal would give the states a lump sum from the federal government. From there, each state would decide how to set up its Medicaid program. States would be able to offer "scaled-down benefit packages" for some individuals, and determine if they would like to add copayments, deductibles and premiums for individuals with higher incomes. Hurson also warned that some states have been dropping individuals from Medicaid programs and more states will have to do the same if greater flexibility is not granted. (August 18, 2005) Congressional Panel on Health Care Reform Concludes Nationwide Meetings Source(s): Stephen Smith, The Boston Globe (August 16). The Citizens Health Care Working Group, an advisory panel created by Congress and charged with developing "a populist cure for an ailing medical system," ended a nationwide "fact-finding mission" in Boston, reports the Boston Globe. The 14-member group has toured the country to get accounts of what does and does not work in health care. "You have this situation where our nation is an international leader in medical science," said Richard Frank, a professor of health economics at Harvard Medical School and a member of the group. "Nevertheless, we seem to be having a tremendous amount of difficulty efficiently getting the good stuff to people. There is a convergence of vision about the problem of quality, cost and access." Turning this vision into action has been difficult, but the group, whose recommendations will be sent to President Bush and Congress, maintains it has more of a chance because it has the support of the federal government. Nonetheless, Anthony Robbins, M.D., a public health specialist at Tufts University School of Medicine, doubts that the panel's recommendations will lead to reform. (August 16, 2005) In Efforts to Cut Medicaid Spending, Some States Try to Make Recipients More Responsible Source(s): Kevin Freking, Associated Press (August 15); Julie Rovner, NPR's Morning Edition (August 17). Aiming to make major changes in its Medicaid program that it claims will "redefine health care in the United States," South Carolina is trying to establish personal health accounts for most of its 850,000 Medicaid beneficiaries. The amounts allocated to the accounts would vary according to the recipient's age, sex and physical condition, and would include caps. If low-income people exceed the cap, they would have to make up the difference or go without coverage. The change is "based on the belief that Medicaid has created little incentive for frugality." The state now spends nearly 19 percent of its budget on Medicaid, but the percentage is expected to increase to 24 percent in five years and 29 percent in a decade. If South Carolina's waiver request is approved by the federal government, many believe other states will attempt similar reforms, which will then lead to changes in national policy. (August 15, 2005) Underinsurance Leads to Problems Paying Medical Bills for 2 Out of 5 Working Adults Source(s): Marguerite Higgins, Washington Times (August 11). More than two out of five working adults have difficulty paying medical bills or are in medical debt, according to a study by The Commonwealth Fund. In 2003, nearly 71 million working adults had problems paying medical bills, while almost 28 million were in medical debt. About 62 percent of those with unpaid medical bills were insured at the time. There were an estimated 16 million underinsured adults in 2003, according to the fund. The study was criticized by the National Center for Policy Analysis, which claimed it oversampled low-income blacks and Hispanics and therefore, "did not give an accurate view of working Americans." Michelle Doty, the study's author, said that it was an "absolutely representative sample" of working adults. The study argued against high-deductible health savings accounts (HSAs), which are endorsed by the Bush administration, because they make it harder for participants to pay their medical bills. Forty-nine percent of those with deductibles of $500 or more reported payment difficulties, compared to 32 percent of those with lower deductibles. However, advocates for HSAs contend that the plans cover more medical expenses than regular insurance plans once the deductible is met. (August 11, 2005) Bush Cites Health Care Costs as a Leading Economic Concern Source(s): Nedra Pickler, Associated Press (August 10). Speaking after the Federal Reserve raised interest rates, President Bush said that energy prices and health care costs are his chief economic concerns, reports the Associated Press. Ben Bernanke, chairperson of the President's Council of Economic Advisors, said that the rising cost of health care is more of a problem than energy costs. "It's certainly a major drag on the economy, on family budgets," he said. Bernanke said that health care costs have risen more than 30 percent since Bush became president, and now cost the average family about $600 beyond insurance costs. "These are issues we are going to have to address because they are significant." Trying to "reassure Americans that he is working to address problem areas," Bush encouraged Congress to pass his health care plan, which features tax-preferred health savings accounts (HSAs), subsidies to assist low-income people with purchasing insurance and association health plans (AHPs). Critics say his plan "does not do anything drastic enough to have a significant impact" on health costs. Polls show that a majority of Americans disapprove of Bush's handling of the economy, reports the AP. (August 10, 2005) Insurers Report Slowed Growth of Medical Costs Source(s): Dinah Wisenberg Brin, Wall Street Journal (August 9). Major health insurers such as WellPoint Inc., Aetna Inc. and PacifiCare Health Systems Inc. continue to report stable or slowing growth of medical costs, reports the Wall Street Journal. For example, Aetna had forecasted cost increases of 8.5 percent, but rates in the second quarter rose by a rate of about 8 percent. Employers, which have been sharing more of the increased costs with workers, "are seeing some health-cost pressure ease." Human resources consulting firm Hewitt Associates said HMO rates for 2006 are expected to "rise at their most moderate pace nationally in more than five years." (August 9, 2005) Covering Kids & Families Garners Significant Media Attention Source(s): Rene Syler, CBS News: The Early Show (August 2); Petula Dvorak, The Washington Post (August 3); Marguerite Higgins, Washington Times (August 5). The August 2 launch of the annual Covering Kids & Families Back-to-School Campaign, an effort sponsored by the Robert Wood Johnson Foundation to get families to sign their uninsured children up for health coverage, continued to receive media attention. Speaking at the kick-off event, U.S. Surgeon General Richard H. Carmona said, "The number of uninsured children continues to be in the millions. No child should go without health care," reports the Washington Post. "An assortment of soccer stars, entertainers, health care officials and politicians" joined Carmona in promoting the effort. "The intensive period is now and September, when the kids are heading back to school and the parents are more aware of enrolling them in these programs," said RWJF spokesperson David Morse, reports the Washington Times. Noting local statistics showing that 10 percent of D.C. kids, 9 percent of Maryland kids and almost 11 percent of Virginia kids lacked insurance from 2002-2003, the Post also reports that an RWJF study found that one in three uninsured children went an entire year without seeing a doctor. Uninsured minority children are especially likely to go without health care, according to the study, which found that 20 percent of uninsured African-American children went a year without seeing a doctor. "Inequality in health care is just plain unacceptable in our great country," said Risa Lavizzo-Mourey, president and CEO of RWJF. (August 2, 2005) Covering Kids & Families Launches with Study Showing Many Uninsured Kids Get No Care Source(s): Linda A. Johnson, Associated Press (August 2); Sarah Cooke, Associated Press (August 2). One-third of the estimated 8.4 million uninsured children in the U.S. go without medical care for an entire year, reports the Associated Press. However, more than 70 percent of America's uninsured children may be eligible for government health programs such as Medicaid and the State Children's Health Insurance Program (SCHIP). Medicaid and SCHIP have helped reduce the number of uninsured children by about 2 million since 1998, especially Hispanic and African-American children. The findings were released by the Robert Wood Johnson Foundation as part of its sixth annual Covering Kids & Families Back-to-School Campaign, aimed at getting more children enrolled in public programs. "No child in America should have to go without a doctor's visit or skip needed care, and no parent should have to make that decision," said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. "Low-cost or free insurance coverage is available for seven out of 10 uninsured children." Parents can call 1(877) KIDS-NOW to find out if their kids are eligible. The report found Hispanic and African-American children were most likely to lack care, with 41 percent of uninsured Hispanic kids and 29 percent of uninsured African-American kids going without care, compared to 26 percent of uninsured white kids. There were large differences between states in how many uninsured children went without care for a year, ranging from 15 percent in Maryland to 43 percent in Arizona. In New York, 22 percent of uninsured children went without medical care for a year, compared to 8 percent of children with coverage. (August 2, 2005) Medicaid Expansion Is a Side Effect of Welfare Reform Source(s): Dennis Cauchon, USA Today (August 2). Medicaid's expansion from covering 34 million people in 1999 to 47 million in 2004 has "cemented government's role as the nation's primary health insurer," reports USA Today in a front-page article. The program's growth is "an aftershock" of welfare reform, which has moved people from welfare into low-wage jobs that often do not provide health insurance. The "far-reaching consequences" of this include more children being insured and vaccinated; higher Medicaid expenditures, which have increased from $159 billion in 1997 to $295 billion in 2004; and less private insurance, as low-income workers choose Medicaid over employer coverage that is more costly. Critics contend that Medicaid's growth is adding to the federal budget deficit, but supporters say that Medicaid recipients "have no other option and need coverage to keep working." A related article says that the expansion of Medicaid to cover the working poor has "fundamentally broadened the nation's safety net and changed the lives of low-wage workers," even as it has "put enormous strain" on federal and state budgets. Moving people from welfare to work has, "for better or worse, moved the nation a step closer to a government-run national health care system." According to the article, "the Republican-controlled Congress has retooled Medicaid from a program that helps mostly the poor and disabled into one that tackles the issue of working Americans who don't have health insurance." The effect has been that Medicaid is the biggest budget item in many states. While Tennessee and Missouri have cut back their Medicaid spending, most states have protected and expanded the program. Medicaid supporters hope that the expansion will save money in the long run by reducing emergency room visits and other health problems. (August 2, 2005) Southern GOP Governors Lead Way on Medicaid Reform with Market-Based Approaches Source(s): Sonji Jacobs, The Atlanta Journal-Constitution (July 31). Republican Governors Sonny Perdue of Georgia, Jeb Bush of Florida and Mark Sanford of South Carolina are "leading the charge to restructure [Medicaid] and create models for reform efforts nationwide," reports the Atlanta Journal-Constitution. Seeking waivers to loosen federal strictures on Medicaid, they are embracing a market-oriented approach to curbing soaring costs that will "encourage patients to take more responsibility for their health and require them to pay part of the costs of care." Consumer advocates are concerned that such strategies may lead to cuts in benefits that are currently mandatory, and that cost-sharing will be unaffordable to Medicaid beneficiaries. "I think this could be a really dangerous trend that could undermine the whole purpose of the Medicaid program, which is to ensure that vulnerable people who have no other access to health care have a real safety net," said Rachel Klein, deputy director of health policy for Families USA. GOP leaders "have been at the forefront of calls for dramatic Medicaid changes," according to the article. "The kinds of responses we're seeing are very ideological and seem to be testing a number of conservative policy themes," such as running Medicaid more like private insurance plans and giving patients more responsibility and options, said Joan Alker of the Health Policy Institute of Georgetown University. She is "skeptical" about whether such an approach will work for low-income groups, and concerned that the Southern states are moving too fast. However, Nina Owcharenko of the Heritage Foundation said the governors are taking the lead in reforming Medicaid because "quick action is needed to contain skyrocketing costs." (July 31, 2005) Crisis in Kids' Coverage Grows - 9 Million Have Gaps in Coverage, Adding to 9 Million Uninsured Source(s): Alicia Chang, Associated Press (July 27); David Tirrell-Wysocki, Associated Press (July 27). The actual number of uninsured kids is significantly greater than the number most often cited, according to a study about what happens to children in families with intermittent coverage, reports the Associated Press. According to federal data, at least 9 million children, or about 12 percent of all kids in America, are uninsured. However, the study led by the American Academy of Pediatrics found that another 9 million children have gaps in coverage and are just as likely as uninsured kids "to miss out on seeing a doctor or getting a prescription refilled." Indeed, the study found that children with intermittent coverage were more likely to put off medical care than uninsured children. Twenty percent of children who were uninsured for only part of the year delayed care because their parents were concerned about cost, compared to 16 percent of children who were uninsured for the entire year and 4 percent of insured children. About 80 percent of kids with gaps in insurance coverage have parents who work. (July 27, 2005) As Costs Continue to Soar, Governors Keep Their Legislative Focus on Medicaid Source(s): Dan Balz, The Washington Post (July 26). In an attempt to counter significant cuts to Medicaid sought by the Bush administration, the National Governors Association (NGA) recently gave Congress a bipartisan proposal designed to give states more flexibility to administer the program and save money. Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) met privately with the governors and reportedly "suggested that their proposal will be taken seriously by his committee this fall." Democratic Governor Edward G. Rendell of Pennsylvania said, "We're realists, and if those cuts are going to occur, we'd like them fashioned in a way that has the least fiscal impact on us and has the least effect on the provision of benefits to individuals. I think Senator Grassley gave us reason to be optimistic on both of those." The Center on Budget and Policy Priorities has criticized the governors' proposal for allowing more cost-sharing with Medicaid recipients than is currently permitted, and providing states with greater flexibility to structure benefits packages. Some governors contend that pilot programs suggest Medicaid recipients are willing to share some costs to retain benefits, while others worry that the cost-sharing will "backfire" and end up raising costs overall. (July 26, 2005) Former Rivals Hillary Rodham Clinton and Newt Gingrich Unite on Health Care Source(s): Chris Mondics, Philadelphia Inquirer (July 22); Dana Milbank, The Washington Post (July 22). The time when former Republican House Speaker Newt Gingrich and New York Democratic Senator Hillary Rodham Clinton were "mortal political enemies" seemed to be "a distant memory" at a Washington, D.C., forum sponsored by former Democratic Louisiana Senator John Breaux and American University, reports the Philadelphia Inquirer. The forum is one of a series "aimed at creating a bipartisan approach to fixing the health-care system." According to the Washington Post, agreement between Clinton and Gingrich means "there may be relief yet for the 40 million uninsured Americans." Clinton and Gingrich "called upon both parties to fix a national health-care system that they said was crumbling." The two agreed that the nation's health care system was "plagued with inefficiency, waste and rapidly rising costs, with one consequence being the growing number of people without health insurance." The implication of the meeting was that the two "were moving away from ideologically rigid positions toward more practical approaches-and that the rest of Washington ought to follow." Clinton "now acknowledges the private sector's preeminence in health care reform," while Gingrich "endorses some federal mandates," reports the Post. Agreeing to "piecemeal reform," Clinton said "there is enough money in the system right now to cover the uninsured." (July 22, 2005) Health Care Costs to Companies Eat into Employee Raises Source(s): Theresa Agovino, Associated Press (July 18). Not only will employees pay more for their employer-sponsored health care, but the cost of that coverage to their employers may eat up a share of their raises as well, according to a study by PricewaterhouseCoopers. Half of large U.S. companies said that increased health care costs have contributed to slower profit growth, which means that more than 75 percent may ask employees to bear an even greater share of the cost. Also, 25 percent of the companies said soaring health care cost increases of 12 percent per employee last year-which are predicted to increase by another 11 percent this year-may force them to lower raises for employees. Twenty percent expect to slow hiring of permanent workers in the coming year. Companies now spend 12 percent to 15 percent of their payroll costs on health care, up from around 8 percent five years ago. "Health care costs are the reason job growth isn't where the Bush administration would like it to be," said PricewaterhouseCoopers consultant Barry Barnett. (July 18, 2005) At Meeting, Governors Endorse Medicaid Reform Source(s): Kevin Freking, Associated Press (July 15); Robert Tanner, Associated Press (July 17); Dan Balz, The Washington Post (July 17). The summer meeting of the National Governors Association (NGA) focused on Medicare and Medicaid and highlighted the governors' "widespread view that health care is their most urgent issue, for constituents and for states' financial future. United over "sweeping Medicaid changes that could help President Bush's budget goals," the governors all agreed with the NGA plan to "alter Medicaid in hopes of slowing its growing costs, and to give states the chance to experiment with more effective ways to deliver health care." The governors are proposing that Washington allow them to require copayments from the poor. The cost-sharing proposals "are perhaps the most controversial" of the Medicaid restructuring recommendations, according to an earlier AP article. However, "there is overwhelming support" for copays, according to Republican Governor Mike Huckabee of Arkansas, incoming president of NGA. Liberal groups argue that "even nominal increases become extraordinary barriers" for the poor. The article cites a study showing that Medicaid recipients in Oregon began dropping out of the program when premiums and copays were increased two years ago. Some governors warn that "opening the door to co-pays must be accompanied by limits that don't drive the poorest recipients off government-provided health insurance." Ron Pollack, executive director of Families USA, said, "It's ill-advised to increase cost-sharing because what it will do is merely have people covered on paper. But in reality, they won't truly have health coverage because they can't afford it." (July 15, 2005) HSAs, Growing in Popularity, Represent a Philosophical Shift Source(s): Julie Rovner, CongressDaily; Eileen Alt Powell, Associated Press (July 14); Beth Fitzgerald, Newark Star-Ledger (July 15); Jennifer A. Kingson, The New York Times (July 16). More than 60 percent of Americans have job-based health coverage, but it is becoming increasingly unaffordable for employers. HSAs allow companies to provide less generous health benefits to workers, who are then able to set aside tax-free dollars to pay for the health care costs that their plans do not cover. In this way, HSAs lead to a 15 percent to 25 percent drop in premium costs to employers. These savings "might be the thread that weaves more Americans into the nation's health care system," according to the article. Because HSAs give consumers "incentives to hold down their health spending," they are "highly attractive to free-market advocates," according to CongressDaily. Democrats contend, however, that the plans do "exactly the opposite of what health insurance should do," because they help the "healthy and wealthy far more than the poor or the sick." More than 1 million Americans have signed up for HSAs since the Medicare bill's passage, reports the Associated Press. Recent surveys show that awareness of HSAs is low but growing, reports the Times. Eight percent of large employers now offer them, but 18 percent are planning to offer them in 2006 and 47 percent are considering offering them. (July 14, 2005) HHS Head Leavitt Defends Bush Strategy on Uninsured Source(s): Morton M. Kondracke, Roll Call (July 11). In an interview with Roll Call executive editor Morton M. Kondracke, Department of Health and Human Services Secretary Mike Leavitt "addressed many of the trials the nation will face as government and health care providers struggle" with issues such as covering the nation's 45 million uninsured and overhauling Medicaid. Asked about the adequacy of President Bush's plan to cover only about 9 million of the uninsured, Leavitt responded, "The question of how many people are uninsured in this country is a sticky issue," with figures varying from 30 million to 54 million because of different ways of counting. "I don't want to minimize the dilemma," he said, "but the president has offered proposals that would increase the rolls of the insured by 12 to 14 million" through such means as better use of Medicaid resources and increased use of health savings accounts. (July 11, 2005) Fed Up with Soaring Costs, More States Consider Universal Health Coverage Source(s): Matt Leingang, Associated Press (July 10). Soaring health care costs paired with little federal action are leading to a "push for universal health coverage" in some states, reports the Associated Press. Advocates of a single-payer system have introduced bills in at least 18 state legislatures. "The level of misery with private insurers is rising, and that's why we're seeing this increased activity," said Larry Levitt of the Kaiser Family Foundation. While "mainstream" medical groups such as the American Medical Association oppose single-payer systems, proponents such as United Autoworkers say "there's no other solution out there." The bills propose a single-payer system financed through payroll taxes and new taxes on personal income, which would replace the insurance premiums that people now pay. States would "use their leverage" to negotiate lower prices for drugs and health services. Such a system could cost less, according to John Sheils of the Lewin Group, which conducted a study last year of how a single-payer system could work in California. Voters remain "leery," according to the article, with 55 percent of Americans opposed to a single-payer system, according to a recent Kaiser poll, and 37 percent favoring it. (July 10, 2005) Two-Thirds of Uninsured Women Forego Needed Medical Care Due to Costs Source(s): Lawrence M. O'Rourke, Star Tribune (Minneapolis) (July 8). Continued growth in health care costs means that millions of American women forego needed medical care, according to a new study by the Kaiser Family Foundation. "A sizeable share of women are falling through the cracks, either because they don't have insurance or even with insurance can't afford to pay for medical care or prescription drugs," said Alina Salganicoff of the Foundation. The study found that in 2002, 67 percent of uninsured women did not seek the health care they thought they needed due to costs, compared to 27 percent of non-elderly women overall. These percentages were higher than in 2001. The study also found that women were not receiving appropriate preventive care due to costs. Only 40 percent of uninsured women over 40 had a mammogram during the study period, compared to 75 percent of women on Medicare or with private insurance. Rates of Pap tests and colonoscopies also fell. According to Carolyn Clancy, director of the U.S. Agency for Healthcare Research and Quality, the drop in usage "coincides with a government policy that encourages the shifting of health-care costs from insurers to individuals." (July 8, 2005) Growth in Medicaid Costs and Enrollment Prolong States' Fiscal Crisis, Despite Revenue Rebound Source(s): Robert Pear, The New York Times (July 8); July Robert Tanner, Associated Press (July 7). While state revenues rose significantly in the last year, states remain cautious about the fiscal outlook over the next decade, in part because health costs continue to increase, reports the New York Times. Medicaid is now the "largest, fastest-growing category of state spending." State revenues rose 4.7 percent in the 2005 fiscal year, which ended in June in most states, and are expected to increase by 3.6 percent in 2006. But Raymond C. Scheppach, executive director of the National Governors Association, predicted that Medicaid would continue to grow an average of 9 percent to 10 percent a year over the next decade, as it has for the past five years. Those percentages are higher than the 7.8 percent a year projected by the Congressional Budget Office. Scheppach also predicted that more people would qualify for Medicaid because of "continued erosion in health insurance coverage provided by employers." Twenty-four states had shortfalls between the amount budgeted for Medicaid and the amount needed in the past year, and enrollment continues to increase by about 4 percent a year, reports the Associated Press. "Medicaid and health care continue to be a crisis at the state level," said Scheppach. He anticipates cuts in higher education will be necessary to help fund Medicaid if states are not given more leeway in controlling its costs, according to the Times. (July 7, 2005) Number of Uninsured Children Drops Slightly, But No Change for Adults Source(s): Carol Ann Campbell, Newark Star-Ledger (June 30); Reuters (July 4). The number of uninsured American children has "dropped steadily since the late 1990s", reports the Newark Star-Ledger. The decrease, reported by the Centers for Disease Control and Prevention's National Center for Health Statistics, is mostly due to government insurance programs that "have stepped in to help working-poor families." More than 9 percent of children and 14 percent of all Americans were uninsured in 2004, according to this new data, reports Reuters. The findings show a "slight improvement" in coverage for children, but not for adults. Seven million children under age 18 were uninsured in 2004, compared with 10 million, or 14 percent, in 1997. Nearly 70 percent of the nation's children rely on public health coverage, primarily the State Children's Health Insurance Program. New Jersey was one of the first states to provide coverage to children of the working poor, according to the Star-Ledger, and the state is currently trying to enroll more eligible children. The state estimates that about 200,000 of the 265,000 uninsured children in the state are eligible but not enrolled. "New Jersey was at the forefront of children's health insurance. We're concerned about building on our earlier successes and covering as many children as possible," said Keri Logosso of the state's Office of Child Advocate. (June 30, 2005) Three-Quarters of Adults Support Medicaid Despite Drain on State Budgets Source(s): Kevin Freking, Associated Press (June 29). Nearly three-quarters of adult Americans support Medicaid, despite the toll it takes on state budgets, according to a survey by the Kaiser Family Foundation, reports the Associated Press. "We expected Medicaid to be relatively unpopular with the public, much like welfare was," said Mollyann Brodie of Kaiser. "But we found that Medicaid ranks closer to popular programs like Medicare and Social Security in the public's mind." The survey also found that 56 percent of respondents had some sort of dealings with Medicaid, either themselves or through a family or friend on the program. The results of the survey are "relevant as lawmakers grapple with how to slow the growth of the program by $10 billion over the next five years," the article reports. "Proposals to cut funding for the program or scale back the coverage it offers do not appear to be popular with the public," said Kaiser Executive Vice President Diane Rowland. (June 29, 2005) Federal and State Legislation Attempts to "Shame" Large Companies into Offering Benefits Source(s): Stephanie Armour, USA Today (June 23); Amy Joyce, The Washington Post (June 23). In an effort to shame large companies into providing better health benefits, 24 states have passed or are considering bills that would publicize those companies with large numbers of employees in public health programs. In addition, in "an effort to pressure Wal-Mart Stores Inc. in particular to improve employee health coverage," several congressional Democrats introduced the Health Care Accountability Act, a bill that would force states to report the names of companies that have 50 or more employees who receive government-funded health care. The bill's proponents, including Democratic Senator Edward M. Kennedy of Massachusetts and Democratic Senator Jon S. Corzine of New Jersey, said "they are concerned that large employers such as Wal-Mart are transferring responsibility for health care to government-funded programs such as Medicaid." They estimate that more than 600,000 of Wal-Mart's 1.3 million employees do not have company insurance. These efforts come as states end up "shouldering more costs" of health coverage, due to climbing costs that cause employers to drop coverage and the rising number of uninsured workers. Because a large number of Wal-Mart employees in some of the states are on Medicaid, some of the bills have been nicknamed "Wal-Mart bills." This "hall-of-shame approach is rankling some state chambers of commerce and large employers such as Wal-Mart, which has been lobbying against the bills," according to USA Today. Wal-Mart claims it is "unfairly stigmatized because it may often top the lists simply because it is such a large employer." (June 23, 2005) Rise in Health Care Spending Could Force More in Middle Class to Ranks of Uninsured Source(s): Ceci Connolly, The Washington Post (June 21); Julie Appleby, USA Today (June 21); Heather Won Tesoriero, Wall Street Journal (June 21). A "brief reprieve" in health care spending is over, and the resumption of "soaring costs [is] likely to force more people out of the market," reports an annual study by the Center for Studying Health System Change, showing that health spending by privately insured Americans rose 8.2 percent in 2004, about the same as the previous year and the eighth straight year that the growth in medical costs "far outpaced" wage growth, by nearly four times in 2004. The cost increase was largely attributed to an 11.3 percent increase in expensive outpatient care, such as angioplasty and arthroscopic knee surgery, which accounted for 54 percent of the total increase. Prescription drug spending rose, but its rate of growth declined. Costs are expected to remain high in the coming years, reports the Wall Street Journal. The rise in costs forces more businesses to limit or drop coverage. A related study by the Center for Health Solutions found that 83 percent of employers increased the amounts their employees contributed to health benefits last year. However, employers are passing on a smaller amount of the cost increase to workers this year than in the previous three years, reports USA Today. "Most employers right now feel they have shared as much of the cost as they can," said Helen Darling of the National Business Group on Health. "Now they're looking for new ways to manage costs, such as working on the health care system and on health improvement efforts." (June 21, 2005) Governors Offer Congress Sweeping Bipartisan Medicaid Reform Plan Source(s): Robert Pear, The New York Times (June 16); Associated Press (June 16); Ceci Connolly, The Washington Post (June 16); Ricardo Alonso-Zaldivar, The Los Angeles Times (June 16); Sarah Lueck, Wall Street Journal (June 16). The National Governors Association "offered sweeping bipartisan proposals" to Congress on how to "rein in" Medicaid growth, reports the New York Times. Democratic Governor Mark Warner of Virginia, chairman of the association, and Republican Governor Mike Huckabee of Arkansas said states would be allowed to charge higher copayments, design different benefit packages for different beneficiaries and receive larger discounts on drugs. Current law usually limits copayments to $3, according to the Wall Street Journal. While the governors want to increase that amount, they said the poorest beneficiaries should not have to pay more than 5 percent of total family income, and higher-income Medicaid recipients should not have to pay more than 7.5 percent. The governors' plan, supported by at least 35 governors, was "spurred by a congressional budget that trims $10 billion from Medicaid over the next five years," according to the Washington Post. Medicaid currently consumes 22 percent of the average state budget, and spending has soared in recent years due to millions more uninsured and other cost boosters. The governors did not estimate their plan's savings, but did suggest that several billion dollars in reductions were likely. (June 16, 2005) Uninsured Immigrants Account for Most of the Increase in Number of Uninsured Source(s): Adam Geller, Associated Press (June 13); Ricardo Alonso-Zaldivar, The Los Angeles Times (June 13). Growth in the number of uninsured immigrants accounts for most of the recent increase in the number of uninsured Americans, according to a new study. The study, done by the Employee Benefit Research Institute, found that more than 11 million immigrants were uninsured in 2003, the most recent year for which data are available, representing about a quarter of the nation's 45 million uninsured. Between 1998 and 2003, immigrants accounted for 86 percent of the growth in the uninsured, compared to the years 1994 to 1998, when they represented only a third of the increase. The proportion of uninsured immigrants increased from 34 percent in 1994 to 38 percent in 2003. But for native-born Americans, the chances of being uninsured rose only slightly over the same time period, to 14.9 percent. In California, which has the largest number of uninsured immigrants "by far," nearly half of the uninsured were immigrants. The study did not distinguish between legal and illegal immigrants. "The unrelenting rise in the number of people without health insurance is widely seen as one of the most pressing social problems facing the country," according to the article, and the results of the study suggest that "any solution might require changes in immigration policy." (June 13, 2005) Soaring Health Care Costs Contribute to GM Cutting 25,000 Jobs Source(s): Michael Ellis and Jeffrey McCracken, Detroit Free Press (June 8); Sharon Silke Carty, James R. Healey and Chris Woodyard, USA Today (June 8); Danny Hakim and Jeremy W. Peters, The New York Times (June 10). After eliminating 22,000 hourly jobs over the previous four years, "struggling" General Motors Corp. will cut 25,000 more hourly jobs, or about one in five, between now and the end of 2008, reports the Detroit Free Press. CEO Rick Wagoner is "now trying to wrangle health care costs concessions from the union" after some "modest" concessions in the last contract negotiations, but "was not confident any solution was imminent." GM said it is "making little progress" in getting union members to pay a higher proportion of health care costs. Union members pay about 7 percent of the total health care costs, compared to the 27 percent paid by GM salaried workers. GM claims that the U.S. average is 32 percent. UAW President Ron Gettelfinger said in April that he will "work within the confines of the contract to cut GM's health care tab, but has no plans to reopen" the four-year contract. GM is the nation's largest provider of health care benefits, covering 1.1 million Americans. (June 8, 2005) Study Finds the Cost of Caring for the Uninsured Raises Everyone's Premiums Source(s): Kevin Freking, Associated Press (June 8); Marguerite Higgins, Washington Times (June 9). A study by Families USA found that caring for the uninsured increases annual health insurance premium costs for the average worker by $341, and by $922 for the average family. About $1 out of every $12 spent on health insurance premiums indirectly pays for caring for the uninsured, according to the study. "This is the first time that we have quantified what the impact is for businesses and for workers in terms of paying for the care of the uninsured," said Families USA Executive Director Ron Pollack. But Princeton health economist Uwe Reinhardt said that universal coverage would raise the costs to the insured even more, because the uninsured would be likely to get care more frequently. The report predicts that the number of uninsured will increase to 48 million by year's end. (June 8, 2005) Study Finds States Need Different Strategies to Cover the Uninsured Source(s): Marguerite Higgins, Washington Times (June 7). States require "a variety of options" if they are to reduce their uninsured populations, according to a study published in the health policy journal Health Affairs. The study looked at how successful five federal health care proposals for covering the uninsured would be at a state level. "The uninsured population is extremely varied in each state" in terms of income level and access to coverage, said Columbia University health policy professor Sherry Glied, lead author of the study. The proposals included tax credits for consumers and small businesses, two Medicaid expansions, and expanded coverage through the State Children's Health Insurance Program. Tax credits and expanding Medicaid to cover more poor adults would have the most benefit, the study found. However, the effects would vary across states. For example, while tax credits would lower the rates of the uninsured by more than 15 percent in Utah and Kansas, where insurance rates are relatively low, they would have little effect in New York and New Jersey, because these states have high health insurance rates. (June 7, 2005) Wall Street Journal Series Examines Individual Insurance Market Source(s): Sarah Lueck, Wall Street Journal (May 31); Vanessa Fuhrmans, Wall Street Journal (May 31). The Wall Street Journal published a series of articles on the uninsured, with a front-page article on the "vagaries of individual insurance - the private option of last resort for many of the roughly 60 million Americans who don't get health insurance from their jobs." Some 10 percent of Americans under age 65 buy such policies, which have "a big problem" because they box out those who are sick, or make coverage for them "prohibitively expensive." The individual insurance market is now "at the center of a debate" on how to expand health coverage to the uninsured. The dominance of employer-based coverage, which provides tax benefits for both workers and employers, leaves a "smaller pool of possible customers for the individual market." In addition, these customers are more easily bumped from coverage. Republicans say that state-run high-risk pools, created to provide coverage for those who find it hard to obtain, are "a solution for people whose medical conditions make it difficult or impossible to get individual policies." These pools, which enroll only 181,000 people nationwide, "have their own problems," however, as the premiums can still be too high and enrollment is limited, the article notes. Another article notes that the nation's 45 million uninsured have become "the insurance industry's hottest new growth market." The insurance industry has realized that many of the uninsured "are the same relatively healthy Americans they used to cover or administer to in employer health plans," but have lost or opted out of expensive coverage. Insurers are now creating targeted policies for 20-something uninsureds, part-time workers and early retirees. Most of these plans offer more limited benefits than employer-based coverage, covering only catastrophic illness and a set number of doctor visits. "Maybe it's better to have some coverage rather than nothing," said Sara Collins of The Commonwealth Fund. "But are we setting up a system in which we have fewer uninsured but substantially more underinsured?" (May 31, 2005) Two Separate Bipartisan Groups Work on Proposals to Expand Health Coverage Source(s): Alexandra Marks, Christian Science Monitor (May 25); Robert Pear, The New York Times (May 29). Two bipartisan groups, each comprised of business and labor leaders, patient advocates, and insurance and health care providers, have been working separately on strategies for expanding health coverage. Members of the National Coalition on Health Care, a bipartisan group of more than 150 major corporations, health care organizations, pension providers, unions and religious groups that represents 150 million Americans, told Congress that health care, not Social Security is the problem it should be focusing on. And, "at a time when Congress has been torn by partisan battles, 24 ideologically disparate leaders...have been meeting secretly for months to seek a consensus on proposals to provide coverage" for the uninsured. Members of the National Coalition on Health Care said that "the nation's health care problems are dragging down the nation's overall economy" by making it less competitive and lowering Americans' standard of living. The coalition "called on Congress to embrace a plan for universal coverage" within five years, and provided an analysis saying that such reform would save the nation up to $125 billion annually within the decade. The Times reports on a group of 24 leaders representing "the health care industry, corporations and unions, and conservative and liberal groups, including the AARP, the AFL-CIO, the American Hospital Association, America's Health Insurance Plans, the National Governors Association, Pfizer, the liberal Families USA and the conservative Heritage Foundation. While "far from any final agreement," the group supports a range of incremental options, including tax incentives, Medicaid expansion to cover more low-income adults and state-based insurance purchasing pools. It aims by year's end to agree on proposals to expand coverage "to as many people as possible as quickly as possible." The group will present its recommendations to the Bush administration and Congress. (May 25, 2005) High-Deductible Insurance Plans Become Increasingly Popular with Employers and Workers Source: Ricardo Alonso-Zaldivar, The Los Angeles Times (May 23). As medical costs continue to climb, high-deductible health insurance plans that were once relegated to small businesses or the self-employed "are spreading to the giant corporations that have long been the backbone of traditional job-related, low-deductible health insurance," reports the Los Angeles Times. In a trend that may "reshape the medical insurance landscape and sharply redistribute costs," 26 percent of large employers said they would offer high-deductible plans in 2006, compared to 14 percent this year, according to one survey. Another survey found that half of large companies were considering the plans. Because employees "are caught in a painful bind" of smaller wage increases offset by larger premium shares, the plans are "proving popular with workers who might once have scorned" them. The high-deductible plans feature lower premiums and can be tax-deferred, so employees often retain a "bit more take-home pay." The plans also give large companies an "upfront savings" of about 10 percent. However, the plans "may do little or nothing to solve the basic problem of soaring health costs." Employers say the plans are not simply cost shifters; rather, they actually cut health care costs by "changing consumer behavior" by making employees more cost conscious of how they spend their health care dollars. (May 23, 2005) Diverse Group Agrees on Range of Strategies for States to Help the Uninsured Source: Julie Rovner, CongressDaily (May 20). Health insurers, health care providers, government officials and academics participating in the 12th annual Princeton Conference agreed that "legislation that would allow states to experiment with dramatically disparate ways to cover the uninsured might help break the Washington logjam over the issue." A proposal from Stuart Butler of the Heritage Foundation and Henry Aaron of the Brookings Institution won "surprisingly strong support from the diverse group." The proposal recommends that states receive a "policy toolbox" that allows them to experiment with various solutions, including a single-payer plan and tax credits. States that improve coverage would receive rewards. The proposal would allow states to "truly test which approaches work" over a five-year period, as neither Congress nor the administration would have the final say over state decisions. But Alan Weil, executive director of the National Academy for State Health Policy, opposed the state-based approach, saying, "Placing our hopes on the states is not sound public health policy...this is a job for the national government." (May 20, 2005) BusinessWeek Cover Article Looks at Americans' Wariness over Bush's "Ownership Society" Source: Lee Walczak and Richard S. Dunham, BusinessWeek (May 16). A BusinessWeek cover article examined how Americans' fear of losing the safety net of Social Security, Medicare and Medicaid is causing them to turn away from President Bush's idea of an "ownership society." Though "many members of Safety Net Nation have nothing against investing and choice, they're worried that the country's web of public and private social protections is fraying," according to the article. "They believe in more, not fewer, safeguards against downward mobility in a world that's already pulsing with economic uncertainty." The article notes that "Safety Netters include plenty of card-carrying Republicans and independent swing voters, and the group may represent a broader swath of America than the White House imagines." With employer-provided pensions and health care no longer taken for granted and costs being shifted to employees, this group wants "a middle-class security blanket that gives them protection as they build wealth." A recent survey by the nonprofit Civil Society Institute found that 67 percent of Americans support guaranteed health care for all citizens, while only 27 percent disapprove of it, the article reports. Federal spending on the safety net for the poor "has grown briskly," according to the article, but, as witnessed by some states that have downsized their Medicaid programs, it "hasn't kept pace with society's needs." At the same time, "huge holes have been ripped in the private safety net as the cost shift to workers has accelerated." The result is that a "political boulder" stands in the way of Bush's ownership society. (May 16, 2005) Lack of Specialty Care for Uninsured Is a Crisis Source: Judith Graham, Chicago Tribune (May 15). There is "a growing sense of crisis surrounding specialty care for the uninsured," with millions of uninsured Americans who might receive basic medical services at community health clinics not being able to obtain specialty care when they need it, according to a Chicago Tribune article. The uninsured are more likely than the insured population to require specialty care because they tend to have more chronic illnesses, are more likely to develop complications because they forego routine care, and are treated at public hospitals that are "under intense financial pressure as governments cut back support." As an example, the article notes that 200,000 uninsured cancer patients each year spend twice as much out of pocket on care, while seeing physicians less often than insured patients. The uninsured are also much less likely to receive "sophisticated medical tests such as MRI scans, high-tech services such as heart bypass operations and preventive screenings such as colonoscopies." While the federal government has "poured significant amounts of money" into community health centers that deliver basic care, neither it nor state and local governments "devoted funding to expanding specialty care," the article concludes. (May 15, 2005) Leavitt to Appoint Panel to Recommend Medicaid Changes Source: Robert Pear, The New York Times (May 12). The Bush administration announced that it would create an advisory panel "to recommend big changes in Medicaid eligibility and benefits and in the financing of the program," reports the New York Times. Despite "bipartisan Congressional pleas for an independent commission under the auspices of the National Academy of Sciences," the panel will have up to 15 voting members, all appointed by Health and Human Services Secretary Michael O. Leavitt and 18 nonvoting members." According to the panel's charter, voting members will include Leavitt or his designee; federal officials who run programs for the Medicaid population; former or current governors; former or current state Medicaid directors; three health care experts from public policy organizations; and other "individuals with expertise in health, finance or administration." Eight members of Congress, appointed by Congressional leaders and split between the two parties, will be the nonvoting members. The panel will also "receive advice" from 10 people involved in Medicaid, including consumer representatives and health care providers. The panel is charged with recommending by September 1 ways to save $10 billion in Medicaid, and making "longer-term recommendations on the future of the Medicaid program" by December 31, 2006. (May 12, 2005) State Governments Outline Steps for Medicaid Reform That Reign in Costs Source: Robert Pear, The New York Times (May 9). The National Governors Association and the National Conference of State Legislatures (NCSL) have drafted proposals for "sweeping changes in Medicaid" designed to cut spending by $10 billion over the next five years, as called for in the fiscal year 2006 Federal budget resolution. The proposals require some beneficiaries to pay more for care, and give states more flexibility to limit services. The recommendations include raising copayments for Medicaid services; using incentives and penalties to encourage individuals to take more responsibility for their own health care; creating purchasing pools to help small businesses buy health coverage for employees; using health care tax credits to slow the growth of the Medicaid-eligible population; and streamlining or eliminating the federal Medicaid waiver process. A coalition of health care providers, labor unions and patient advocates "is already gearing up to fight any significant cutbacks in Medicaid." However, with Congressional leaders anxious to control Medicaid costs, the proposals "have a substantial chance of becoming law." John Adams Hurson, a Democratic Maryland legislator and president of NCSL, said, "I am ... a liberal Democrat, but we can't sustain the current Medicaid program. It's fiscal madness. It doesn't guarantee good care, and it's a budget buster. We need to instill a greater sense of personal responsibility so people understand that this care is not free." (May 9, 2005) States and Businesses Battle Over Who Is Responsible for Workers' Health Coverage Source(s): Reed Abelson, The New York Times (May 6). Rising health care costs are leading to battles between states and businesses over who is responsible for insuring workers, reports the New York Times. With the jointly funded federal-state Medicaid program consuming about 16 percent of state budgets, and states facing cuts in the federal allotment as the number of uninsured rises, "the states' burden seems likely to grow." But employers question whether they are responsible for a national problem. The article examines some of the ways that nearly two dozen states are "looking to shift more of the financial burden" of covering workers onto their employers. For example, Maryland has passed a bill requiring large employers to spend at least 8 percent of their payrolls on health benefits; New Jersey would only let companies that provide coverage for their workers to bid on state contracts; and Tennessee and Minnesota have been dropping people from public coverage. "There's momentum around these efforts," said Jeff Munn of Hewitt Associates. According to its backers, support for the Maryland bill "indicates a growing recognition of the growing financial burden of caring for the uninsured," with tax payers footing the bill for uninsured workers. "Few policy analysts expect the struggle between states and employers to end anytime soon," the article concludes. (May 6, 2005) Surveys Look at Appeal of Health Savings Accounts Source(s): Sarah Lueck, Wall Street Journal (May 4); Marguerite Higgins, Washington Times (May 5). In "a slow start to a coverage option being pushed by President Bush and top administration officials," fewer than 5,000 people have enrolled in health savings accounts being offered to federal employees, reports the Wall Street Journal. However, since they were authorized in 2003, 1,031,000 HSAs have been opened overall, according to a survey by America's Health Insurance Plans. An article about the survey in the Washington Times calls the accounts "booming." This year was the first time health savings accounts were offered to the more than 8 million people covered under the Federal Employees Health Benefits Program. "Federal employees, like most consumers in America, are slow to adopt something new," said Michael Orenstein of the Office of Personnel Management. Backers expect HSAs-high-deductible plans that allow workers to set aside tax-free money for medical costs-to increase in popularity as they become more available. The Washington Times reports that individual enrollment in HSAs was higher than employee enrollment in HSAs. Among small businesses offering the accounts, 37 percent said that they previously offered no coverage to workers. Twenty-seven percent of individuals enrolled in HSAs were formerly uninsured. (May 4, 2005) Young Adults Are Fastest Growing Group of Uninsured Source(s): Bloomberg News (May 4). Young adults ages 19 to 29 are the fastest growing group without health coverage, according to a Commonwealth Fund study reported by Bloomberg News. The number of uninsured in that age group has jumped 2.2 million in three years, to 13.4 million. The total number of uninsured Americans rose 5.2 million during the same period. The report concludes that about two-thirds of those aged 19 to 23 probably will lack coverage at some point during the next four years unless policies change. To tackle the problem, The Commonwealth Fund recommends expanding the State Children's Health Insurance Program to cover people until age 23, and requiring colleges and universities to offer coverage. (May 4, 2005) Congressional Action on Uninsured Appears Unlikely Source(s): David Espo, Associated Press (May 3); Emily Heil, CongressDaily (May 6). "Although groups around the country are calling for action in Congress as part of Cover the Uninsured Week and lawmakers are busy holding news conferences on the topic, most proposals have been hampered by inattention, budget constraints and lack of consensus among lawmakers," reports CongressDaily. Providing health coverage to the nation's uninsured is "one of the stated goals" of Senate Majority Leader Bill Frist and other congressional leaders, but Congress has not enacted any significant legislation to reduce the number of uninsured since 1997, and "most experts do not expect that to change any time soon." As part of this year's Week, House Democrats unveiled a proposal last week that would expand coverage. The plan would allow retirees between the ages of 55 and 65 to buy into Medicare, provide a 50 percent tax credit to small businesses and the self-employed if they purchase coverage, and expand the State Children's Health Insurance Program to 7.5 million low-income working parents of eligible children. The cost of these expansions was not disclosed. As the minority party, however, House Democrats "have no hope of winning passage of their agenda on their own," and little chance of obtaining sufficient Republican support. (May 3, 2005) Congress Passes Budget Featuring $10 Billion in Medicaid Cuts Source(s): Sheryl Gay Stolberg, The New York Times (Apr. 29); Jonathan Weisman, The Washington Post (Apr. 29); Janet Hook, The Los Angeles Times (Apr. 29); Jim Abrams, Associated Press (Apr. 29). "Resolving differences that revolved largely around Medicaid," Congress adopted a $2.56 trillion federal budget last week. The new budget features "the first curbs on entitlements for the poor in nearly a decade," including $10 billion in cuts to Medicaid over five years, which make up nearly a third of the total $35 billion in cuts. The budget is non-binding, but it "provides an economic blueprint" for lawmakers as they tackle specific tax and spending legislation. Medicaid was "a point of particular controversy" in the budget, with the House version calling for $20 billion in cuts over five years. The negotiated Medicaid cuts were "too much for many Democrats and liberal groups," and were "particularly galling ... because they were proposed in tandem with additional tax cuts," reports the Los Angeles Times. "It is unconscionable to balance the budget on the backs of our must vulnerable Americans, and that is exactly what the White House and congressional Republicans have decided to do," said Democratic Senator Hillary Rodham Clinton of New York. Democrats unanimously opposed the resolution. But Senate Budget Committee Chairman Judd Gregg (R-N.H.) said that the Medicaid savings accounted for only about 1 percent of the program's projected spending of more than 1.1 trillion over the next five years. (April 29, 2005) USA Today Examines High Rate of Medical Bankruptcy Among the Insured Source: Julie Appleby, USA Today (Apr. 29). Employers increasing the amount that employees must pay for medical care in an effort to control soaring health care costs is "having ripple effects" that can destroy personal finances and lead to bankruptcy. For the "fully insured middle-class people who become ill with critical or life-threatening illnesses, it can completely ruin their financial health," said Beth Darnley of the Patient Advocate Foundation. Elizabeth Warren, a Harvard professor who recently authored a study that found that medical bills contributed to half of all personal bankruptcies, said, "Families are paying more and more for health insurance that covers them less and less." According to Warren's research, medical bills lead about 1 million Americans into bankruptcy each year, with the average out-of-pocket medical debt at the time of filing being about $12,000. Sixty-eight percent of these filers have health insurance. (April 29, 2005) Cover the Uninsured Week Launches with Study Showing That Millions of Uninsured Adults Are Working Source(s): Ken Freking, Associated Press (Apr. 27); Julius A. Karash and Alan Bavley, Kansas City Star (Apr. 27); Celeste Katz, Daily News (New York, NY) (Apr. 27); USA Today (Apr. 27). A new study for the Robert Wood Johnson Foundation (RWJF) found that Texas leads the nation in the percentage of uninsured adults-most of them employed-while Minnesota claims the lowest percentage. The report "is aimed at a common misperception: that all working people have insurance through their jobs," reports USA Today. In fact, a "significant number" of these uninsured adults are employed. In Texas, 30.7 percent of adults are uninsured, including 26.6 percent of working adults. In Minnesota, 8.3 percent of adults are uninsured, including 6.9 percent of working adults. "There is an old image that people who are uninsured don't work or are on public assistance," said Stuart Schear of RWJF. "That's never really been accurate and is completely inaccurate today." Other states with high percentages of uninsured are Louisiana, with 26.4 percent of all adults uninsured, including 22.6 percent of working adults, and New Mexico, with 26 percent of all adults uninsured, including 22.6 percent of working adults. Another article about the study reports that 41 percent of uninsured adults say they were unable to see a doctor when they needed to during the previous year; 56 percent said they did not have a personal doctor or other health care provider, compared to 16 percent of those with coverage; and 20 percent said their health was fair or poor, compared with 12 percent of those with coverage. The New York Daily News reports that there are also racial disparities in coverage, with about 35 percent of working Latinos lacking coverage, compared with about 19 percent of working black adults and 12 percent of working white adults. (April 27, 2005) Launch of Third Cover the Uninsured Week Receives Widespread National Attention Source(s): Rachel Brand, Rocky Mountain News (Apr. 27); Jerry Spangler, Deseret Morning News (Apr. 28); Mike Snyder, The Houston Chronicle (Apr. 28); Katherine Marks, Arkansas Democrat-Gazette; UPI (Apr. 28); Reuters (Apr. 28). The third national Cover the Uninsured Week launched on April 27 in Washington, D.C. Sponsored by the Robert Wood Johnson Foundation (RWJF), the Week includes more than 1,700 events planned for May 1-8. Republican Senator Orrin Hatch of Utah and Democratic Senator Ron Wyden of Oregon attended the launch, which "dovetails" with legislation sponsored by the senators. Called the Health Care That Works for All Americans Act, the legislation calls for a national dialogue on the health care crisis and mandatory congressional hearings on the findings of town hall meetings of average citizens held in all 50 states. "We want to hear from people outside of Washington, D.C.," about their concerns with the health care system, said Hatch. Wyden and Hatch challenged Americans to "come up with new ideas that can help avert a total collapse of the system," according to the article. A bipartisan approach such as the Wyden-Hatch legislation has never been tried before, said Wyden. He said the current way of trying to reform health care has failed for 60 years. "From President Truman to President Clinton, health care reform has been pushed on the American people from inside the beltway in Washington, D.C." According to Hatch, "Real health care reform will come from the people, not bureaucrats in Washington." Results of a Robert Wood Johnson Foundation study finding that 20 million uninsured individuals-almost half of the total number of uninsured-are working adults were released at the Cover the Uninsured Week kickoff. According to the Rocky Mountain News (Denver), Dr. Rick May, president-elect of the Colorado Medical Society, believes that nobody wants to pay to solve the problem because the uninsured tend to live at the "political margins." According to May, "If you had an AARP to represent the uninsured, you'd have a huge amount of outcry." (April 27, 2005) New Analysis Suggests Official U.S. Number of Uninsured May Be High Source(s): Ricardo Alonso-Zaldivar, The Los Angeles Times (Apr. 26). Two new government-funded reports that suggest that the number of uninsured Americans may be overstated by as much as 20 percent may have "broad consequences for the healthcare debate" and for financing of the State Children's Health Insurance Program (SCHIP). Rather than 45 million uninsured in 2003, the most recent year for which figures are available, the new findings purport the number should be 36 million. The reports conclude that the 45 million figure derived from the U.S. Census Bureau's Current Population Survey may be overstated due to technical analytic problems. Michael O'Grady, a top health economist in the Bush administration, "push[ed] to reassess the number of people lacking health insurance." One of the new studies, conducted by Actuarial Research Corp., estimated that 9 million of the 45 million had coverage. The other study, by the Urban Institute, a nonpartisan Washington think tank, found a smaller overcount of about 4 million based on 2001 data. Both studies claim the Current Population Survey undercounted the number of Americans on Medicaid. "Reflecting the political sensitivity of the issue, the White House said President Bush was determined to expand coverage, regardless of the precise number of uninsured," according to the article. "The president believes there are too many Americans who are uninsured," White House spokesperson Trent Duffy said. "We defer to the official experts on exactly what the count is, but the president thinks it's too many." However, Princeton health economist Uwe Reinhardt, while agreeing that the number of uninsured might be less than 45 million, said, "the administration's decision to commission the research showed that it was worrying more about counting the uninsured than about helping them." (April 26, 2005) Medical Bankruptcy Strikes an Increasing Number of Middle-Class Americans Source(s): Angus Loten, Chicago Tribune (Apr. 24). Several thousand Americans are "driven to financial ruin each year by sometimes life-threatening illness or injury," according to the recent Harvard study of bankruptcies caused by medical bills. Between 1.9 million and 2.2 million Americans experienced medical bankruptcy in 2001, a figure that includes family members and dependents of the filers. The 1.5 million individuals and couples who filed general bankruptcy petitions that year marked a 360 percent increase from 1980. Most were middle-class homeowners, the study found. Many had health insurance, but were "overwhelmed by co-payments, deductibles and uncovered services," or forced out of work by their illness and lost coverage. (April 24, 2005) Medicaid Reform Tied Up in Congress Source(s): Associated Press (Apr. 21). "The House and Senate stand far apart over proposed cuts to Medicaid and other government spending, an impasse that has deadlocked negotiations on next year's budget," reports the Associated Press. A proposed reduction in Medicaid spending, the centerpiece of Republican efforts to rein in federal deficits, is the "key disagreement." House lawmakers do not want to start negotiations with the Senate "until it is clear a majority of senators can support a budget" with restraints on federal spending. To date, Senate Republicans are not in agreement about whether to act now to restrain spending on the program. President Bush proposed $8.5 billion in Medicaid savings over five years, but the House, despite a letter signed by 44 Republicans protesting the cuts, would reduce spending over the next five years by $20 billion. The Senate took a plan for $14 billion in Medicaid reductions out of its budget and instead created a commission to study changes to the program. (April 21, 2005) With Medicaid Cuts Looming, States Try to Strategize Source(s): Kyung M. Song, The Seattle Times (Apr. 21); Stephanie Simon, The Los Angeles Times (Apr. 24); Robert Tanner, Associated Press (Apr. 25). U.S. Secretary of Health and Human Services Mike Leavitt, speaking in Seattle, said he wants states to have more flexibility in how they administer Medicaid. He argues that increased flexibility will allow states to offer basic coverage to more poor people instead of comprehensive coverage to fewer people. Leavitt, a "key architect of the Bush administration's Medicaid policy," also said he is in favor of allowing states to charge co-payments to those covered by Medicaid. Leavitt implemented such changes to the Utah Medicaid program when he was governor. By limiting benefits to basic medical coverage, he expanded coverage to 400,000 more uninsured residents. The co-payments that Leavitt supports "are not so much meant to generate significant revenue as to discourage patients from seeking unnecessary services." Washington state Medicaid director Doug Porter said he "was encouraged by Leavitt's stance on giving states more freedom to alter their Medicaid programs." Cost-containment strategies are underway in several states, such as Tennessee, where Democratic Governor Phil Bredesen plans to end coverage for more than 320,000 adults; and South Carolina and Florida, where Medicaid privatization has been proposed. It notes that a few states are expanding Medicaid, such as Kansas, where Democratic Governor Kathleen Sebelius wants to raise cigarette taxes to cover more poor working adults; and Illinois, where tens of thousands of children and parents have been added to the Medicaid rolls over the past two years. The "most drastic overhaul of all" is in Missouri, where nearly one in five residents is enrolled in Medicaid, and the program eats up more than 30 percent of the state budget. Republican Governor Matt Blunt is about to sign a bill that would eliminate the program entirely in three years, by which time he expects that the state will have "an alternative mechanism" for helping the poor. While eligibility details in the bill are still being negotiated, one leading proposal would deny coverage to a single mother of two who earns $3,800 a year, though her children would receive coverage. If she earns $23,000 a year, her children would not be eligible for coverage. Republican lawmakers in Missouri contend that the cuts are "about steering Medicaid back to its original purpose: to serve as [a] safety net for citizens who are too young, too old or too ill to help themselves," and not as "a welfare program for poor but able-bodied adults." But opponents such as Democratic State Representative Trent Skaggs, consider the new rules "cruel, especially at a time when more than 45 million Americans lack coverage." Skaggs notes that the new eligibility requirements could prompt parents to stop working so that their income falls low enough for them to qualify for the program. (April 21, 2005) Study Finds That HSAs Are Unaffordable for Most of the Uninsured Source(s): John Strahinich, The Boston Herald (Apr. 20). A new study found that fewer than 1 million of the 45 million uninsured Americans are likely to obtain coverage by opening up health savings accounts (HSAs), which are supported by President George Bush, reports the Boston Herald. More than half of uninsured adults are "too poor to pay taxes to begin with," and so tax-free HSAs hold no appeal, said economist and lead study author Sherry Glied of Columbia University. She estimates that even middle-income Americans would see savings of no more than 3 percent to 6 percent on the $2,000 annual premium cost of a typical high-deductible health plan. Those buying HSAs tend to be older people who have lost their jobs and are waiting until they are eligible for Medicare, and younger workers who are leaving their parents' coverage. However, Larry Akey, spokesperson for America's Health Insurance Plans, said that about a third of those buying HSAs were previously uninsured, according to a preliminary survey conducted by the organization. He said that it is too early to judge the appeal of HSAs. (April 20, 2005) Merck, Following Move by Competitors, Offers Drug Discount Card to Uninsured Source(s): Theresa Agovino, Associated Press (Apr. 19); Michael S. Rosenwald, The Washington Post (Apr. 20); Barbara Martinez, Wall Street Journal (Apr. 20). Pharmaceutical giant Merck and Co. announced that it would join other drug companies in providing uninsured Americans steep discounts on its drugs, reports the Washington Post. The company said it will launch a discount card for uninsured Americans regardless of their age or income, reports the Associated Press. People can obtain the card, which became available April 25, at www.merckuninsured.com or by calling 1-800-50MERCK. Most drug makers already have programs that provide free medications to those with incomes of less than $19,000, but many Americans making more than that "still struggle" to pay for their medications. The Merck plan offers discounts of between 15 percent and 40 percent off its medications. While the company denies that millions of Americans buying lower-cost drugs from Canada was the incentive for the program, it did note that its discount program "will bring prices closer in line with those found in Canadian pharmacies." Unlike a somewhat similar program launched by Pfizer, the Merck program will not require people to prove they are uninsured with low incomes. Responding to the Merck announcement, Ron Pollack, executive director of Families USA, said, "Any help that is provided to uninsured people with their medicines is certainly welcomed. However, uninsured people are often unable to go to a physician because they can't afford to pay ... Therefore they can't even get a prescription." (April 19, 2005) Uninsured at Los Angeles Public Hospitals Leads to Major Increases at Private Facilities Source(s): Jia-Rui Chong, The Los Angeles Times (Apr. 15). Uninsured patients being turned away at overcrowded public hospitals in Los Angeles County led to a one-third increase in the number of uninsured patients going to private emergency rooms over the past five years, according to a study reported by the Los Angeles Times. The recent closure of nine hospitals and emergency rooms in the county, which has one of the highest percentages of uninsured of any major metropolitan area, is largely attributed to this trend, according to the study. The study also found that uninsured patients were waiting longer before going for treatment, and so requiring more "extensive and expensive care." Most of these uninsured are aged 19 to 64 years old and are working, but at jobs that do not provide health benefits. Twenty percent are immigrants. Administrators at private hospitals say that they are losing millions of dollars from emergency room visits by the uninsured. For example, Downey Regional Medical Center reported losing more than $1 million in care of the uninsured in the ER in 2002, and by 2004, lost about $6 million. However, Lark Galloway-Gilliam, executive director of Community Health Councils in Los Angeles, was concerned that uninsured patients will be charged full price for their treatment at private hospitals, and "feared that the shift to private emergency rooms would leave patients with heavy debts that could bankrupt them." (April 15, 2005) House GOP Members Sign Letter Opposing Medicaid Cuts; Move Could Impede Bush Plan Source(s): Kevin Freking, Associated Press (Apr. 14); Tony Pugh, Philadelphia Inquirer (Apr. 15); Joel Havemann, The Los Angeles Times (Apr. 16). Cuts to Medicaid, which have been sought by the Bush administration and opposed by many of the nation's governors, continue to dominate Congressional budget debates. The latest development came when a letter signed by 44 House Republicans asked the House Budget Committee Chair Jim Nussle (R-Iowa) to abandon up to $20 billion in cuts over the next five years, and instead create a bipartisan committee to restructure the program. The letter poses "a serious threat to plans by President Bush and GOP leaders to curtail spending on a range of benefit programs," and could "hinder Congress' ability to pass this year's budget resolution," reports the Los Angeles Times. The Senate had voted to restore the Medicaid cuts recommended by its Budget Committee, setting the stage for conflict between the two Congressional branches. Republican Representative Heather Wilson of New Mexico, author of the letter, said she did not intend it as an obstacle to passing the budget. Democrats consider the letter "a significant development," according to AP. (April 14, 2005) Slowed Wage Growth Attributed to Soaring Health Premium Costs Source(s): Nicholas Riccardi, The Los Angeles Times (Apr. 11). Wage growth trailed inflation for the first time in 14 years, reports the Los Angeles Times. "Workers' wallets are being pummeled by something of a perfect storm of economic forces: a weak job market, rising health insurance premiums and other inflationary pressures," according to the article. The rising price of health premiums increased the cost of benefits to employers by 7 percent last year, "eating into the pool of corporate cash set aside for raises," which rose only about 2.4 percent. The falling value of wages is particularly hard on the 47 percent of workers who do not have employer-provided health coverage and have to pay for it themselves, especially lower-income workers who are more likely to be uninsured. "Healthcare has eroded the wage base," said Janemarie Mulvey, chief economist at the Employment Policy Foundation, a Washington, D.C. think tank. "In the long run, we can't continue like this. If healthcare keeps crowding out wages forever, something's got to give." (April 11, 2005) General Motors Struggles as Soaring Health Costs Threaten Profits Source(s): Lee Hawkins Jr., Wall Street Journal (Apr. 7); Jonathan Fahey, Forbes (Apr. 11); David Welch, Business Week (Apr. 11). General Motors Corp. (GM) expects to spend $5.6 billion this year on health care for its 1.1 million active and retired employees and their dependents. That cost amounted to an extra $1,525 on the price of every GM car produced in the U.S. last year, and according to Chief Executive Rick Wagoner is responsible for "much of GM's profit woes." The situation "is even worse than [Wagoner] says it is," according to Forbes. To cover future benefits already earned by its workers and retirees, GM would need to have $77 billion set aside, though it only has $20 billion banked for that purpose. This leaves Wagoner "walking a tightrope," needing to win concessions from Congress, such as having the government fund catastrophic medical bills, as well as from the United Auto Workers (UAW). (April 7, 2005) Dueling Massachusetts Plans to Cover the Uninsured Unveiled Source(s): Theo Emery, Associated Press (Apr. 6); Ann E. Donlan, The Boston Herald (Apr. 7); Scott S. Greenberger, The Boston Globe (Apr. 7); Scott S. Greenberger, The Boston Globe (Apr. 8). Republican Governor Mitt Romney of Massachusetts and Democratic State Senate President Robert Travaglini unveiled "dueling" health care proposals aimed at providing affordable health care coverage and reducing the number of uninsured in the state. Romney's plan would insure "virtually everyone in the state" by 2009, while Travaglini's goal is to provide coverage to half of the 500,000 uninsured residents by the end of 2006. Romney claims that his plan, called "Commonwealth Care," would cost about half the current cost of health care by offering less comprehensive coverage. By bringing down the cost of a basic insurance plan from about $350 a month to $200 a month for an individual, the plan would provide lower-cost coverage to about 168,000 uninsured people who cannot afford coverage at current rates. It would also expand Medicaid coverage to about 106,000 residents who are eligible but have not enrolled. Travaglini's "far-reaching" plan "goes further" than the governor's, according to the Boston Globe. His plan, which would draw on $168 million in state reserves, would make it easier for the uninsured to purchase their own coverage by encouraging insurers to offer affordable coverage to self-employed workers, employees of small businesses and others who do not have coverage. It would also boost Medicaid payments to hospitals and doctors that treat the uninsured by $90 million or more a year. By allowing patients to compare prices and quality of care, Travaglini says his plan would "unleash market forces to help contain costs." (April 6, 2005) Maryland Moves Closer to Employer Insurance Mandate Source(s): David Nitkin, The Baltimore Sun (Apr. 6); John Wagner and Michael Barbaro, The Washington Post (Apr. 6). A bill passed by the Maryland State Senate would make the state the first to tax large corporations that do not provide a mandatory level of employee health care benefits. Under the plan, called the Fair Share Health Care Fund Act, for-profit companies with 10,000 or more workers would be required to spend 8 percent of their payroll costs on health care or else pay the state a levy. Large non-profit organizations would have a 6 percent payroll requirement. Though there are four large Maryland companies covered by the bill, only Wal-Mart would be affected by the act because it does not meet the 8 percent threshold, though smaller businesses are "worried" that the measure would affect them in the future. Critics of the measure contend that lawmakers should not "target one company" and that the bill makes the state appear unfriendly to business. But supporters say that Wal-Mart employees and their dependents who do not receive health benefits are being subsidized by the state because they "disproportionately rely on Medicaid and other government programs." (April 6, 2005) Uninsured Americans Try to Lower Health Costs, But Often End Up Avoiding Care Source: Michael P. Regan, Associated Press (Apr. 6). Uninsured patients resort to "many unique strategies" to acquire affordable health care, reports the Associated Press. These range from travel to foreign countries where care may be cheaper, to intensive Internet searches for treatment information. But "toughing it out" is also common among those without coverage, according to Stuart Schear, director of next month's Cover the Uninsured Week campaign, sponsored by the Robert Wood Johnson Foundation. "It's estimated that nearly 18,000 people in the U.S. probably die each year because they do not have health coverage," Schear said. He also noted that high medical bills are the second-leading cause of personal bankruptcy. (April 6, 2005) More Pregnant Women Lack Health Coverage; Turn to Consumer-Driven Care Source: Vanessa Furhmans, Wall Street Journal (Apr. 5). As health premiums for family coverage rise and some dependents are dropped from coverage, more women lack coverage for pregnancy, reports the Wall Street Journal. About a quarter of working-age women lack employer health benefits or are not eligible for Medicaid. As a result, "pregnant women are by necessity and ingenuity paving the way in what is called 'consumer driven' health care." With the nation's 4 million annual births typically costing anywhere from $7,000 to $12,000 each, these women are "forced to navigate a murky system of health-care pricing and to make medical decisions based as much on checkbooks as maternal instinct." The task is both "daunting" and "an emotionally charged one that involves tough trade offs," with women worried about "alienating the doctors who will be handling the birth of their child." More employers are offering some type of consumer-driven plan that requires patients to bargain hunt, which is "exactly what many employers, health insurers and policymakers want patients to start doing to help control health costs." Maternity care is seen as a model for this approach, because families have months to evaluate options such as maternity discount care, prepackaged birth plans and less-expensive nurse midwives, the article reports. (April 5, 2005) Working Poor Faced with Soaring Costs Forced to Forego Heat and Food Source: Daniel Costelle, The Los Angeles Times (Apr. 4). A Los Angeles Times article profiles the "insured poor-those forced to make serious financial sacrifices in order to hold onto health coverage for their families, including skimping on food, heat, and car insurance; delaying home ownership; and not saving for their children's education. "Such sacrifices for health insurance are far from rare," as rising health care costs are forcing employers to ask their employees to shoulder more of the costs, or causing them to drop coverage altogether. Health costs have become "the single biggest expense" in some family budgets, with the number of people spending more than a quarter of their earnings on health care increasing by nearly a fourth, to 14.3 million people, between 2000 and 2004. According to Glenn Melnick, a Rand Corporation economist and a professor of health care finance at the University of Southern California, the "profile of the uninsured" will change over the coming years as soaring health care costs force more middle-class families to face harsh financial choices. Even now, 14 percent of those without insurance earn between $25,000 and $50,000 a year. "The newly uninsured will be more mainstream," he predicts. (April 4, 2005) Consumers Would Trade Choice in Health Provider for Lower Cost Source: Theresa Agovino, Associated Press (Mar. 24). A survey found that Americans with employer-sponsored health coverage are more willing to limit provider choice in exchange for savings in medical costs than in the past, reports the Associated Press. An annual study from the Center for Studying Health System Change found that 59 percent of Americans with employer-provided coverage would make that trade in 2003, compared to 55 percent in 2001. Low-income consumers were more likely to make the exchange to save on costs. Paul Ginsburg, president of the center, attributed the increase to higher premiums, deductibles and other health care costs paid by workers, which are the result of the rising health care costs faced by employers. The findings were "surprising," Ginsburg noted, because consumer preferences between choice and cost had been stable from 1997 to 2001. (March 24, 2005) Prestigious Health Care Administrators Call on Nation to Cover the Uninsured Source(s): Liz Kowalczyk, The Boston Globe (Mar. 24). The chief of Partners HealthCare System, Massachusetts' largest hospital and physician network, issued a national public appeal for higher taxes and employer mandates to solve the problem of the uninsured, reports the Boston Globe. In the New England Journal of Medicine, Dr. James Mongan, chief executive of Partners, and Dr. Thomas Lee, president of Partners' physician network, wrote, "How can a country as idealistic and generous as the United States fail repeatedly to accomplish in healthcare coverage what every other industrialized nation has achieved?" According to Mongan, Americans want universal coverage, but "shy away" from paying for it. The article appeared as Republican Governor Mitt Romney of Massachusetts and the State Legislature are preparing to debate how to expand coverage to the state's 460,000 uninsured. Romney and State Senate President Robert E. Travaglini (D) have ruled out the higher taxes and employer mandates that the Partners chiefs are advocating. According to Eileen McAnneny, vice president for government affairs for the employers' organization the Associated Industries of Massachusetts, employer mandates do not make sense because "most of the businesses that don't provide health insurance are small and they don't provide it because they can't afford to." (March 24, 2005) Tax Experts Tell Presidential Panel That Tax Credits Do Not Reduce Number of Uninsured Source(s): Mary Dalrymple, Associated Press (Mar. 24). Health insurance tax credits for employers and individuals do "more harm than good," tax experts told the President's Advisory Panel on Federal Tax Reform, reports the Associated Press. Tax experts Eugene Steuerle of the Urban Institute, and Mark Pauly, a professor of health care economics at the University of Pennsylvania, said that tax breaks "don't promote the spread of basic health insurance coverage," and instead encourage people to buy excess coverage so as to lower their taxes. This, in turn, leads to health care costs increases, which force some employers to drop coverage altogether. The panel's vice chairman, former Louisiana Senator John Breaux, asked tax experts about how best to use tax laws to decrease the number of uninsured. "It's the biggest problem, I think, in the country," said Breaux. Claiming that the current system disproportionately benefits the wealthy, Pauly recommended limiting tax subsidies for health coverage and combining them with a new, refundable credit to help low-income and uninsured people purchase coverage. The panel plans to issue a report this summer. (March 24, 2005) Employer Coverage of Retirees Declines, Especially for Early Retirees Source: Christopher Conkey, Wall Street Journal (Mar. 23). Fewer retired workers, especially early retirees, are receiving health coverage from their former employers, reports the Wall Street Journal. A report from the nonpartisan Employee Benefit Research Institute (EBRI) found that 29 percent of early retirees had employer-sponsored health coverage in 2002, compared to 39 percent in 1997. The percentage of older retirees who are eligible for Medicare and receiving such benefits also declined over the same period, from 28 percent to 25 percent. An aging population and soaring health care costs are partly responsible for the decline, but the survey cited a 1990 Federal Accounting Standards Board ruling that changed employers' financial reporting on retiree health benefits as the primary reason. EBRI said it expects the coverage declines to continue, and warned workers to "lower expectations for employer-based health coverage in retirement." (March 23, 2005) Senate Votes against Medicaid Budget Cuts Promoted by President Bush Source(s): Jonathan Weisman, The Washington Post (Mar. 18); Joel Havemann, The Los Angeles Times (Mar. 18); Tim Dillon, Associated Press (Mar. 18); Sheryl Gay Stolberg, The New York Times (Mar. 18). The budget approved by the Senate on March 17 "dealt a slap to President Bush and the Republican leadership" by abandoning most proposed deficit-reduction measures and restoring cuts to Medicaid, education, and other programs, reports the Washington Post. Opponents of the Medicaid cuts argued that federal and state experts needed time to work out changes to Medicaid "before Congress sets arbitrary spending limits" on it. Senator Gordon Smith (R-Ore.), who wrote an amendment to restore Medicaid dollars to the budget with Senator Jeff Bingaman (D-N.M.), said that cutting Medicaid "was a matter of life or death" to some of the program's low-income beneficiaries, according to the Los Angeles Times. "Those 52 million people are counting on us to do this right, not just to do it fast," he said. With a vote of 52 to 48 on the amendment, in which seven Republican senators joined with the 44 Democrats and one independent, the senators elected to restore $14 billion in Medicaid cuts and establish a one-year commission to explore measures to slow the program's growth. The Medicaid reductions, which total 1 percent of expected Medicaid spending over five years, "are the keystone of plans by Bush and GOP congressional leaders" for curbing federal deficits, reports the Associated Press. The Senate's move "set up a confrontation with the House," which earlier in the day approved its own version of the budget that "hews more closely to Bush's initial spending and tax proposals," reports the Los Angeles Times. Representative Jim Nussle (R-Iowa), chairperson of the House Budget Committee, said the Senate's Medicaid vote was "a setback" for Bush's domestic agenda. (March 18, 2005) Lack of Insurance Is One Reason Many Poor Women in Florida Fail to Get Mammograms Source(s): Mark Hollis, South Florida Sun-Sentinel (Mar. 15). New research conducted for the Florida Legislature shows that thousands of Florida women, especially low-income blacks and Hispanics who are uninsured, are not getting potentially life-saving mammograms, reports the Florida Sun-Sentinel. Only 4 percent of low-income women on Medicaid get a mammogram, even though Medicaid is supposed to cover the screen. "We cannot take this lightly," said Republican State Senator Evelyn Lynn. "It's getting harder and harder for people to have the access to this really basic and really vital health service." Medicaid reimbursements are "at the heart of the problem," according to the Academy of Florida Trial Lawyers. Twenty-one percent of all radiology centers in Florida will not accept Medicaid, leaving long lines at those that do. Republican Governor Jeb Bush wants to limit medical malpractice and restructure Medicaid. (March 15, 2005) Cancer Survival Shortened for Those Who Enroll in Medicaid after Diagnosis Source(s): The Washington Post (Mar. 14). Researchers found that people who do not enroll in Medicaid until after they have been diagnosed with cancer are most likely to die from the disease, and treating them "may be a waste of time," according to the Washington Post. The median length of survival for patients enrolled in Medicaid after disease diagnosis was 18 months, compared with 38 months for those who were already enrolled in Medicaid when they were diagnosed. The report, which was published in the journal Cancer and based on a review of the experiences of 13,740 people from the Michigan Tumor Registry, found that these patients usually lack insurance before their diagnosis and are unlikely to have been screened early enough for treatment to do much good. "From a policy perspective, cancer survival in the Medicaid population cannot be improved as long as 40 percent of the population enrolls in Medicaid with late stage disease," the Michigan State University researchers wrote. (March 14, 2005) Former Clinton Health Care Advisor Proposes Incentive-Based Program Focused on Providers Source(s): Roger Lowenstein, The New York Times Magazine (Mar. 13). Though Americans arguably "want health-care reform more urgently than anything else," the major reason that designing a national health care policy has not succeeded is because of the misconception that high costs are the major problem, and that curbing them is the solution, according to David Cutler, dean of social sciences at Harvard College, and the subject of a New York Times Magazine profile. Cutler helped draft the failed Clinton health care plan, and has been pondering what went wrong ever since. His new, "radically different" approach argues that most health care spending is good, because "it delivers positive, and measurable, economic value, and because it can do more things that Americans want." We should focus on improving the quality of care rather than reducing the consumption of it, according to the article. What Cutler imagines is a system "in which everyone could get insurance while free-market incentives would motivate health-care providers to be more effective as well as more efficient." He proposes broadening coverage with "a variant of the voucher system," in which the government finances Americans' health care with tax credits spent on private providers or insurers. Cutler's plan "would seem not to brake" the ongoing soaring health care spending. But he contends that a "more results-oriented, and a more health-conscious system" will mean that one will be able to buy care that is both better and cheaper. (March 13, 2005) Young Adults Make Up Large Portion of the Uninsured
Source(s): Thomas Lee, Star Tribune (Minneapolis) (Mar. 13). Young adults "get overlooked" in the debate on health care coverage because of their age and relatively low health risk, reports the Minneapolis Star-Tribune. However, Americans aged 19 to 34 comprise the largest group of adults who are uninsured, according to the Kaiser Commission on Medicaid and the Uninsured. From 2000 to 2003, the number of uninsured Americans under age 65 increased by 5.1 million, to 45 million. About 60 percent of them were in the 19-to-34 age demographic. Sudden catastrophic health care needs can "sometimes bankrupt" them. In addition, because they tend to be healthier, their absence from the health insurance market leads to rising health care premiums. However, being uninsured is not a choice for many young Americans entering a job market in which fewer companies offer coverage. The recent introduction of health savings accounts (HSAs) might prompt insurance companies to focus more on individual policies that tend to appeal to younger people. (March 13, 2005) Kerry Promotes Bill to Provide Universal Coverage to Children Source(s): Rick Klein, The Boston Globe (Mar. 10). Massachusetts Democratic Senator John Kerry continues to try to build momentum in Congress for providing universal health care for children, his biggest legislative priority, reports the Boston Globe. Speaking at a Capitol Hill news conference, Kerry said that 500,000 "citizen cosponsors" have signed up on his Web site to support his "KidsFirst Act," which would fund universal health care for children by repealing the tax cuts for those who earn more than $319,000 a year. The bill "faced long odds" in the GOP-controlled Congress, but Kerry said that his network of grass roots activists and lobbyists would campaign against Republican incumbents who do not support it. Several labor organizations, including the AFL-CIO, the American Federation of Teachers and the Service Employees International Union, have endorsed the bill and say they will lobby for it in Congress. Kerry has promised to use his influence as a former presidential candidate to ensure that Congress considers the bill. However, while he has signed up seven cosponsors, none of them are Republicans, which would be necessary for the bill "to have a realistic chance of passage." Republicans "scoffed" at his promise to target those who oppose his plan. (March 10, 2005) Senate GOP Leaders Look to Rein in Medicaid Source(s): David Rogers, Wall Street Journal (Mar. 8); Shailagh Murray and Jonathan Weisman, The Washington Post (Mar. 8). Recent Senate leadership meetings over Medicaid and tax targets "have frayed nerves," as Senate Republicans propose almost $14 billion in Medicaid savings over the next five years. With the "aggressive strategy" coming from Senator Judd Gregg (R-N.H.), the Senate's new Budget Committee Chairman, Medicaid promises to be the "biggest fight" in the debates. Gregg's budget "closely tracks" the net savings in President Bush's budget. The White House assumes gross Medicaid savings of about $20 billion over five years, and net savings of about $13 billion to $14 billion. "Offsetting tax breaks mostly for the affluent with spending cuts that could hurt the poor could be politically risky, particularly in the Senate, where moderate Republicans have already warned that the juxtaposition may be untenable," reports the Washington Post. Republicans tried to portray both the proposed tax and spending cuts as "modest," claiming that even with the cuts, Medicaid will still grow 7.3 percent next year, down only a bit from the current 7.6 percent growth. However, with the number of Medicaid recipients having grown 40 percent over the past five years, partially due to the fact that employers cutting back on health coverage have pushed low-wage workers into the program, "opponents do not buy that argument." (March 8, 2005) Companies Cut Benefits to Retired Workers' Dependents Source: Jennifer Saranow, Wall Street Journal (Mar. 3). The Wall Street Journal reports on the "wave of employers," including IBM and Boeing, that are cutting benefits to their retirees' dependents in order to lower their health care costs. Employers have already raised premiums for the dependents of current employees, and taken steps to encourage spouses to seek coverage from their own employers. According to a recent survey by the Kaiser Family Foundation and the consulting firm Hewitt Associates, 79 percent of large employers had increased retiree contributions to premiums in the preceding year, and 68 percent had increased contributions for dependent coverage. The result is that "retirees could be left bearing the brunt of covering their families, or left in the lurch if spouses with insurance elsewhere lose coverage." Companies say they "want to focus their resources on those who were actually employees." (March 3, 2005) Corporate Executives Worry More about Health Care Costs Than Social Security Source: Amy Martinez, The News and Observer (Raleigh, N.C.) (Mar. 3). According to a survey of 534 chief financial officers and corporate executives, respondents prefer that Congress "do something about the rising costs of health care" and the large federal deficit this year than try to change Social Security, reports the Raleigh News and Observer. The survey, done by Duke University and CFO magazine, included executives at companies "across a broad spectrum of the economy." It also found that CFOs overall "grew less optimistic" about the economy's direction in the past three months. Less than a third of them said it was very important that Congress tackle Social Security privatization. Geoff Chatas, CFO of the Raleigh utility Progress Energy, said, "That's something the country has to deal with, but Social Security isn't going to impact our medium- or short-term planning at Progress Energy. Deficit spending is a problem ... And we continue to be worried about escalating health costs." (March 3, 2005) Medicaid Battles Illustrate Nation's Health Care Funding Crisis Source(s): Gail Russell Chaddock, Christian Science Monitor (Mar. 3); The Economist (Mar. 5). Public funding of health care has increased dramatically over the past 40 years and is expected to continue to grow. While private funding covered about 75 percent of national health costs in 1965, public funding is expected to account for half of it by 2014, according to the Centers for Medicare and Medicaid Services. "How to manage that ever-increasing share of the health costs is emerging as a major battle between Washington and the states that only gets tougher as the baby boomers begin to retire," according to the Christian Science Monitor. President George Bush's proposed $60 billion cut in federal funds over the next 10 years is "central to meeting his promise" to halve the federal deficit, according to the Monitor. The Economist deems Bush's proposals, which "trim a mere two percent" from the federal Medicaid contribution, "extremely modest" when "set against [the] trajectory" of Medicaid costs that have increased 63 percent in five years. Other programs that provide health care to the poor are expected to increase by $15 billion, "so the net loss to the states would be even smaller." But the governors are opposed to Bush's proposal, which they consider "a simple shift from the federal budget, which can run deficits, to state budgets, which cannot," reports the Monitor. (March 3, 2005) More Companies Join Pool Offering Coverage to Part-Time Workers Source(s): Diane E. Lewis, The Boston Globe (Mar. 3). U.S. employers have increased the number of contract and part-time workers on their payroll, but many do not offer them health insurance, reports the Boston Globe. National Health Access is "the brainchild of 60 Fortune 500 companies that joined forces to attract insurers who would be willing to cover the firms' uninsured workers and their families." These "free-agent workers" comprised about 22 percent of the U.S. labor force last year, according to the article, and the potential insurance pool for this market is about 3 million people. The plan, which has gained 90 participants since it was announced last year, including EMC, IBM, Target and Sears Roebuck and Co., offers low-cost alternatives such as a $4 to $5-a-month medical discount for in-network care. Though the plan will not be funded by the companies, unlike traditional employer-based coverage, its supporters expect it to help reduce overall health care costs "by chipping away at the size of the nation's uninsured pool" of 45 million. (March 3, 2005) Wall Street Journal Examines Impact of Bush's "Ownership Society" on Health Care Source: Jackie Calmes, Wall Street Journal (Feb. 28). Health insurance is one of the areas in which President George Bush is pursuing his "ownership society" agenda, which is an attempt to "rewrite the government's social contract with citizens," according to the Wall Street Journal. Bush believes that "ownership changes behavior." Under his plan, Americans would assume more of the responsibilities and risks currently borne by the government, and in return would have more control of their lives, their retirement savings and their health care decisions. While "the nation's social safety nets would still exist," they would be "on a smaller scale, targeting the most needy. Others would move to private-market alternatives of their own choosing." When it comes to health care, Bush is putting "his ownership society into practice" by moving to "a system in which individuals shop for health care much like anything else," with the assumption that this will help curb rising health costs. High-deductible, tax-preferred health savings accounts (HSAs), which "allow people to pocket savings if they don't go to the doctor," are a centerpiece of the effort. Opponents worry that employers will "take advantage of the accounts to shift more costs to employees," and that they will only benefit the healthy and wealthy. (February 28, 2005) Governors Meeting Ends in Stalemate with Administration over Medicaid Source(s): Sarah Lueck, Wall Street Journal (Feb. 24); Robert Pear, The New York Times (Feb. 27); Ceci Connolly and Dan Balz, The Washington Post (Feb. 28); Robert Pear, The New York Times (Mar. 1); Associated Press (Mar. 1); Robert Pear, The New York Times (Mar. 2); Sarah Lueck, Wall Street Journal (Mar. 2); Ceci Connolly and Dan Balz, The Washington Post (Mar. 2). Medicaid "has taken on a greater sense of urgency" as the Bush administration looks to it as a way to cut the federal budget, while governors worry that cuts will further strain their budgets. President Bush told governors at the National Governors Association (NGA) winter meeting in Washington that he wanted to work with them on controlling Medicaid costs. Governors agree that the program is "unsustainable" in its current form. Many governors said they support Bush's ideas of changing the amount that Medicaid pays for drugs and restricting elderly people's ability to transfer assets so that they qualify for Medicaid coverage of nursing homes-measures that would save about $20 billion in federal funds. The governors "adamantly oppose" the budget cuts sought by the administration and Republican Congressional leaders. Some governors "balked at what they view as a threat by the White House" to cut $60 billion from the program over the next 10 years. "The administration wants a deal by the end of the week," said Democratic Governor Bill Richardson of New Mexico, chairperson of the Democratic Governors' Association. "We're going to resist that." (February 24, 2005) Health Spending Predicted to Double by 2014; Government to Pay Half of It Source(s): Robert Pear, The New York Times (Feb. 24); Sarah Lueck, Wall Street Journal (Feb. 24); Joel Havemann and Ricardo Alonso-Zaldivar, The Los Angeles Times (Feb. 24); Julie Appleby, USA Today (Feb. 24). Total health spending will double to $3.6 trillion in 2014 from $1.8 trillion last year, according to the Bush administration. The gross domestic product will grow more slowly over the same time period, meaning that spending on health care will be 18.7 percent of the economy by 2014, compared to an estimated 15.4 percent last year. The new Medicare drug benefit is largely responsible for the shift to more government expenditure, and prescription drugs are predicted to be the fastest-growing sector in health care, accounting for 14.5 percent of health spending by 2014, compared to 11 percent last year. The study predicts that the growth in overall health care spending will continue to slow, projecting that last year's growth will have increased by 7.5 percent, down from the 7.7 percent growth in 2003, reports the Wall Street Journal. The increase is projected to drop to 6.7 percent by 2014. Yet this growth still "outpace[s] growth in the overall economy." (February 24, 2005) Utah May Provide Model for Medicaid Reform Source(s): Kirk Johnson and Reed Abelson, The New York Times (Feb. 24). A front-page New York Times story notes that the Bush administration's "drive to change how Medicaid works" is modeled on Utah, where, as governor, Health and Human Services Secretary Mike Leavitt implemented a plan that provided basic care to more people by reducing coverage for some traditional beneficiaries and relying "on the generosity of doctors and hospitals to provide specialty services free of charge." But the "innovation" Leavitt introduced in Utah is one that "policy experts, doctors and advocates for the poor are deeply ambivalent about." Utah's plan "has in many ways reframed and reshaped the national debate over Medicaid" by shifting the focus from a question of who is covered to one of "what constitutes basic health coverage." In addition to containing costs, Leavitt wants to "address the problem of people without any insurance at all." He claims that a "main goal" of the administration is to provide coverage for the uninsured, which will require reducing benefits for some of those who now receive them. "Wouldn't it be better to provide health insurance to more people, rather than comprehensive care to a smaller group?" he asked in a recent speech. Critics say that such stripped-down coverage "is not really insurance at all" because it does not cover catastrophic care, and the care it does cover relies in part on the good will of doctors and hospitals to provide charity care. They also contend the required co-payments, while seemingly minimal, can reduce the use of necessary services. (February 24, 2005) Medicaid Rolls Rise in Florida Even as Number of Jobs Increases Source(s): John Kennedy, Orlando Sentinel (Feb. 20). A "sharp rise" in Florida's Medicaid rolls has come even as the state leads the nation in job creation, reports the Orlando Sentinel. Medicaid enrollment has climbed by 44 percent over the past six years, with a "vast number" of low-income working families making up the fastest-growing share of the 2.3 million state residents now receiving Medicaid. The program, which Republican Governor Jeb Bush is trying to reform, consumes about a quarter of the state's budget. Bush's "ambitious but controversial" plan would enroll recipients in private managed care programs. But many lawmakers, contending that there is a link between the rise in Medicaid recipients and the creation of low-paying jobs, "already are voicing fears that Bush's initiative may ultimately lead to cuts in health coverage for the poor." Democratic State Senator Skip Campbell, chairperson of the Senate's Children and Families Committee, said, "We're not creating the jobs we need to create," while Republican State Senate President Tom Lee acknowledged that "low-paying jobs tend to bring with them some challenges in terms of social-service [costs]." Bush said that enrollment is only the third-largest reason for Medicaid's cost increase, citing more frequent doctor visits and higher physician rates as the biggest cost drivers. A recent Kaiser Family Foundation study found that 44 percent of increased Medicaid spending was due to sharp enrollment increases by low-income families. (February 20, 2005) Massachusetts Governor Unveils Plan to Cover More Uninsured Source(s): Kimberly Atkins, The Boston Herald (Feb. 18); Alice Dembner, The Boston Globe (Feb. 18). Massachusetts Governor Mitt Romney (R) said that the health care reform plan he recently unveiled would "cut the number of uninsureds [sic] in the state while protecting more than $500 million in federal funds," reports the Boston Herald. A "key part" of the reform is Commonwealth Care, a low-cost coverage option for the quarter of the 460,000 uninsured people in the state who can afford insurance but do not buy it. The plan offers policies for less than $200 per month. Romney said the plan is not a "bare-bones" policy, but includes preventive care, mental health care and prescription drug coverage, reports the Boston Globe. "We want a first-class, excellent healthcare product," he said, predicting that the less-expensive plans would appeal to 168,000 of the state's uninsured. But some predict that more affordable plans will not necessarily attract buyers. "In the absence of some kind of stick, it's a hard sell," said Charles Baker Jr., president of Harvard Pilgrim Health Care. Romney's plan also features Safety Net Care, which targets the working poor who are ineligible for Medicaid, and would be run like a managed care network. Romney said this innovation would ensure that the state receives $600 million in federal funds. A third measure would enroll those who are eligible for Medicaid but have not signed up, according to the Herald. Romney said he wants to work with Democrats in the Legislature to get the measure passed by the end of the year. "Our desire here is the same," he said. "Get more people covered. Give them high-quality care." (February 18, 2005) Congress, Governors and HHS Head Begin Medicaid Negotiations Source(s): Associated Press (Feb. 17); Tony Pugh, Miami Herald (Feb. 17); Robert Pear, The New York Times (Feb. 18); Robert Tanner, Associated Press (Feb. 20); Howard Gleckman and Ann Therese Palmer, BusinessWeek (Feb. 21); Bret Schulte, U.S. News and World Report (Feb. 21); Margaret Talev, The Sacramento Bee (Feb. 21). Congress, governors and Health and Human Services Secretary Mike Leavitt began negotiating at a meeting of the Senate Finance Committee about the future of Medicaid and how to control its costs, reports The New York Times. Governor Mark Warner (D- Va.), chairperson of the National Governors Association, said the meeting was "the beginning of a process" to fundamentally alter the federal-state program that covers more than 50 million low-income Americans. Medicaid spending has increased 63 percent in the last five years, with federal and state outlays costing more than $300 billion a year. Governors "desperately want to slow" the program's growth, but fear that Congress will limit federal Medicaid spending, leaving the states to shoulder more of the costs. Michael Leavitt said the Bush administration wants to give states more freedom in how they administer their programs, and "crack down on what he described as abusive practices used by many states to maximize" federal Medicaid dollars. Medicaid is undergoing a "profound shift" in the way it is financed, according to a BusinessWeek article. Underlying the debate over the program's future is "the critical question of how Medicaid can survive as it shifts from funding medical care for the young poor to providing custodial care for the elderly and disabled." Though the program was designed as a "safety net for poor mothers and their children," two-thirds of Medicaid funds are now spent on seniors and the disabled. The program pays more than 60 percent of the nation's bill for nursing homes, compared to the 5 percent paid by Medicare, and costs are expected to rise as the 40 million baby boomers age. The White House "acknowledges this demographic reality" and is being praised by health experts for responding with more flexibility, according to the article. For example, the administration is expected to endorse using Medicaid funds for the elderly who are cared for at home rather than in institutions. (February 17, 2005) Texas Governor Warns That Rising Health Care Costs Are Bankrupting States Source(s): Clay Robison, The Houston Chronicle (Feb. 15); Mike Ward, Austin American-Statesman (Feb. 15). Texas Governor Rick Perry (R) warned that Texas and other states will soon be bankrupted by rising health care costs if the federal government and private employers do not help, reports the Houston Chronicle. He said that rapid increases in the number of people on Medicaid and the inability of businesses to afford coverage are the "two major challenges" facing state governments. Two years ago, the Texas Legislature cut thousands of children from the CHIP rolls, but Perry and legislative leaders now want to expand coverage, according to the article. Texas ranks 18th among states in the percentage of children covered by Medicaid, and 46th in the percentage of children covered by employer-sponsored insurance, according to the Austin American-Statesman. Perry called the employer statistic "alarming," and noted that the number of children receiving public coverage has doubled since 1999. Texas' Medicaid budget grew 90 percent from 1994 to 2003, with one out of every four state budget dollars now being spent on Medicaid. Medicaid and the Children's Health Insurance Program (CHIP) are important but were "meant to be a last resort" for low-income people, according to Perry. He is advocating for "new options to make private insurance more available and more affordable, including health spending accounts." (February 15, 2005) More Public Colleges Mandating That Students Have Health Coverage Source: John Seewer, Associated Press (Feb. 14). Though most public universities do not require students to have health insurance, a growing number are mandating coverage to save the uninsured from "huge bills and college hospitals from getting stuck with the cost," reports the Associated Press. Nearly all private colleges require coverage, and now about 25 percent of public ones do, including all of the 10 schools within the University of California system. Many schools do not require coverage due to the additional expense for students and concerns that the requirement will encourage students to attend other colleges. "What makes it a tough decision is the potential added costs," said Jim Mitchell, director of student health services at Montana State University, where insurance has been required for nearly 20 years. "But there's compelling reasons to do it," according to Mitchell. The article notes that the costs to uninsured students "can be staggering when they're hospitalized," and sometimes lead to bankruptcy. Uninsured students think they can get care at campus health centers, but the care available there is often limited, the article notes. Most public university students are still covered by their parents' plans, but between 10 percent and 30 percent are uninsured. (February 14, 2005) Older Workers Postpone Retirement or Return to Work as Companies Cut Health Benefits Source: Eduardo Porter and Mary Williams Walsh, The New York Times (Feb. 8). Many early retirees are returning to work "out of necessity," as many companies "withdraw retiree medical and dental benefits while others switch to less generous retirement plans," reports a front-page New York Times article. Older people have become the fastest-growing segment of the work force. Workers over age 55 made up 14.3 percent of the labor force in 2002, according to the U.S. Department of Labor, but are expected to make up 19.1 percent of it by 2012. Many of these retirees "say they feel that a social compact between workers and employers - a set of expectations established over the second half of the 20th century - is being dismantled." In 1988, two-thirds of all large employers offered health benefits to retirees. Last year, only about one-third did, and they were requiring retirees to bear more of the costs of coverage. For example, Lucent Technologies has been "aggressively paring the health insurance it offers its retirees, prompting older employees to rethink their retirement plans." The company supports nearly 120,000 retirees, whose health care last year cost about $775 million, an amount equal to 70 percent of the company's net profit. "We simply cannot afford to absorb U.S. retiree health care costs at this level and remain a sustainable, competitive company," Lucent notified its management retirees last September in explaining a new round of health benefit cuts. (February 8, 2005) Wall Street Journal Uses Mississippi as Example of Medicaid Crisis in States Source: Sarah Lueck, Wall Street Journal (Feb. 7). A front-page article in the Wall Street Journal looks at Mississippi, where Medicaid spending has doubled to $3.5 billion in five years, to illustrate how the program "is devouring state budgets across the country." One-quarter of Mississippi residents are enrolled in Medicaid, which Republican Governor Haley Barbour calls "a cancer on our state finances." To fund Medicaid, the state has curtailed road construction and may delay salary raises for teachers, yet the program is projected to run out of money by the end of this month unless the legislature passes an emergency appropriation. Barbour tried to move 50,000 state residents off the rolls last year but met with "fierce protests and a court battle." Most of these recipients were so-called dual eligibles-people who are also covered by Medicare due to age or long-term disability. The battle was largely over prescription drugs not covered by Medicare. Medicaid benefits "have steadily expanded over the decades" and now account for one-third of the budget of some states. A "state-versus-federal battle" over the jointly financed program "may be looming," with President Bush's new budget proposing cuts of about $60 billion over the next decade, along with a "broader overhaul" of the way the program is financed. States trying to cut costs "run into many roadblocks" due to current mandates that require them to cover many types of care. (February 7, 2005) Many Millionaires Plan to Work Past Retirement Due to Worry over Health Care Costs Source: Kathy Chu, Wall Street Journal (Feb. 3). A survey of millionaires found that "even significant assets can't eliminate worries over increasing health-care costs," reports the Wall Street Journal. Rising health care costs are one of the leading reasons why nearly half of working millionaires "plan to toil part or full-time during the retirement years," according to a survey from Northern Trust Corporation. With double-digit increases in the cost of both employer-sponsored premiums and retiree health benefits last year, more employers are cutting benefits for future retirees or asking them to pay more for them. (February 3, 2005) Tax Credits for Uninsured and Community Health Centers Get Brief Mentions in State of the Union Source(s): Doyle McManus and Edwin Chen, Los Angeles Times (Feb. 3); Robert Pear, The New York Times (Feb. 3); The Washington Post (Feb. 3). President George W. Bush's first State of the Union address of his second term "marked a significant political moment," reports the Los Angeles Times. For the first time since 1901, a Republican president won reelection with a majority of the popular vote along with "solid GOP majorities" in both the Senate and the House. In his speech, Bush "proposed an ambitious and wide-ranging agenda." However, his call for tax credits to help low-income workers buy health insurance was one of a "long list of proposals he had made over the last year" that "rated [no] more than a sentence or two, suggesting that [the issue] had dropped to a lower rung on Bush's priority list." When it came to the 45 million Americans who are uninsured, The New York Times reports that Bush "quickly recapitulated his proposals to expand coverage and to slow the rapid growth of health costs." He asked Congress "to move forward on a comprehensive health care agenda, with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical errors and needless costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform." (February 3, 2005) Half of Bankruptcy Due to Medical Bills -- U.S. Study Source: Maggie Fox, Reuters (Feb. 2). Half of all U.S. bankruptcies are caused by soaring medical bills and most people sent into debt by illness are middle-class workers with health insurance, researchers said on Wednesday. The study, published in the journal Health Affairs, estimated that medical bankruptcies affect about 2 million Americans every year, if both debtors and their dependents, including about 700,000 children, are counted. "About half cited medical causes, which indicates that 1.9 to 2.2 million Americans (filers plus dependents) experienced medical bankruptcy," they wrote. "Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness." The average bankrupt person surveyed had spent $13,460 on co-payments, deductibles and uncovered services if they had private insurance. People with no insurance spent an average of $10,893 for such out-of-pocket expenses. "Even middle-class insured families often fall prey to financial catastrophe when sick," the researchers wrote. Bankruptcy specialists said the numbers seemed sound. "From 1982 to 1989, I reviewed every bankruptcy petition filed in South Carolina, and during that period I came to the conclusion that there were two major causes of bankruptcy: medical bills and divorce," said George Cauthen, a lawyer at Columbia-based law firm Nelson Mullins Riley and Scarborough LLP. "Each accounted, roughly, for about a third of all individual filings in South Carolina." Dr. Steffie Woolhandler, a Harvard associate professor and physician who advocates for universal health coverage, said the study supported demands for health reform. "Covering the uninsured isn't enough. We must also upgrade and guarantee continuous coverage for those who have insurance," Woolhandler said in a statement. She said many employers and politicians were pressing for what she called "stripped-down plans so riddled with co-payments, deductibles and exclusions that serious illness leads straight to bankruptcy." (February 2, 2005) HHS Secretary Leavitt Calls for "Sweeping Changes" to Medicaid Source(s): Robert Pear, The New York Times (Feb. 2); Sarah Lueck, Wall Street Journal (Feb. 2); Ricardo Alonso-Zaldivar, The Los Angeles Times (Feb. 2). In his first speech as newly confirmed secretary of health and human services, Michael O. Leavitt called for "sweeping changes in Medicaid," including cutting prescription drug payments and giving states "new power to reduce or reconfigure benefits." Medicaid spending has increased 63 percent in the last five years, and now the program costs the federal and state governments more than $300 billion a year. According to the Congressional Budget Office, the costs will grow an average of 7.8 percent a year in the coming decade, compared to its average 7.9 percent growth in the prior decade. Leavitt said that implementing several options could save the program more than $50 billion in the coming decade. One of the "biggest changes" he proposed was providing "a more flexible package of benefits" for women and children in low-income families. He also proposed paying lower costs for prescription drugs, limiting the ability of elderly people to transfer financial assets to their children so that they can get Medicaid to cover long-term care, and having the federal government crack down on "accounting gimmicks" used by the states to shift costs to the federal government. Leavitt predicted a "very uncomfortable" conversation with the states about slowing Medicaid growth. However, he said the administration is not planning to propose a block grant for Medicaid or "cut available resources." The plan, which President Bush will submit as part of his budget next week, would retain coverage for mandatory recipients such as low-income pregnant women. But Leavitt "signaled big changes for the way the program treats 'optional' recipients." (February 2, 2005) Health Care Costs of Aging America Pose More Challenges Than Social Security Source(s): Robin Toner, The New York Times (Feb. 1); Jonathan Weisman, The Washington Post (Feb. 2). The debate over Social Security that is expected to be a theme of the nation's domestic political agenda this year is "a relatively small sliver of the far larger challenges posed by an aging population.". A recent New York Times/CBS News poll found that Americans do not consider Social Security to be "the most important problem facing this country today." Instead, the economy, the Iraq war, terrorism, jobs and health care ranked higher in importance, reports The New York Times. Though overhauling Social Security "is not nearly as complex as reinventing the 15 percent of the American economy that the health care system accounts for," President Bush's Social Security proposal could meet the same fate as President Clinton's attempt to institute universal health care 12 years ago, according to The Times. Spending on the elderly will total nearly $1.8 trillion, or almost half the federal budget, in 10 years, reports the Post. Most of the cost comes from Medicare and Medicaid, whose costs are projected to more than double to $1.2 trillion in 2015, compared to $473 billion last year, and "dwarf the problems of Social Security." Bush has "offered no plan to slow the sharper growth in federal health care spending" beyond the Medicare prescription drug benefit. While a report from the Center for Strategic and International Studies claimed that no challenge "is as certain as global aging," other economists say demography is less of a problem than "a health care system that is the world's most expensive and least efficient." (February 1, 2005) Washington Post Examines Suits Saying Nonprofit Hospitals Overcharge the Uninsured Source(s): Ceci Connolly, The Washington Post (Jan. 29). Nationwide class-action lawsuits claim that nonprofit hospitals that are "often flush with cash, opulent buildings and high-paid executives," and receive tax breaks for so-called charity care, also often overcharge the uninsured, reports the Washington Post. The 46 suits filed in 22 states on behalf of the uninsured allege that the hospitals "violate their tax-exempt status by charging uninsured patients the highest rates and employing abusive tactics to collect." The article profiles an uninsured heart patient in Mississippi, who earns $18,000 as a cook, and was sued for the balance of his $4,500 bill, along with legal fees, when he requested more time to pay it off. The American Hospital Association (AHA) said hospitals "are among the most generous businesses in the nation and it is unfair to blame them for a larger social problem." AHA Executive Vice President Rick Pollack said, "We don't think lawsuits are the answer to the problem of the uninsured." Richard F. Scruggs, an attorney who led a successful fight against the tobacco companies and is the lead attorney in the hospital lawsuits, said he is "pessimistic that politicians will tackle a system" where 45 million people are uninsured and those with coverage are paying double-digit premium increases. "Courts have traditionally stepped in to the breach as a safety net when the political branch couldn't act," he said. However, the legal fight "has been slow going" so far, with a federal panel of judges refusing to consolidate the cases and some courts rejecting the argument that uninsured patients can legally pursue hospitals for Internal Revenue Services violations. (January 29, 2005) 60 Companies to Sponsor Low-Cost Health Coverage for Uninsured Source(s): Milt Freudenheim, The New York Times (Jan. 27); Vanessa Fuhrmans, Wall Street Journal (Jan. 28). General Electric, IBM, McDonald's and Sears, Roebuck are among 60 large employers joining together "in a novel attempt" to sponsor low-cost health insurance to cover uninsured part-time and temporary workers, contractors, consultants, and early retirees, reports The New York Times. Though the program could benefit some 3 million workers and their dependents, or nearly 7 percent of America's 45 million uninsured, the corporate sponsors "acknowledged that these low-cost plans will not by themselves solve the problem of the uninsured." The employers said "they ultimately pay for the uninsured as hospitals pass on their costs for nonpaying patients." They hope that "government policy makers might consider this approach" as well. The program, which will begin in the fall and last for at least two years, is not subsidized by the employers, but creates a large enough pool for them to offer lower rates than the workers would have to pay on their own. Participants in the program can elect to buy various levels of coverage, ranging from $4.41 a month for discounted medical and pharmaceutical services, to more than $300 a month for a high-deductible health savings account, reports the Wall Street Journal. According to Tom Beauregard, a health strategy specialist at benefits consultant Hewitt Associates, the number of uninsured will "rise significantly" over the next five years, as union jobs decline and the number of workers employed by small companies increases. "It is extraordinarily important to address the issue of the uninsured for social, economic and even moral reasons," he said. (January 27, 2005) Medicaid Spending Grew by a Third from 2000 to 2003, Study Reports Source: Reuters (Jan. 26). Medicaid spending grew by about one-third from 2000 to 2003, due to job losses and other economic factors that made more people uninsured and eligible for the program, according to an Urban Institute study. The jointly funded federal-state health care program for the poor "looks set to be a major source of controversy this year," reports Reuters. In his upcoming budget, President Bush is expected to request funding caps for the program, or try to convert it into block grants to the states, measures opposed by governors from both parties. While some states are trying to cut spending by limiting enrollment, the study's authors point out that the alternative to more Medicaid patients is "more uninsured Americans." (January 26, 2005) Small Businesses Find Ways to Offer Employees Health Coverage Source(s): Sarah Rubenstein, Wall Street Journal (Jan. 24). Many small-business owners are finding it increasingly difficult to provide health coverage for their workers, reports the Wall Street Journal. The article examines some of the strategies, such as high-deductible plans, health savings accounts (HSAs) and opt-out incentives, that are used by the fewer than half of the 600,000 member companies in the National Federation of Independent Business (NFIB) that provide health coverage for their employees, despite the "steep upward spiral of health costs." According to the NFIB, HSAs have made coverage affordable for many small-business owners. About 4 percent of its members are currently providing coverage through HSAs or similar high-deductible health reimbursement accounts- policies in which company contributions help cover initial expenses. A survey by the Kaiser Family Foundation and the Health Research and Educational Trust found that 26 percent of small businesses say they are very or somewhat likely to offer such plans in the next two years. (January 24, 2005) Incoming HHS Head Discusses Planned Medicaid Overhaul Source(s): Robert Pear, The New York Times (Jan. 19). Speaking to a Senate committee reviewing his nomination, incoming Health and Human Services Secretary Michael O. Leavitt said reshaping Medicaid to slow its costs would be a "theme" for the administration this year, reports The New York Times. Leavitt said "greater flexibility" in how states administer Medicaid and trim benefits would allow them to provide health insurance to more people at no additional cost. Spending on Medicaid, which provides health care to more than 50 million low-income people, has increased by 63 percent in the last five years, and costs the federal and state governments $300 billion a year. While governor of Utah, Leavitt used a federal Medicaid waiver to offer a "limited benefit plan" to the uninsured not normally covered by Medicaid. He said that Utah's experience "could be a model for other states to study." The plan did not include hospitalization or specialty care, according to Utah state officials, but the state negotiated free care with the hospitals. Leavitt's position has changed since 1997, when he opposed federal efforts to cap Medicaid money but give states more flexibility with how they use the funds. His earlier position is now held by bipartisan governors concerned about the Bush administration's Medicaid proposals. (January 19, 2005) Drug Companies Launch Program to Provide Discounted Medications to the Uninsured Source(s): Robert Pear, The New York Times (Jan. 12); Sarah Lueck, Wall Street Journal (Jan. 12); Sam Hananel, The Washington Post (Jan. 12). Ten major pharmaceutical companies announced the beginning of a new program to lower the retail prices of prescription drugs sold to low-income, uninsured people by 25 percent to 40 percent. "The drug makers, like many Democrats in Congress, painted a grim picture of life without health insurance, saying that millions of Americans went without life-saving drugs because they lacked coverage," reports The New York Times. Though the federal government has no role in the program, Health and Human Services Secretary Tommy Thompson joined drug company executives at a news conference to announce the initiative, reports The Times. The program, called Together Rx Access, will give enrollees a discount card with which to "obtain substantial savings at local drugstores," according to The Times. The card will be available to U.S. residents under the age of 65 with annual incomes of up to $30,000 for an individual, or $60,000 for a family of four who have no other source of drug coverage. As many as 36 million working-age, low-income uninsured Americans may qualify for the card, reports the Wall Street Journal. The card will provide discounts on more than 275 brand-name pharmaceuticals and many generic drugs, reports the Washington Post. The new drug benefit could cover 80 percent of the 45 million U.S. residents who are uninsured and don't have prescription drug coverage, according to Roba Whiteley, executive director of Together Rx Access. However, based on experience with other discount cards, including those endorsed by the government for Medicare beneficiaries, the number of those who sign up may be much lower, according to The Times. (January 12, 2005) Health Care Costs Are Americans' Major Health Policy Concern, Survey Shows Source(s): Jim Abrams, Associated Press (Jan. 11); The Atlanta Journal-Constitution (Jan. 11); Marsha Shuler, The Advocate (Baton Rouge, LA) (Jan. 12). The Bush administration often cites malpractice lawsuits as a driver of high medical bills, but most Americans see health care and insurance costs as "a more pressing problem," reports the Associated Press. According to a survey by the Kaiser Family Foundation, 63 percent of respondents placed lowering the cost of health care and insurance at the top of a list of 12 health care priorities for the president and Congress, followed closely by making Medicare more financially sound and increasing the number of insured Americans. Reducing malpractice jury awards ranked 11th as a priority. While increasing the number of Americans with insurance ranked high on the survey, "there was little agreement" on how to do so. Forty-five percent of respondents said they would be willing to pay more in taxes or insurance premiums to expand coverage to the uninsured, while 51 percent said they would be unwilling to do so. (January 11, 2005) Nation's Health Care Spending Hits Record Percentage of GDP Source(s): Robert Pear, The New York Times (Jan. 11); Sarah Lueck, Wall Street Journal (Jan. 11). Though the "torrid" rate of growth in national health care spending slowed a bit in 2003, the $1.7 trillion of spending still "topped 15 percent of the gross domestic product for the first time," reports The New York Times. The rate of growth in 2003 was 7.7 percent, down from 9.3 percent the previous year, according to the government's annual report on health care spending. A slower rise in public spending on Medicare and Medicaid and a slower increase in drug spending accounted for the slowed rate of increase, reports the Wall Street Journal. However, out-of-pocket spending by consumers increased by 7.6 percent, compared to the 6 percent increase in 2002. The increase in out-of-pocket payments was the only major component of health spending that increased faster in 2003 than in 2002, according to The Times. The rising number of uninsured, coupled with employers requiring employees to share more of their health care costs, accounted for the increase in out-of-pocket payments, which marks the first time that private spending on health care grew faster than public spending in the last decade. For example, prescription drug costs accounted for 11 percent of national health spending, but 23 percent of out-of-pocket expenditures for consumers. (January 11, 2005) Consumers Wary of Health Savings Accounts, According to Survey Source(s): Milt Freudenheim, The New York Times (Jan. 11). A survey shows that most people are "wary" of health savings accounts (HSAs) because they do not want to risk having to spend more on their medical bills, reports The New York Times. Only a handful of employers have begun to offer the tax-preferred accounts, which combine low monthly premiums with high deductibles, and very few employees have chosen them. Less than a third of insured workers have even heard of HSAs, according to the survey by Watson Wyatt, a benefits consulting firm. When hearing a description of HSAs, 66 percent of those surveyed said that paying the full price of prescription drugs until coverage kicks in "seemed extremely undesirable," and 57 percent did not want to increase their deductibles at all. Though about half of employers are considering HSAs "as a way of shifting more of their rapidly rising medical costs to workers," a separate survey by Hewitt Associates, another benefits consulting firm, found that only 3 percent would offer the accounts this year. (January 11, 2005) Health Care Poised to Become Big Issue as Bush Promises to Cut Budget in Half Source(s): Julie Rovner, CongressDaily (Jan. 6). Though health care is not one of the main items on President Bush's agenda for the coming year, many policy analysts predict that, with government health programs consuming about 25 percent of federal dollars, "health-related issues will be front and center nonetheless," reports CongressDaily. If Bush plans to cut the deficit in half in five years, Medicare and Medicaid will have to be part of the cuts, and Medicaid "is in the budget crosshairs" for the first time in years. This led a bipartisan group of governors to launch a "preemptive strike" at the end of last year, asking in a letter to congressional leaders that Medicaid be considered separately from other budget items. Health care remains an "issue of significant interest" to voters as well, even though it was less "pivotal" in recent elections than had been predicted, according to Robert Blendon of the Harvard School of Public Health. Problems with the health care system are considered a "chronic disease" that voters have little influence over, because "policymakers have failed to address the twin problems of rising health costs and the uninsured," according to Blendon. He predicts that the health concerns of voters will increase over the next year or two. (January 6, 2005) New Jersey Tries Innovative Plan to Expand Coverage Source(s): Associated Press (Jan. 5); Susan K. Livio, Newark Star-Ledger/>Newark Star-Ledger (Jan. 6). New Jersey plans to reform the way it administers FamilyCare, a state program providing free health insurance to the working poor, to make it easier for more low-income people to enroll in the program. The two Democratic state lawmakers proposing the changes said "it is time to prioritize health care as a basic right for all New Jerseyans," reports the New Jersey Star-Ledger. "We simply cannot afford to wait for a better economy." The program now covers about 106,000 children and 108,000 adults. There are currently an estimated 1.2 million uninsured residents in the state, including 250,000 children. Proposals being considered include reopening the program to the parents of eligible children and to childless low-income adults, a buy-in option for families that make slightly too much, a simplified enrollment form, and cuts in administrative costs. "The program ... pays for itself in more ways than you can imagine, and not just in dollars and cents but in terms of real lives," said Democratic State Senator Joseph Vitale, a co-sponsor of the reform package. The reforms will cost the state an additional $23 million on top of the $400 million in state and federal funds currently allocated to it. An additional 200,000 children and adults could be phased into the program over the next three years. Cost savings are expected in terms of fewer emergency room visits, better preventive care and less charity care. Representatives from pharmaceutical and managed care companies said they were willing to lower their costs if FamilyCare expansions bring them new customers. Democratic acting Governor Richard J. Codey also supports the proposal. (January 5, 2005) Health Savings Accounts Off to a Slow Start Source(s): Milt Freudenheim, The New York Times (Dec. 6). The high-deductible, tax-preferred health savings accounts (HSAs) favored by the Bush administration as a means to rein in health care costs are "off to a slow start," though most big insurance companies, including Blue Cross, are "pushing the new accounts," reports The New York Times. Surveys show that as many as three-fourths of employers plan to offer the accounts in 2005. Securities analyst Charles Boorady of Smith Barney estimates that up to 5 million people have some sort of high-deductible plan now, and predicts that up to 50 million will have one in the next five years. Other estimates, however, are more cautious. William McKeever, a health care analyst at investment banking firm UBS, said his company's survey of the insurance market estimates that it will be at least three to five years before HSAs are "widely purchased by employers." According to the article, the plans are not expected to save money for consumers for some time, because even employees paying ever-increasing out-of-pocket costs are hesitant to shift to HSAs, which are "intended to appeal to healthy workers and families." (December 6, 2004) Most Health Care Experts Strongly Endorse Universal Coverage, but Disagree on Methods Source(s): Steve Lohr, The New York Times (Dec. 6). Among health care experts, though not among politicians, "there is a surprising consensus that the United States must inevitably adopt some kind of universal coverage," reports The New York Times. Proposals "vary widely," ranging from a single-payer system to government subsidies to mandated minimum coverage paid by employers or individuals. Health care experts "contend that the issue must be addressed" and "agree that moving toward universal coverage would surely save lives and maybe dollars as well." According to the article, deciding on a universal coverage plan requires addressing three questions: 1) Should change be incremental or drastic? 2) What role should the government play? and 3) Who should be covered? The article focuses on two health care experts advocating different approaches. Noting that administrative costs represent 31 percent of total health care spending in the U.S., Dr. David Himmelstein of the Harvard Medical School favors a "fairly sweeping overhaul" that eliminates much of the "middlemen" bureaucracy of insurers and creates a government-run, single-payer system akin to providing Medicare for all. Dr. William W. McGuire, chief executive of the UnitedHealth Group, one of the country's largest insurers, opposes a single-payer system. Instead, he favors mandatory coverage "based on the concept of an essential benefit" that covers hospital care and preventive care, but not such things as shoulder surgery for golfing pain or drugs for erectile dysfunction. Employers would be required to pay for their employee's essential benefits, self-employed people would pay for their own coverage, and federal and state governments would subsidize the cost of coverage for those who could not afford it. (December 6, 2004) Republicans Look at Possible Medicaid Caps to Slow Spending Source(s): Sarah Lueck, Wall Street Journal (Dec. 3); BNA (Dec. 7). Medicare and Medicaid "could be headed into the crosshairs of budget cutters" in Congress, reports the Wall Street Journal. Together, the two programs cost the federal government $473 billion a year and account for almost one-quarter of U.S. government spending, making them "juicy targets for fiscal conservatives." While deficit hawks are looking at ways to cut payments to Medicare providers, though not to seniors themselves, they see potentially bigger savings in Medicaid, which is jointly funded by the federal and state governments. President Bush and Republican members of Congress wanting an "overhaul of the rapidly growing program" may propose capping federal contributions, which they unsuccessfully tried in the past. The plan would have given states more control over how they design their Medicaid program and allocate benefits. However, because the cap limited federal outlays, many states "saw it as a shift of costs that would stick them with tough choices about what to cut," and it received little support from the nation's governors. Democrats and advocates for the poor also oppose a Medicaid cap, seeing it as "an attempt to sharply cut benefits and destroy the open-ended nature of the program," according to the Journal. "In an effort to forestall a possible Medicaid reform proposal in the president's fiscal year 2006 budget," Senate Democrats, led by Sen. Jeff Bingaman (N.M.), a member of the Senate Finance Committee, are circulating a letter urging the Bush administration not to cap Medicaid funding or eliminate coverage for vulnerable beneficiaries, according to BNA, a publisher specializing in legal and regulatory issues. The letter said that Senate Democrats "want to help the administration identify structural changes that enhance state flexibility without compromising beneficiaries." (December 3, 2004) Bush Administration May Eliminate Tax Break for Employer-Sponsored Coverage Source(s): Jonathan Weisman, The Washington Post (Dec. 3). President George Bush's market-oriented economic policies explain why he is considering eliminating the tax deduction employers receive for providing their employees with health insurance, reports the Washington Post. According to this year's Economic Report of the President, this deduction "unfairly subsidizes employees of some companies while encouraging overly generous health policies that focus on routine medical care." Noting that, "If automobile insurance were structured like the typical health policy, it would cover annual maintenance, tire replacement and possibly even car washes," the report recommends health insurance "focus on large expenditures that are truly the result of unforeseen circumstance" and "provide a more standardized tax treatment of all health care markets." Critics of this approach argue that health care "is fundamentally different" from automobile care because routine, preventive health care can potentially save the health care system the enormous costs of treating preventable diseases at a late stage. (December 3, 2004) Rate of Growth in Health Care Costs to Employers Slows for First Time Since 1999 Source(s): Reed Abelson, The New York Times (Nov. 22); Vanessa Fuhrmans, Wall Street Journal (Nov. 22); Gary Cohn, The Los Angeles Times (Nov. 22). The growth rate in employers' health insurance costs for their employees rose 7.5 percent in 2004, the lowest increase since 1999, reports The New York Times. In 2003, the average rate of increase was 10.1 percent. The slowed rate, found in an annual survey from Mercer Human Resources Consulting, was largely due to employers shifting more of the cost onto their employees and changing the kinds of plans they offer, as well as smaller premium increases charged by health insurers. "What we've seen for a couple of years running now is that employers have made very significant changes to their programs," said Barry Schilmeister of Mercer. However, overall health care costs remain a concern. "Underneath it all, while general inflation is 2 percent, medical inflation continues to be 10-plus percent," he said. The survey also found that employees should "expect to keep paying more for their health care," as a fifth of employers surveyed said they expected to increase costs paid by their employees. (November 22, 2004) Wall Street Journal Poll Find Strong Support for Helping Uninsured Source(s): Becky Bright, Wall Street Journal (Nov. 22). Initiatives that help Americans get health insurance "have wide-reaching public support," according to the latest Wall Street Journal Online/Harris Interactive health care poll. The poll asked respondents their view on several health care reforms that might be enacted by President Bush and Congress in the next two years. Ninety percent of those polled support association health plans that would allow small employers to band together to buy health insurance for their employees, and 83 percent support expanding tax-free health savings accounts so that more people can afford health insurance coverage. Forty-two percent of those polled support creating new tax credits for the uninsured to pay for their health coverage. (November 22, 2004) Kerry Promises to Introduce Legislation to Cover All Children Source(s): Dan Balz, The Washington Post (Nov. 20). In spite of his recent defeat in the presidential election, Democratic Senator John Kerry "demonstrated his determination to be the leader of the opposition," charging that President George Bush is, among other things, avoiding "real reforms in health care," reports the Washington Post. Kerry promised in an e-mail to supporters to "introduce legislation to provide health care to every child-a scaled-back version of his campaign plan for expanded access to health care coverage-when the Senate convenes next year." By choosing health care as his first post-election issue, Kerry "showed he is also willing to tread on turf long claimed by other Democrats, particularly Edward M. Kennedy, Massachusetts's senior senator." (November 20, 2004) Finding Health Insurance Is a Challenge for Those Aged 50 to 64 Source: Sarah Rubenstein, Wall Street Journal (Nov. 16). Getting health insurance is a "particularly tough problem for people aged 50 to 64," who are "often vulnerable to layoffs or pushed into early retirement" when they are too young for Medicare. And those who intentionally retire early are increasingly seeing the benefits they expected from their former employer scaled back. These problems mean that "many in this pre-Medicare age group find themselves in the individual insurance market at the very time they are developing health problems that scare insurers." For many insurers, the risk of taking on older-age customers, especially if they have any health issues, comes with a high premium price. A study by the Urban Institute found an 18 percent uninsured rate for middle-income consumers aged 55 to 64 years old who reported being in "good" health, compared to a 9 percent uninsured rate for those who said they were in "very good" or "excellent" health. This suggests that "the near elderly with some health issues may have difficulty getting affordable insurance" just when they are most likely to need it. (November 16, 2004) Economists Rank Health Care Reform Third on Bush's Economic To-Do List Source: Tim Annett, Wall Street Journal (Nov. 12). The 55 economists who participated in the Wall Street Journal's November online economic forecasting survey ranked eight major economic problems facing the second Bush administration. Narrowing the budget deficit and tackling Social Security reforms were at the top of their to-do lists, followed by health care reform. Noting that many companies have complained that soaring health benefit costs have interfered with hiring and investment, the economists said that the rising cost of health care was one issue that "should get a hard look from the White House over the next four years." However, in a ranking of what they predicted would be the president's greatest successes, reforming the tax code and reviving the job market topped the economists' list, while health care ranked seventh, or second from the bottom. (November 12, 2004) Poll Finds Consumers Want Health Care at Top of Congressional Agenda Source(s): John MacDonald, Hartford Courant (Nov. 11). A poll from the Blue Cross Blue Shield Association found that consumers want Congress to address rising health care costs as a top domestic agenda item. Forty percent of consumers cited a combination of rising health care and prescription drug costs as a priority for the incoming Congress, slightly behind the economy and jobs (41 percent) and far ahead of Social Security (29 percent) as competing domestic priorities. Nearly two-thirds of those polled said their out-of-pocket health care costs had risen last year. A separate poll in the journal Health Affairs found that a "backlash" against managed care, which developed in the second half of the 1990's when consumers demanded more choice, might be abating. Four years of double-digit cost increases have forged new attitudes in consumers, who are again willing to "reconsider money-saving measures" such as managed care gatekeepers for specialist referrals and substituting less expensive drugs. (November 11, 2004) Kansas Plans to Cover up to 110,000 Uninsured Source(s): Phyllis Jacobs Griekspoor, Wichita Eagle (Nov. 10); John Milburn, Associated Press (Nov. 13). With a new $50 million plan to "attack administrative costs within the health care system and provide state insurance coverage to 70,000 additional residents," Kansas "has joined the list of states where officials are attacking rising health care and insurance, deciding not to wait for the federal government to provide relief," reports the Associated Press. "We're really heading for a crisis, so I think we've got to take some very aggressive action and do it now," said Democratic Governor Kathleen Sebelius. "Waiting for a federal solution, a global solution, really is not acceptable at this point." Sebelius and Republican Insurance Commissioner Sandy Praeger also want to provide coverage to an additional 30,000 to 40,000 low-wage workers by subsidizing health plans for small businesses. "We are planning to let businesses be part of the process," Sebelius said. The plan would pay for itself with an increase in the state's cigarette tax by 50 cents a pack. Sebelius said taxing cigarettes is "in keeping with the promotion of healthy lifestyles because it taps a risky behavior that costs Kansans an estimated $700 million annually in health care charges," reports the Wichita Eagle. (November 10, 2004) New Low-Cost Drug Program Aimed at the Uninsured and Low-Income Workers Source(s): Judith Vandewater, The St. Louis Post-Dispatch (Nov. 9); Mark Sherman, Associated Press (Nov. 9). Express Scripts Inc. of St. Louis is launching a new program that will make deeply discounted generic drugs available to the uninsured and underinsured via mail order, reports the St. Louis Post-Dispatch. The company "will use its bulk-buying clout to purchase low-cost drugs for the program," and will redirect any profit back into the program to "ensure that it's a long running success," according to the article. The new program, called Rx Outreach, is open to those earning a maximum of 250 percent of the federal poverty level ($23,275 a year for an individual or $47,125 for a family of four). The company said more than 108 million Americans qualify, and estimated that between 35 million and 40 million people who take generic drugs might find savings through the program, reports the Post-Dispatch. While many manufacturers of branded drugs offer discounts to low-income patients, the new program is a first for makers of generics. (November 9, 2004) Series Looks at Maine's Uninsured Problem and Ambitious Program Aimed at Universal Coverage Source(s): Josie Huang, Portland Press Herald (Nov. 7); Josie Huang, Portland Press Herald (Nov. 8). A two-part series in Maine's Portland Press Herald looks at the state's problems with high health costs and high numbers of uninsured, as well as its closely watched attempt to solve them. The first article describes how "the high cost of health insurance in Maine has thrown up walls around low-income workers" who earn too much to qualify for government help, but too little to afford coverage. Nearly 11 percent of Mainers lack insurance, which is lower than the national average but the highest rate in New England. Democratic Governor John Baldacci's health reform initiative, Dirigo Health, has drawn national attention by "attempting to tame health care costs, make insurance more affordable and improve the quality of health services all at the same time." DirigoChoice for the businesses "burst onto the commercial market" on October 4, and in January, the state is launching a version for indiciduals, which offers 100 percent coverage for preventive services and discount premiums for those making up to three times the poverty level. However, "critiques of the reform act highlight fierce philosophical differences over how to revamp the health care system. How involved should government be-and how much should be left to the free market?" (November 7, 2004) Hospitals Struggle to Bring Billing of the Uninsured Down to What Insured Pay Source(s): Liz Kowalczyk, The Boston Globe (Nov. 7). "One of the strangest twists of the U.S. health care system" is that the uninsured often pay up to four times as much as the insured for the same services, because they pay the full price while insurers "negotiate steep discounts," reports the Boston Globe. In this "imbalanced system," the poor are covered by public programs, the wealthy have private insurance and the middle class without health insurance are the ones who end up paying the "sticker price." This inequity is "the subject of a growing number of patient complaints, lawsuits and congressional hearings." The article profiles Massachusetts General Hospital in Boston, where "executives said hospitals are caught in a system that doesn't necessarily make sense, but that is difficult to alter." Since 1965, Medicare provisions had required hospitals to have a uniform list of charges as a way to protect Medicare charges, and hospitals believed that this rule prohibited them from discounting charges to self-pay patients. On the other side, hospital administrators worry that health insurers that expect to receive discounts for including the hospitals in their networks will ask for "even steeper discounts" if hospitals lower charges for self-pay patients. (November 7, 2004) Middle Class Make Up the Bulk of Florida's Uninsured Source(s): Stephanie Horvath, Palm Beach Post (Nov. 5). A new Florida survey finding that 19.2 percent of state residents are uninsured, up from 16.8 percent in 1999, "illustrates that jobs do not equal insured workers," reports the Palm Beach Post. While the state has led the nation in job creation over the last few years, its number of uninsured still increased this year to 3.2 million. In 1999, the last year the survey by the state's Agency for Health Care Administration was conducted, there were 2.7 million uninsured Floridians. Many more of the uninsured this time around are middle-income workers, with 30 percent of those making between $25,000 and $35,000 a year now lacking coverage, compared to 22.6 percent in 1999. The article reports that many of the state's new jobs come from small businesses, which tend to have the hardest time finding affordable coverage for their employees. More than half of the uninsured blamed their lack of coverage on high premiums, while only 10 percent said it was because their employers did not offer it. (November 5, 2004) Employer Insurance Mandate Narrowly Defeated in California Source(s): Jordan Rau and Evan Halper, The Los Angeles Times (Nov. 4); Barbara Feder Ostrov, San Jose Mercury News (Nov. 4); Victoria Colliver, San Francisco Chronicle (Nov. 4). The narrow defeat of a high-profile, "sweeping proposed health insurance mandate on employers" in California that was being closely watched around the nation led many experts to conclude that "piecemeal improvements may well be the only politically palatable way" to deal with the state's large number of uninsured and soaring health care costs, reports the Los Angeles Times. Supporters of the measure, Proposition 72, which would have required businesses with more than 50 employees to provide coverage for their workers or to pay into a state insurance fund, said it would cover 1.4 million uninsured residents, while opponents, including Republican Governor Arnold Schwarzenegger, claimed it would "crush California's economy." People on both sides of the ballot measure agreed that the defeat of Proposition 72 by a very slight margin of 49 percent to 51 percent "was hardly a mandate to do nothing," concludes the Times. According to E. Richard Brown, director of UCLA's Center for Health Policy Research, "It lost by a very tiny margin. That to me suggests that it remains an issue of really high concern to California voters." (November 4, 2004) What's in Store for Health Care in a Second Bush Administration Source(s): Steve Lohr and Milt Freudenheim, The New York Times (Nov. 4); Sue Kirchhoff and Julie Appleby, USA Today (Nov. 4); Joe Manning, Milwaukee Journal Sentinel (Nov. 4); Kristen Gerencher, San Francisco Chronicle (Nov. 8). Health care proved "one of voters' top domestic concerns," and was "the issue drawing perhaps the sharpest distinction between the candidates," reports the San Francisco Chronicle. With the election over, newspapers have started to look at what a second Bush administration means for the nation's struggling health care system, which has endured "four consecutive years of double-digit premium hikes [that have] raised workers' out-of-pocket costs, tethered salaries, dampened hiring and slowed the overall economic recovery," and has seen the number of uninsured rise from 40 million in 2000 to 45 million this year. According to Karen Pollitz of the Georgetown Health Policy Institute in Washington, Bush's plans "center around providing incentives for uninsured people to buy individual policies and creating purchasing pools for small businesses that are designed to level the playing field but also skirt state coverage mandates." Pollitz charges, "The gist of the president's proposals is largely about deregulating health insurance and allowing insurers ... to make health insurance cheaper by making it less protective." (November 4, 2004) Elderly need full dose of vaccine Source: Marilynn Marchione, Associated Press (Nov. 4). New research suggests that giving flu vaccine in a novel way can stretch doses and protect more people, but it didn't work as well in those over 60 and is too experimental to be used to ease this year's shortage, experts say. Scientists tested giving smaller doses of vaccine into the skin instead of full doses given as traditional shots into a muscle. Young people had comparable immune system responses but older people, who are most at risk of dying from flu, did not. Just measuring response alone doesn't prove effectiveness or justify changing recommendations for this flu season, said Dr. Myron Levin of the University of Colorado School of Medicine, who is chairman of the government's vaccine advisory panel. "What nobody knows is whether or not they're going to be just as protective," said Levin, who had no role in the two new pilot studies. Results were published online Wednesday and will appear in the New England Journal of Medicine's Nov. 25 edition. The second study was led by Dr. Richard Kenney of Iomai Corp., a Gaithersburg, Md., company that is developing skin vaccination technology. That experiment compared traditional flu shots to one-fifth doses given through the skin in 100 healthy 18- to 40-year-olds and found comparable or better responses from skin. It seems to generate not just antibodies to flu, as traditional flu shots do, but also a second response by specialized immune system cells - findings that "raise provocative issues" about whether the skin method ultimately may prove better for the elderly, who have a poor antibody response to flu shots now, they write. (November 4, 2004) Rising Senate Star Barak Obama Plans to Make Health Insurance a Priority Source(s): David Mendell, Chicago Tribune (Nov. 3) Newly elected Democratic Senator Barak Obama of Illinois, "the sole African-American in the world's most powerful legislative body," said that his first mission in the Senate would be to expand health insurance coverage, particularly among the poor, reports the Chicago Tribune. "If past is prologue, Obama ... will endeavor to craft legislation that advances not only his political career, but also his personal agenda to further social justice." As an Illinois state senator, he sponsored legislation to expand health insurance to the poor. "In choosing this cause" in the Senate, Obama "is taking on an issue that crosses his constituencies: blacks, whites, even the middle class." According to Obama, "It's an issue that cuts across demographic groups. So everybody is impacted by it." (November 3, 2004) President Bush Wins 2004 Presidential Election Source(s): Adam Nagourney, The New York Times (Nov. 3); David Wessel and Bob Davis, Wall Street Journal (Nov. 3); NBC's Today Show (Nov. 3); Kristen Gerencher, CBS MarketWatch (Nov. 3). "President Bush swept to a popular-vote victory over Senator John Kerry this morning," reports The New York Times. Under a second Bush administration, "The United States likely will continue on a path of encouraging individuals to purchase their own health insurance, and health savings accounts may emerge as employers' coverage of choice." According to Ron Pollack, executive director of Families USA, "Bush's record suggests he wouldn't make policy changes that result in health coverage for more Americans." Appearing on NBC's "Today" show the morning after the election, Senate Majority Leader Bill Frist acknowledged the problem of the number of uninsured and rising health costs facing the next administration and Congress. He promised that a second Bush term would lower those numbers by expanding health savings accounts and community health centers. He also said that the president would turn away from the big government programs that the Bush campaign accused Senator Kerry of promoting, and put health care decisions in the hands of consumers and their doctors. (November 3, 2004) Small Businesses Confront Continued Health Insurance Increases Source: Yuki Noguchi, The Washington Post (Nov. 1). With health insurance expected to cost at least 10 percent more in 2005, marking the fifth year of double-digit increases, "a diminishing number of small businesses can offer health coverage to employees," reports the Washington Post in an article profiling the struggles of small businesses to find and provide coverage for their employees. "Small businesses very much feel up against the wall now," according to Drew E. Altman, president and chief executive officer of the Kaiser Family Foundation. Small businesses are resorting to strategies such as shifting more costs to workers, cutting back on family and dependent coverage, lowering raises or cutting coverage all together, according to Altman. Some companies are looking at alternatives such as health savings accounts (HSAs), promoted by President Bush, which were enacted as part of the recent Medicare reform law. High-deductible, tax-preferred HSAs allow employers or their employees to make tax-exempt deposits into accounts dedicated to medical expenses. While the monthly payments for such plans are lower, small companies often don't have the staff to administer them. (November 1, 2004) As Florida Employers Cut Coverage, Government Ends Up with the Bill for Kids Source: John Dorschner, Miami Herald (Nov. 1). As health insurance costs have soared and coverage in South Florida has wobbled, the Greater Miami Chamber of Commerce has "urged companies to enroll low-wage workers in taxpayer-funded government programs never intended to serve those with access to private insurance." One in three children in Miami-Dade County are uninsured, which is more than twice the national average. But the shift from private to public coverage in Florida last year led to severe budget restraints for the state, and its Healthy Kids program was capped at 300,000 children. Another 90,000 children were "stranded on a waiting list." The Chamber halted its outreach program in June 2003 in response to the cap. Legislators charged that employers were trying to burden the state with increased costs. In particular, while "many small businesses are truly overwhelmed by rising healthcare costs," records show that the "profitable" Wal-Mart and Publix are the leading private employers of Healthy Kids parents. "Healthy Kids is intended for those who do not have access. It was not intended to replace employer coverage," contends program director Rose Naff. (November 1, 2004) Survey: More Americans Cite Health Care as the Nation's Most Critical Issue Source: Associated Press (Oct. 28). The Associated Press reports that an increasing number of Americans-22 percent-say health care is the most critical issue facing the nation today, beating terrorism, the economy, the war in Iraq, education, the budget deficit and taxes. While nearly 40 percent of those polled said that the health care system is good to excellent, the number rating it as poor has increased steadily over the past years, and now stands at 30 percent. The survey also found that many Americans are having trouble covering the costs of their health care. Almost two-thirds reported that their premiums had risen and more than 40 percent reported that their deductible increased over the past year. Struggling to pay these increased outlays led nearly half of those surveyed to cut contributions to savings accounts, and a quarter to cut contributions to retirement accounts. For families making $35,000 a year or less, the cost of health care was making it difficult to pay for other basics, such as food and heat. (October 28, 2004) Wal-Mart Gets Heat for Policies that Foist Employees' Health Coverage onto States Source(s): Tom Chorneau, Associated Press (Oct. 28); Reed Abelson, The New York Times (Nov. 1). Wal-Mart, the nation's largest private employer, is "under attack for what critics see as its miserly approach to employee health care," which forces many workers and their families into state insurance programs or charity care, reports The New York Times. The giant retailer "vigorously" defends its policies and maintains "it offers affordable coverage for all employees." However, statistics about Wal-Mart employees relying on state insurance programs for coverage cast doubt on that claim. For example, in Georgia, more than 10,000 children of Wal-Mart employees were covered under the state's program for children, costing taxpayers $10 million a year, while the bill to California state insurance programs for uninsured Wal-Mart employees is about $32 million a year. Retail competitors contend that Wal-Mart's practices force them to make difficult decisions about their own health insurance policies for their employees. Wal-Mart claims to directly cover about 45 percent of its workforce, and says it covers 58 percent of those who are eligible for coverage. Full-time Wal-Mart employees are eligible for coverage after six months, and part-time employees after at least two years. Employees pay 33 percent of the company's coverage costs, though Wal-Mart says it plans to reduce that to 30 percent. Employees report the cost, which even on the cheapest plans may range from $133 to $264 a month, is out of reach for many of the company's $8-an-hour workers, who earn about $1,200 a month for full-time work. A separate Associated Press article reports that Democratic California legislators will hold budget hearings into whether Wal-Mart's policies that leave the state spending $32 million a year to "subsidize" the company's employees "unfairly burden the state treasury." According to Democratic state Senator Wes Chesbro, chairman of the Senate budget committee, "If Wal-Mart is not providing for their workers it puts more pressure on the system. It puts pressure on other employers to drop their health care to be able to compete." Wal-Mart has been an "aggressive" opponent of Proposition 72, the California ballot initiative that would require large employers to pay at least 80 percent of their employees' health costs. (October 28, 2004) Hawaii's Employer Mandate Led to Low Uninsured Rate Source: Jordan Rau, The Los Angeles Times (Oct. 24). Hawaii is the only state in the nation with a mandate requiring employers to provide health insurance. In effect for 30 years, the mandate requires all Hawaiian businesses to provide coverage for any employee who works at least 20 hours for four consecutive weeks. As such, the state has one of the nation's lowest uninsured rates, with only 10 percent of residents lacking coverage. However, rising premiums mean that "not all is perfect in the tropics" and "there are growing calls to relieve the burden on businesses." Some find ways to get around the mandate, by paying cash for work or hiring workers for less than 20 hours a week. Still, the business community "is not pushing for the law's abolition" and the state's 1.2 million residents "love the law." Hawaii's experience is being carefully observed by California, where next week Proposition 72 will ask voters to decide whether to impose a similar mandate on businesses with more than 50 employees. Supporters of Proposition 72 say Hawaii's experience "shows that businesses can adapt to mandated coverage without the dramatic rash of bankruptcies business groups are predicting." (October 24, 2004) Regardless of Election Outcome, Kerry's Idea of Reinsuring Costly Care Is Gaining Momentum Source: Milt Freudenheim and Robert Pear, The New York Times (Oct. 23). On the campaign trail, John Kerry has been promoting the idea of government reinsurance of very costly medical care, but regardless of who wins the presidential election, Congress is expected to "take up the idea of fighting high health insurance costs by shielding employers from the most expensive medical cases," reports The New York Times. Reinsurance of high-cost medical premiums paid by employers and their employees-which will top $520 billion this year-is akin to other federal reinsurance programs for natural disasters like floods. Kate Sullivan Hare, director of health care policy at the U.S. Chamber of Commerce, said, "If the government helps pay for the costliest cases, that would help keep coverage available and affordable to small businesses and individuals." (October 23, 2004) Report Finds Large Increase in Number of Uninsured Veterans Source: Associated Press (Oct. 19). Veterans are losing health insurance at a faster rate than the general population, reports the Associated Press. The number of uninsured veterans has increased by 235,000 since 2004, with nearly 1.7 million military veterans now lacking health insurance or access to government health facilities for veterans, according to a report by Physicians for a National Health Program. Like the uninsured in general, most uninsured veterans have jobs, with 85 percent of them being employed within the past year. A White House spokesperson said the Bush administration has increased spending on medical care for veterans by 40 percent, and opened 194 community health centers for them. "The president wants to make sure they get the care that they need and they deserve," said Trent Duffy. But the report, by a group that supports universal health coverage, found that veterans, many reporting serious health problems, were on waiting lists for appointments, could not afford co-payments, or do not live near a veteran's hospital or clinic. (October 19, 2004) States Cut Health Care to Illegal Immigrants, Including Pregnant Women Source: Miriam Jordan, Wall Street Journal (Oct. 18). Fiscally strapped states have cut health care and other benefits for illegal immigrants, including a loudly criticized move in Colorado to cut off prenatal care for thousands of illegal immigrants whose babies will be born U.S. citizens, reports the Wall Street Journal. Continued growth in immigrant populations, which has doubled and tripled in many states since 1990, has strained state resources and "turned the newcomers' access to health and other services into a hot-button issue." States determine eligibility for the federal-state funded Medicaid, which covers low-income patients and is the second-largest item in most state budgets. Illegal immigrants aren't eligible for Medicaid, except in emergencies, but many states have a "presumptive eligibility" program that enables any pregnant woman to receive prenatal care while the state determines whether she qualifies for Medicaid. Colorado claims that presumptive eligibility was being abused, and that the state is holding to the federal government's rules by not covering pregnant illegal immigrants. "The federal government has made clear that it doesn't want people coming to this country to receive public benefits," said Karen Reinertson, executive director of the Department of Health Care Policy and Financing, the Colorado Medicaid agency. But Georges Benjamin, executive director of the American Public Health Association and former health commissioner of Washington, D.C., says, "It's a penny-wise, dollar-foolish policy. A small number of babies born with complications will wipe out any savings." (October 18, 2004) Stymied at the Federal Level, States and Private Groups Try to Tackle the Uninsured Problem Source: Judith VandeWater, The St. Louis Post-Dispatch (Oct. 17) In the face of ongoing federal inaction in dealing with the "tangled" problems of the nation's costly health care system, states and private coalitions "fed up with waiting on Washington ... are chipping away at the issues" with several initiatives. These efforts include 50 Fortune 500 companies sponsoring an effort to make coverage available to 4 million part-time workers and others without insurance; a call for universal coverage by the National Coalition on Health Care, which represents 150 million Americans in groups ranging from big businesses to unions to faith organizations; and a move by Democratic Illinois Governor Rod Blagojevich to allow residents to buy cheaper drugs abroad. No national policy proposal to expand coverage of the uninsured has the support of a majority of voters, according to health policy expert Robert Blendon of Harvard. This lack of consensus "allows Congress to dodge a productive debate on comprehensive reform," he said. However, there are some things the public does agree on, according to the article. Americans "want the uninsured to have access to coverage and care," but without jeopardizing their own employment-based coverage. Most Americans from both parties approve of the current "blend" of the way health care is financed, with contributions from employers, individuals and the government. Voters are especially supportive of small businesses, and "will not support health policies that could harm" them. (October 17, 2004) Fate of California Mandate Requiring Employers to Provide Coverage Has National Implications Source(s): Jordan Rau, The Los Angeles Times (Oct. 16); The Los Angeles Times (Oct. 17). The outcome of a referendum on a 2003 California law that requires businesses with 50 or more employees to provide workers with health insurance "will have national reverberations, providing a clue to the American appetite for ambitious rejiggering of a healthcare system widely acknowledged to be a mess," according to analysts, reports the Los Angeles Times. The law, which would provide health coverage to 1.4 million of the state's 5.3 million uninsured, is "embroiled in a fight for its life." In an attempt to repeal the law, the California Chamber of Commerce and the state's restaurant and retail industries put the referendum, known as Proposition 72, on the November ballot. Businesses claim the law will "bankrupt them or make them flee" the state, while supporters say it will ease pressures on emergency rooms and California's public programs for the poor caused by the number of uninsured. Independent analysts "question some of the dire assertions by business groups." According to Richard Kronick of UC San Diego, "The net effect [of the law] is likely to be extremely small, so small as to be barely measurable by the labor economists. What will certainly be measurable is a million more people with health insurance." (October 16, 2004) Only a Small Fraction of Displaced Workers Claim Health Care Tax Credit Source: Albert B. Crenshaw, The Washington Post (Oct. 16). Both Bush and Kerry are promoting tax credits in their health plans as a way to slow rising health care costs. But the "track record" of an existing health care tax credit enacted in 2002 to help displaced manufacturing workers is not encouraging, reports the Washington Post. The tax credit for workers who lost their jobs to foreign competition covers 65 percent of their health insurance premiums, and has been aggressively publicized by the Bush administration and state officials. However, only a "small fraction" of those eligible have used the credit. About 12,500 taxpayers claimed the credit on their 2003 income tax returns, according to the IRS, with an additional 6,000 taking it as an advance payment. It is unclear how many will claim the credit when they file this year's taxes, but the General Accounting Office reports that the number "remains a small portion" of those eligible. Critics of the program say the low response is because the credit "is too complex and places too much burden on the intended beneficiaries." (October 16, 2004) GM Cuts Profit Forecast Due to Rising Health Care Costs Source: Lee Hawkins Jr., Wall Street Journal (Oct. 15). In a move that "jolted" Wall Street, General Motors "slashed" its profit forecast for the year, saying that rising U.S. health care costs "are overwhelming efforts to boost profits in its core market," reports the Wall Street Journal. GM CEO Rick Wagoner "signaled out rising U.S. health-care costs as a major factor" in the earnings shortfall. GM had been able to keep annual health care cost increases below the national average but this year its increases "crept" from 8.5 percent into the double digits, according to the company. "These continuing large increases in health-care costs put GM, and many other U.S. businesses, at a significant disadvantage," said Wagoner. (October 15, 2004) Health Care Has Prominent Role in Presidential Candidates' Final Debate Source(s): Adam Nagourney and Robin Toner, The New York Times (Oct. 14); Jacob M. Schlesinger, Greg Hitt and John Harwood, Wall Street Journal (Oct. 14); Dan Balz and Jim VandeHei, The Washington Post (Oct. 14); Mark Z. Barabak and Michael Finnegan, The Los Angeles Times (Oct. 14); USA Today (Oct. 14); John A. MacDonald, Hartford Courant (Oct. 15). In their "fiercely competitive" final presidential debate on October 13, Bush and Kerry "battled ... over the state of American health care," which "ranks near the top of voters' concerns," and "displayed a stark contrast in their views," reports The New York Times. According to the Wall Street Journal, "Some of the sharpest exchanges" in the debate were over health care. Kerry "charged that the president has compiled a record of failure on the economy and health care," and said that Bush "has stood by as millions of Americans have lost their health insurance," reports the Washington Post. He defended his "more ambitious plan" to cover the uninsured and to lower insurance costs, reports the Journal, while Bush "focused more on possible damage wrought by new programs than current pain." The Los Angeles Times reports that Bush "again criticized Kerry's healthcare plan as a government takeover that would reduce the quality of care and balloon costs to the federal government," saying, "I think government-run health will lead to poor-quality health, will lead to rationing, will lead to less choice." He warned that Kerry's health care plan was an "empty promise" that would cost $5 trillion over 10 years - "nearly eight times" Kerry's estimate for his plan's cost, reports The New York Times, which notes that Bush's "government-run" accusation is "disputed by health care experts." Kerry "brushed aside Bush's criticism," and said, "Let me just say to America: I am not proposing a government-run program." He said his plan is "a realistic effort to build on the existing system." Bush also accused Kerry of a Senate record "that is both out of the mainstream and lacking in accomplishment," saying he has not done "anything significant to reform health care," according to the Post. A Gallup/CNN poll released the day after the debate found that registered voters think Kerry would do a better job on health care issues, reports the Hartford Courant. But analysts express caution about both plans. Kerry's plan to pay for his proposal by rolling back tax cuts on the wealthiest "would likely generate stiff opposition in Congress," according to political analyst Bruce F. Freed. And while many business groups endorse Bush's plan, Dallas L. Salisbury, president of the Employee Benefit Research Institute, said it would be difficult for Congress to find the money for tax breaks to help workers buy private health insurance, as Bush wants. Regardless of who wins the election, "changes in national health care policy are likely to be more evolutionary than revolutionary," says Paul W. Dennett of the American Benefits Council. (October 14, 2004) Workers Marching on Washington Demand Universal Health Care Source(s): Manny Fernandez, The Washington Post (Oct. 14); Manny Fernandez and David Nakamura, The Washington Post (Oct. 18). Universal coverage was among the demands of the thousands of union members participating in a march on Washington over the weekend, reports the Washington Post. Though the estimated 10,000 marchers fell short of the 100,000 that organizers had expected, the crowd, including "postal workers and longshoremen, school bus drivers and teachers, department store staff and railway repair crews" from around the country, made a "passionate plea for workers' rights." Among other demands, they called for "cradle to grave" health coverage for all Americans. (October 14, 2004) Tax-Preferred Health Savings Accounts Off to a Slow Start Source: Milt Freudenheim, The New York Times (Oct. 13). Employers and workers have been slow to accept health savings accounts (HSAs), one of President Bush's "central campaign remedies for the nation's health care problems," as an alternative to "conventional" health insurance, reports The New York Times. The plans are "meant to help reduce wasteful spending by involving consumers more directly in weighing the costs of alternative types of care." But in the current annual health care plan enrollment season, only "a tiny fraction" of people are opting for these high-deductible, tax-free savings accounts. For example, UnitedHealth Group, the nation's largest insurer, expects only about 150,000 of the 18 million workers it serves to choose HSAs in 2005. Nonpartisan experts say the plans "are apparently too new and untested" to draw many employers, and the high deductible "may simply not be financially feasible for middle-income families." (October 13, 2004) Most of New Jobs Are Part-Time and Offer No Benefits Source: David Koeppel, The New York Times (Oct. 10). The high cost of health benefits is a major reason why more than 1 million of the 1.2 million jobs added this year are part time, reports The New York Times. Part-time jobs, which usually come without benefits, now account for 18 percent of the overall job market, the highest level since 1997, according to the Labor Department. A study to be released in December by the Employee Benefit Research Institute found that only 19 percent, or 4.8 million, of the nation's 25 million part-time workers had employee health benefits ion 2003. According to the Brookings Institution, "Job growth for the past three years has been almost entirely driven by part-time workers. There's more pressure on companies to keep costs down." (October 10, 2004) Rising Health Care Costs Dominate Labor Negotiations Source(s): Russ Mitchell, The New York Times (Oct. 10). After a four-and-one-half month strike in Southern California that ended less than a year ago, the supermarket industry is bracing for "a new showdown" in Northern California between labor unions trying to hang on to health insurance benefits and management facing increased competition from low-cost rivals like Wal-Mart, reports The New York Times. Unionized supermarket chains have been paying 100 percent of their workers' health care premiums, but this has "become a runaway cost, not just for us, but for industry in general," said Steven A. Burd, chairman and CEO of Safeway. The issue "is not unique to the supermarket industry," as the cost of health care is also driving negotiations in other industries, such as auto manufacturing and hotel service. "Employers can't take on 12 to 14 percent annual increases in health care," said Tom Beauregard, a health care consultant at Hewitt Associates, which predicts continued double-digit increases. Employers are forced to shift some of these costs to workers. Hewitt reports that workers' average annual contribution for family coverage will rise from $1,276 to $1,565 this year. (October 10, 2004) Candidates' Health Care Plans Continue to Receive Scrutiny Source(s): The Economist (Oct. 9); The NewsHour with Jim Lehrer (Oct. 15); William M. Welch, USA Today (Oct. 19). Rising health care costs and the increasing numbers of Americans without insurance are driving concerns about health care in the presidential campaign, according to USA Today. Either of the very different health care plans proposed by President Bush and rival Senator John Kerry "could dramatically change how millions of Americans get health insurance - or whether they have coverage at all." Kerry contends that Bush's plan to give Americans more control over their health coverage with health savings accounts benefits drug companies and health insurers more than working Americans. Bush says Kerry's proposal to cover 27 million of the 45 million uninsured Americans with a combination of tax credits, Medicaid expansion and federal reimbursement of the costliest cases will lead to a "government takeover" of health care. The divergent plans reflect an "even deeper disagreement about the future course" of American health care that experts say is a fundamental split. Though Bush charges Kerry with being a "liberal," Kerry's plan is the more conservative one, according to the article, as it builds on the current system of employer-provided health care and publicly funded Medicare and Medicaid. Because it does not include employer mandates, many analysts dispute Bush's charge that Kerry's plan is "creeping toward Hillary-care." Bush's plan to rely on market forces to limit health care cost increases is a major philosophical shift in the way the nation provides health coverage. "The president really is proposing at least the beginnings of a very different approach that focuses on the individual and moves away from employer-based and government programs," says Drew Altman, president and CEO of the Kaiser Family Foundation. Bush's plan, which is estimated to cost $145 billion over the decade, is less expensive than Kerry's plan, which is estimated to cost at least $650 billion over 10 years, but would only extend coverage to between 7 million and 11 million people. Both plans would require congressional approval, which is "no easy task," according to the article. (October 9, 2004) Nonprofits Struggle to Maintain Services Despite Rising Health Care Costs Source: Rachel Emma Silverman, Wall Street Journal (Oct. 6). A new study from the Johns Hopkins Nonprofit Listening Post Project finds that rising health insurance costs are hurting nonprofit groups, with nearly two-thirds of charities surveyed reporting that employee health benefit costs rose at least 11 percent in the past year, reports the Wall Street Journal. In the face of rising costs, charities must "struggle" to maintain employee benefits without cutting their programs. Less than 10 percent of nonprofits reduced their activities as a result of higher health care costs, but many shifted more costs onto employees, the survey found. In response to rising health insurance costs, more than 60 percent of nonprofits increased their workers' share of health costs, a third reduced raises or bonuses, and 22 percent cut staff or imposed a hiring freeze. (October 6, 2004) Predicted Increases in Health Care Costs Linked to Treating the Uninsured Source(s): Vanessa Fuhrmans, Wall Street Journal (Oct. 6); Associated Press (Oct. 6); Diane Levick, Hartford Courant (Oct. 12). Double-digit increases in the health care costs for large companies will persist next year, reports the Hartford Courant. According to benefits consulting firm Hewitt Associates, workers will pay about 15 percent more for their health plans next year, as overall health plan costs are projected to increase by 11.3 percent in 2005. Though the 11.3 percent increase is less than the 12.3 percent increase in 2004, some employers are nonetheless increasing the share that their employees must pay. The slow down in the increase is attributed to cost-savings initiatives by employers that stress prevention and wellness, as well as more cost sharing. The average employee share of premiums will be $1,481 in 2005, which is 19.6 percent of the average overall cost of coverage of $7,542. "Rapidly increasing health care costs continue to be a major burden for employers and employees," said Jack Bruner of Hewitt. The cost of treating the growing number of the uninsured contributes to the rate increase, according to Hewitt. (October 6, 2004) States Lose $1.1 Billion in SCHIP Matching Funds Source(s): Paola Singer, Newsday (Sept. 30); Julie Rovner, CongressDaily (Sept. 30). For the first time since the creation of the jointly funded state-federal State Children's Health Insurance Program (SCHIP) in 1997, states lost $1.1 billion in unspent federal funds on September 30. The funding loss means that about 200,000 children around the country could lose their coverage by 2007. A study by the health advocacy group Families USA concluded that the $1.1 billion could pay the one-year premiums for 750,000 children. Congressional Democrats and Republicans, as well as the Bush administration, want to keep the money in the program, but disagree on how to distribute the funds. Democrats want to spend more on coverage, while the Bush administration wants to use the money to find and enroll eligible children who are not yet signed up. "It makes little sense to have more outreach when a number of states have insufficient funding for their existing caseload," said Edwin Park, a senior health policy analyst for the Center on Budget and Policy Priorities. Bipartisan lawmakers proposed a bill to extend funding to needy states, but Republican Senate Majority Leader Bill Frist (Tenn.) responded that the program has sufficient funding, and that Health and Human Services Secretary Tommy Thompson intends to redistribute $660 million by the end of the year, "nearly twice that which is needed to eliminate shortfalls." (September 30, 2004) Businesses Begin to Embrace "Pay or Play" Plans Source(s): Alexandra Marks, Christian Science Monitor (Sept. 29). Pay or play, a "controversial proposal" that requires businesses to provide health insurance to their workers or pay into a government fund that will cover them, is gaining popularity, reports the Christian Science Monitor. Traditional employers who once saw it as "an ideologically offensive unfunded mandate" are now, in the face of soaring health premium costs, seeing it as "the foundation for reform of the healthcare system." California residents will vote on a referendum next month on whether to rescind a law signed by former Democratic Governor Gray Davis that would require all but the smallest businesses to provide their employees with coverage, or pay into a state fund. The California plan, which would subsidize the premium costs of low-income employees as well, is opposed by some large businesses, and Republican Governor Arnold Schwarzenegger recommends voting against it. (September 29, 2004) Unlike Most States, Virginia Dramatically Increases SCHIP Enrollment Source(s): Chris L. Jenkins, The Washington Post (Sept. 29). In what Democratic Virginia Governor Mark Warner cites as one of the biggest achievements of his administration, the number of children enrolled in the state's health insurance program for children has risen dramatically since 2002, when the Kaiser Family Foundation cited the rate at which Virginia was enrolling children as one of the lowest in the nation. There are now 385,000 children covered by the program, called Family Access to Medical Insurance Security (FAMIS), an increase of 102,000 in the past two years. "Clearly Virginia went from being a state that wasn't even on the map to being one of the nation's leaders," said Diane Rowland of the Kaiser Foundation. Virginia expanded its program while many states were forced to cut back due to budget constraints. (September 29, 2004) Compilation of Data Paints Gloomy Health Care Portrait Source: Ceci Connolly, The Washington Post (Sept. 28); William M. Welch, USA Today (Sept. 28); Associated Press (Sept. 28) . A front-page article in the Washington Post reports a consistent spate of statistics detailing how Americans over the past four years "have spent an ever-growing portion" of their pay on health care, yet millions have joined the ranks of the uninsured or have been forced into personal bankruptcy in a "financial crunch in the medical sector not seen since 1992."
(September 28, 2004) Health Insurance Costs Rise Faster Than Wages Source: Maggie Fox, Reuters (Sept. 28). Health insurance premiums for workers are rising around three times faster than their wages, and health costs eat up a quarter of earnings for more than 14 million Americans, according to a survey by nonprofit Families USA. While benefits are being cut, health insurance premiums are rising, the report from the nonprofit Families USA found. "Workers are paying much more in premiums but are receiving less health coverage, wages are being depressed; and millions of people have lost health coverage entirely," said Families USA executive director Ron Pollack. The cost of health insurance premiums rose by nearly 36 percent on average from 2000 to 2004 in 35 states, said the group. Average earnings rose just 12 percent over the same time. (September 28, 2004) Hospitals Battle Lawsuits Over Billing of the Uninsured Source: Daren Fonda, Time (Sept. 27). An article in Time magazine examines the class-action lawsuits being filed "almost weekly" against nonprofit hospitals, including "some of the largest and most prestigious health-care providers" around the nation. The suits take on "widespread industry practices," including "charging the uninsured grossly inflated prices." The American Hospital Association (AHA) claims the cases are "without merit," noting that hospitals spent $22.3 billion on uncompensated care last year. The article notes that "many hospitals are revising their charity policies" with AHA urging. Some health care experts say the lawsuits are "misguided," and that "to folks who do physically and emotionally draining health-care work, the notion of hospitals hoarding their wealth and targeting the poor is insulting." The AHA says the lawyers "are diverting focus from the real crisis: a record 45 million Americans without insurance, ERs clogged with indigent patients and costs rising faster than Medicaid and Medicare reimbursements." (September 27, 2004) States Likely to Lose $1.1 Billion in SCHIP Funds Source: William M. Welch, USA Today (Sept. 24); Ceci Connolly, The Washington Post (Sept. 25). States risk losing more than $1 billion this week in unspent State Children's Health Insurance Program (SCHIP) funds slated to provide insurance for low-income children unless Congress and President Bush allow them to carry over unspent federal dollars to next year reports USA Today. Bush's pledge during the GOP convention last month of a $1 billion initiative to enroll "millions of poor children" in government health programs will amount to "a financial wash at best" if the funds are returned, according to the Washington Post. SCHIP is a federal-state partnership created in 1997 to give states matching funds to insure low-income children. SCHIP enrollment has grown from fewer than 1 million in 1998 to 5.8 million today. However, 8.4 million children remain uninsured, according to the article. The National Governors Association and a bipartisan coalition of lawmakers have asked that states be given more time to spend the money, as was done in the past. Only seven states have spent their full 2004 allotment. Program supporters claim "it was understood money would have to be carried over because enrollment would be lower at the start [of the SCHIP program] than in later years." However, White House spokesperson Trent Duffy said, "Obviously if there's money left over and children don't have health care, something's not working. After five years of trying one way, it's time to try new ways," reports USA Today. Instead of allowing states to keep the money, the White House wants to spend it on a "public outreach campaign" to enroll children in SCHIP. Kevin Keane, a spokesperson for the Department of Health and Human Services, said the president's "Cover the Kids" campaign will distribute $1 billion in grants to states, community groups and religious organizations over two years. "The president believes we need to try a new, community-based approach to enrolling children in SCHIP," he said. (September 25, 2004) Health Insurance Often Falls Short, New Study Says Source: Theresa Agovino, Associated Press (Sept. 24). Privately insured, low-income workers with chronic medical conditions such as diabetes and asthma are being financially squeezed as employers shift the burden of higher health care costs to employees, a new study found. The number of such individuals spending more than 5 percent of their income on out-of-pocket medical costs soared 48 percent to 2.2 million people from 2001 to 2003, according to a study released Thursday by the Center for Health System Change. The study also found that one-in-three privately insured, chronically ill, low-income individuals are from families that struggle to pay medical bills. In such families, 10 percent of patients opted not to receive care, 30 percent delayed care and 43 percent didn't fill a prescription because of the expense. The study illustrates that it isn't just the uninsured who are struggling with medical expenses, said Paul Ginsburg, president of the center, a nonpartisan policy research organization. Ginsburg said it is "penny wise and pound foolish" to continue cost shifting to people with serious medical problems because if they forgo preventive care they wind up requiring costlier treatments later on. (September 24, 2004) Hospital Billing of the Uninsured Is A Complex Picture Source: Lucette Lagnado, Wall Street Journal (Sept. 21). An analysis in the Wall Street Journal of "the high markups hospitals tag onto care for uninsured patients" illustrates "just how difficult it can be to evaluate what medical procedures really cost -- not to mention the difficulties a person in medical distress would experience in trying to shop for health care" using health savings accounts (HSAs). The article profiles the hospital billing experiences of an uninsured 43-year-old Virginia man, who went by ambulance to a community hospital emergency room after experiencing severe chest pains one night. Paul Shipman, who despite earning $80,000 a year had "gambled" that he could do without health insurance. Because he was worried about the bill, Shipman checked himself out of the hospital against medical advice the next morning. The ensuing debt "triggered a gradual unraveling" of Shipman and his wife's middle-class life. He was charged $29,500 for the hospital stay, $1,000 for the ambulance ride, $6,800 for the cardiologist and several thousand dollars for the emergency room stay. Shipman is now part of a class-action lawsuit that is challenging the status of tax-exempt hospitals because of their billing practices of the uninsured. For example, Virginia Medicaid would have paid his $29,500 hospital bill at only $6,000 according to the article, while Medicare estimated it would have paid $15,000. The hospital notes that it treats all patients, regardless of ability to pay, and that it offered the Shipmans a 20 percent discount along with financial aid. It maintains that if it only charged costs, the hospital could not survive and still pay for indigent patients and those on Medicaid. In light of the recent spate of lawsuits, many hospitals "have rushed to implement discount programs" for uninsured low-income patients. (September 21, 2004) Uninsured Prowl Net for Health Coverage Source: Jonathan Maze, Post and Courier (Sept. 19). Several online brokers, including ehealthinsurance.com, insure.com, quickquote.com and assurant.com, seek to make it easier for people to find affordable individual health coverage and compare different plans. "Many people need and want health insurance," said Bob Hurley, vice president of customer care for California-based ehealthinsurance.com. "They feel exposed not having it. (But) they don't know where to get it." Hurley said most of his site's users are uninsured, though many others are small-business owners looking for affordable coverage. Experts caution that health plans can be complicated. They say that while going online may provide consumers with a wealth of choices, these sites may not be the best at helping consumers understand which plan is the best to buy. Yet with many Americans already relying on the Internet for general health information, New York-based research firm Manhattan Research LLC said it's only natural that many would use the Internet to find coverage. Experts say that individuals can lower their costs dramatically by buying plans with higher deductibles or higher co-payments. Those are the sort of policies most often sold through the Web. "Don't be afraid of high deductibles," Hurley said. "Buy a health plan that has a $1,000 deductible. Many of those plans, once you hit the deductible, are very comprehensive." Stephenson agreed. "I personally think individual insurance is accessible and affordable," he said. "It may not pay for everything, but it does provide coverage." (September 19, 2004) Government Offers Health Savings Accounts to 3 Million Federal Workers Source: Milt Freudenheim, The New York Times (Sept. 16). As allowed by the recently enacted Medicare reform act, the government is offering tax-preferred, high-deductible, health savings accounts (HSAs) to more than 3 million federal employees and their families "in the biggest test yet of an idea central to the Bush administration's health care policy," reports The New York Times. The tax-preferred plans, "a centerpiece" of the Bush campaign, are meant to empower consumers by letting them "decide for themselves whether to pay for high-priced drugs or treatments." HSAs provide those "with few immediate medical problems ... a tax-sheltered way to save against future needs." But those with more serious problems may end up with greater outlays than they have in their accounts, the article notes. Government employees unions, some health policy experts and Democrats criticized the plans, claiming they will attract healthier workers, which could lead to higher costs for those left in traditional plans. (September 16, 2004) Survey Finds Most Americans Favor Universal Coverage Source: Randi F. Marshall, Newsday (Sept. 16). Two-thirds of those surveyed by the Civil Society Institute, an independent Massachusetts think tank, favor a health care "guarantee" akin to the Canadian or British systems, reports Newsday. Though most (85 percent) of the 1,020 adults surveyed have health insurance, nearly all reported that it has either been cut or their costs have risen. "What this survey shows is a nation in the grips of a health care crisis," said Pam Solo, president of the institute. "Americans are now prepared to embrace some tough ideas." The survey's findings "have been echoed by other experts and research groups." (September 16, 2004) Small Businesses Bear the Brunt of Rising Health Care Costs Source(s): Alexandra Marks, Christian Science Monitor (Sept. 15); Joseph Weber, William C. Symonds, Louise Lee and Stephanie Anderson Forest, Business Week (Sept. 27) Small businesses with 200 employees or fewer are "getting hit the hardest" by health care cost increases that have "jumped an astounding 59 percent since 2001 - five times the rate of inflation and five times the growth in wages," reports the Christian Science Monitor. The cost of health insurance has become a "critical problem" for two-thirds of America"s small businesses, which pay the highest premiums and face the largest annual increases, according to a survey by the National Federation of Independent Business(NFIB). In 2001, only 47 percent of small-business owners deemed health care costs a major problem. This trend "is stoking a decade-long debate" over whether the federal government should play a greater role in helping small businesses with their health costs, or whether small businesses should be allowed to band together into larger groups called association health plans (AHPs), so as to better negotiate premium costs. Many small-business owners, as well as President Bush and the NFIB, favor AHPs. Experts agree that they will bring down premium costs in the short term. However, critics contend that such plans "would try to keep costs low by weeding out companies with more ill workers than average," and that AHPs freed from state mandates will offer fewer benefits. Furthermore, AHPs do not address the "underlying" problem of soaring costs that even huge employers like General Motors face. (September 15, 2004) Health Savings Accounts Growing in Popularity Source: Louise Story, Wall Street Journal (Sept. 9). Health savings accounts (HSAs), which are "touted" by President George Bush as a means for small businesses to offer their employees affordable health benefits, are "starting to take off," reports the Wall Street Journal. The number is "expected to grow sharply in coming months as more insurance companies and financial-services firms start to offer the new option to individuals and employers." HSAs, which were created in the recent Medicare "overhaul," are like IRAs for health insurance that combine a "tax-free account to pay for medical expenses with a high-deductible health plan with low premiums." According to the article, about 50 insurers have introduced HSAs. Critics worry, however, that HSAs may "encourage people to skimp on needed medical benefits in order to build up their savings." (September 9, 2004) Health Care Costs Are Americans' Biggest Health Concern, Polls Find Source(s): Juan A. Lozano, Associated Press (Sept. 9); Christopher Snowbeck, The Pittsburgh Post-Gazette (Sept. 9); Debora Vrana, The Los Angeles Times (Sept. 10). Health care costs are the leading health concern of Americans, according to a nationwide poll, reports the Associated Press. Fifty-six percent of those surveyed by Zogby International said they were personally affected by cost. The high cost of health care "trump[s] issues such as obesity, aging and access to medical care," reports the Los Angeles Times. Though Pennsylvania fares better than the national average on the percentage of uninsured, more than half of those polled said their families had difficulty paying for health care or obtaining coverage over the past year. The issue is reaching into the middle class, according to the poll, with 52 percent of those with incomes between $50,000 and $74,999 claiming problems with health care costs or access, according to the Gazette. Poll respondents blamed malpractice lawsuits as the main reason for rising costs. But health economist Uwe Reinhardt of Princeton University said that no more than 1.5 percent of health care spending goes toward malpractice premiums, according to the article. Pennsylvanians said they wanted a bigger government role in health care, with 71 percent saying the government should "expand its role" to do more to reduce the number of uninsured. Close to half of those polled said they would be willing to pay higher taxes to enable more people to have coverage and access to affordable care. (September 9, 2004) Health Care Costs for Employers Continue to Soar for Fourth Year Source(s): Associated Press (Sept. 9); Albert B. Crenshaw, The Washington Post (Sept. 9); Vanessa Fuhrmans, Wall Street Journal (Sept. 10); Milt Freudenheim, The New York Times (Sept. 10); Debora Vrana, The Los Angeles Times (Sept. 10); John A. MacDonald, Hartford Courant (Sept. 10); Julie Appleby, USA Today (Sept. 10). Family premiums in employer-sponsored plans jumped 11.2 percent this year, according to a national survey, making it the fourth year of double-digit growth in health care costs, reports the Associated Press. This "unceasing rise" in health care costs will "depress wages, affect hiring decisions and encourage outsourcing," as well as increase the number of uninsured people, according to Drew E. Altman, president of the Kaiser Family Foundation, which released the annual survey along with the Health Research and Educational Trust, reports the Washington Post. Due to the rise in costs, "employers have ended coverage for 5 million workers, with most of the decline coming among hard-pressed small firms," reports the Hartford Courant. It troubles employers and health care policy experts "that steep premium increases persist," even after years of cost-shifting measures, reports the Wall Street Journal. "The cost of family health insurance is rapidly approaching the gross earnings of a full-time minimum-wage worker," according to Altman. The average premium for a family of four increased to $9,950 a year. Small businesses are especially hard hit. "Perhaps the only good news" in the report was that the rate of increase slowed slightly this year, from the record of 13.9 percent in 2003, according to The New York Times. But the increase was still more than five times the 2.2 percent increase in wages from the spring of 2003 to the spring of 2004. Analysts say that employers "have few tools" to lower premiums "anyplace close" to the inflation rate, which is 2.2 percent this year, reports the Courant. "This is really a point where you just don't know what to do anymore," said Hare. "There just aren't that many options left for small businesses." And the survey found that workers' health insurance costs will continue to rise. More than half of the 3,000 companies surveyed that employ more than 200 workers said they were "very likely" to increase the amount of employee contributions over the next year, according to the Los Angeles Times. (September 9, 2004) Employers Anticipate Further Health Care Cost Increases in 2005 Source(s): Milt Freudenheim, The New York Times (Aug. 27); Vanessa Fuhrmans, Wall Street Journal (Aug. 27). Employers expect "steep increases in health costs" of 13 percent in 2005, according to a new survey by Mercer Human Resources Consulting reported in The New York Times. But many think that by shifting "even more" health care expenses onto employees, they can slow the rate of increase to just under 10 percent, reports the Wall Street Journal. "The difference between employers' cost projections before and after making changes to their benefit programs suggests we're going to see some considerable cost shifting to employees next year, especially among smaller employers," according to Mercer's Blaine Bos. Experts "worry that the steady paring of benefits and the rising share of costs being shifted to employees ... is contributing to the growing number of uninsured people," reports the Journal. (August 27, 2004) Small Businesses Struggle to Pay for Health Coverage Source(s): Eve Tahmincioglu, The New York Times (Aug. 26). Even in the face of soaring health care costs, small businesses are reluctant to cut back on benefits or ask employees to pay more, reports The New York Times. Small-business owners have been devising "innovative strategies" to cope with double-digit increases in health insurance premiums since 2001, but "this is the year that many of them are finally crying uncle" and giving up, reports the Times. A study by the National Federation of Independent Business found that 65.6 percent of small-business owners considered health insurance costs a "critical" issue, "a level of anxiety that the federation says it has not seen in the 22 years that it has been conducting surveys." Noting that the pain is "widespread, and deep," the article profiles small-business owners who have doubled deductibles and raised copays, or dropped coverage altogether. The share of small businesses with fewer than 200 employees that offer insurance declined to 65 percent last year from 68 percent in 2001, and "experts fear that number will keep falling if things do not change." (August 26, 2004)
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Palmetto Project |
S.C. Budget & Control Board |
© Copyright 2004-07
This web site is intended solely for the purpose of electronically providing South Carolinians with general health and insurance-related information, and convenient access to resources. This website does not provide health insurance advice, referrals, or counseling.
