KFF designs, conducts and analyzes original public opinion and survey research on Americans’ attitudes, knowledge, and experiences with the health care system to help amplify the public’s voice in major national debates.
This report shows that number of uninsured Americans under age 65 increased by 5.1 million between 2000-2003 largely driven by continuing declines in employer sponsored insurance. For children, this decline was more than offset by increases in enrollment in Medicaid and the State Children’s Health Insurance Program (SCHIP), resulting in a decrease in the number of children without coverage. The same growth in public coverage did not occur for adults, and as a result all of the increase in the number of uninsured was among adults.
Health care is a major issue for women. Their greater health needs, longer lifespans, lower incomes, roles in their family’s health as mothers and caregivers, and reproductive health needs make their relationship with the health care system complex. Historically, reproductive health issues have dominated election campaigns’ attention to women’s health policy, with abortion taking center stage. However, women’s health policy intersects with a far wider span of health policies, including private sector cost containment, expansions and reforms of public programs, family-friendly workplace policies, long-term care financing, access to safe and comprehensive reproductive health care services, and medical research priorities.
Background
Women interact in the health care system, as patients, mothers, caregivers, and health care providers. They have more frequent doctor visits, higher use of prescription medicines, and greater need for long-term care services than men. In addition to their own health needs, women also take on primary responsibility for managing health care for their children as well as caregiving for other chronically ill or elderly family members.
Despite great strides in the workplace and workforce participation, women still earn a fraction of men’s salaries — median income levels are 45 percent lower for women than men. 1 As a result, nearly 41 million women are low-income. 2 As health care costs outpace inflation and the costs of health care are increasingly shouldered by individuals, women’s lower incomes put them at a greater disadvantage. Many women in the workplace also face a tremendous challenge balancing their work and family responsibilities with their own health care needs. As the primary managers of their family’s health care needs, workplace supports such as flex-time, family health coverage, and paid family leave can help assist women manage the different facets of their health care.
For many women, however, accessing health care is a challenge. One-quarter of women (27%) report that they have had to delay or forgo needed care, one in five (21%) could not afford to fill a prescription medicine, and 15 percent report that they could not obtain needed specialty care. 3 For the nearly 17 million women who are uninsured, access to high quality, comprehensive care is even more compromised. 4 There are also issues with regard to access to reproductive health services. There are broad differences from state to state in what services insurance plans must cover such as contraception, screenings, and preventive care, as well as limits on access to and coverage for abortion services. On the federal level, funding for family planning services under Title X has not kept up with inflation and international assistance for family planning has been severely curtailed.
Major Health Policy Issues of Importance to Women
Reproductive HealthWomen’s health policy has long been associated with reproductive health care. In previous campaign cycles, abortion has often dominated discourse about reproductive health and has emerged as a highly charged political issue. However, reproductive health policy extends far beyond abortion services, and includes other critical concerns such as family planning, coverage for pregnancy and maternity care, and sex education.
One area in which policy activity has flourished in recent years, primarily at the state level, is insurance coverage for contraceptives. It has been estimated that a typical woman who wants to have two children will need to use contraception for at least 20 years. 5 However, insurance coverage for contraceptives lags behind coverage for many other basic benefits such as maternity care and other prescription drugs.6 As of September 2004, twenty-one states now require private health insurance plans to cover prescription contraceptives if they cover other prescription drugs; however, the 54 percent of workers who are in self-funded plans are not affected by these laws. 7 Federal legislation has been proposed but not passed.
For low-income women, public financing of family planning services through the Title X and Medicaid programs provides both access to contraception and important primary care. However, Title X funding has not kept pace with inflation, potentially constraining access to family planning services for low-income women.
Sex education is another area affecting young women that has been squarely at the center of a highly polarized policy debate. The current Administration has shown strong support for abstinence-only programs that teach abstinence until marriage and prohibit programs that operate under federal funds from teaching about contraceptives and condoms. Federal funding for abstinence-only sex education has more than tripled since 2001. 8 Opponents of the abstinence-only policy argue for promoting comprehensive sex education, which teaches about abstinence as well as contraception and prevention of STDs. Supporters of abstinence-only programs argue that this sends mixed signals to students and that abstaining from sex is the only way young people can be protected from unplanned pregnancies and STDs.
Abortion remains the most highly regulated women’s medical service. At the federal and state levels, strategies have been increasingly adopted to limit access to abortion. These include federal and state laws banning so-called “partial birth” abortions, parental consent and waiting laws, refusal clauses that exempt health care providers from performing abortions, and the appointment of judges who are opposed to abortion. Abortion rights proponents would seek to ease some of these barriers and facilitate access to abortion services as well as access to family planning services. Opponents of abortion rights would endorse policies that further limit access to abortion services.
Reproductive health is one of the areas where the policy positions differ most clearly. Some proposals (generally Democrats’) emphasize broadening access to family planning by requiring insurers to cover contraceptives, increasing Title X funding, reversing current restrictions on international funding to family planning agencies and appointing judges committed to upholding Roe v. Wade. Others (generally Republicans) would focus on further increasing funding for abstinence-only education and upholding and promoting laws that require parent consent for minors and place limits on federal funding for abortion in the U.S. and abroad.
Improving Insurance Coverage and Affordability of Care
Like men, almost two-thirds of women receive their health insurance through employers. 9 With premiums rising at double-digit rates for the last four years, workers have increasingly had to make larger contributions toward escalating premiums yet without receiving comparable growth in salaries. Furthermore, the majority of workers with employer-based insurance face deductibles and/or copayments when they need health care services. 10 These are important concerns for women, because they are more likely to need health care services throughout their lives, yet have lower incomes and thus are less able to afford additional out-of-pocket expenses.
Some policymakers are looking to the individual insurance market as a possible avenue for expanding coverage to the uninsured. However, moving to greater dependence on this market also poses challenges for women. Although the premium costs for these plans vary and are sometimes quite low, the actual costs of these policies can be quite expensive including very high deductibles and large co-insurance charges. Individually purchased policies are also often limited by exclusions for prior health conditions or require special riders at additional costs for maternity care.
Medicaid, the nation’s health and long-term care coverage program for the poor, today assists nearly one in ten women. Women make up nearly three-quarters of adult beneficiaries covered by the program. Historically, Medicaid has provided several benefits of particular importance to women, including covering one-third of all births in the U.S., financing over half of nursing home care, and covering a broad range of preventive and screening services. Starting in the late 1980’s, Medicaid was used as a vehicle to extend coverage to many low-income children, pregnant women, and working parents. More recently, these expansions have been curtailed and benefits reduced in response to the fiscal crisis facing most of the states. Choices about the future of the program — who will continue to be covered, what will be covered, as well as how care will be financed — have important consequences for the nation’s 41 million low-income women and their families.
The future of Medicare is also a priority for women over age 65. Given their longer lifespans, women comprise the majority (57%) of Medicare beneficiaries, rising to 80 percent of the Medicare population over 85 years. Given their disproportionately lower-incomes (55% of women over 65 have incomes below 200% of the federal poverty level compared to 35% of men), the costs of Medicare premiums, deductibles and coinsurance as well as the affordability of medications are major concerns facing many women in their senior years. 11 The future of Medicare will continue to be a central issue for the nation’s elderly women in the years to come.
With almost 17 million women uninsured, expanding health coverage to the nation’s 45 million uninsured is a policy priority for women. Some proposals would use a mix of public and private sector approaches, expanding public coverage under Medicaid and SCHIP to more of the nation’s low-income families and using various strategies to reduce costs so that more workers will be covered by their employers. Other major proposals aim to make individual health insurance plans more affordable to more people by subsidizing premium costs.
Balancing Work and Family Health Care Needs
Women take charge of nearly 90 percent of health care responsibilities for their children, including selecting their doctor, taking them to appointments, and choosing their health plans. However, for working mothers, this often presents challenges with their workplace responsibilities. Half of working mothers have to miss work when their child is sick, resulting in fears about job security and career advancement as well as tangible financial consequences. Half of working mothers do not get paid when they miss work to care for their sick children. 12
Women are also the major providers of informal caregiving for family members with disabling conditions, such as aging parents or spouses. These women shoulder heavy health care responsibilities, on top of their own health, family, and workplace responsibilities. There is often little in the way of physical or psychological supports for these women.
Comprehensive workplace benefits and supports, such as paid family leave, are particularly important for women. In 2003, California became the first state to enact a paid family leave benefit, and while federal legislation was introduced earlier this year, it has not been a major issue in this year’s election.
Long-Term Care
Long-term care is an under-recognized women’s health policy issue. Two-thirds of people who receive home health services (67%) and three-quarters of nursing home residents (75%) are women. 13 A year of care in a nursing home can cost $50,000 or more. Hiring a home health aide at $12 an hour for four hours a day, five days a week would cost over $12,000 for a year. However, m ost employer-sponsored health insurance plans do not cover long-term care and neither does Medicare, a particularly large gap for many seniors. Stand-alone long-term care insurance is expensive and cost prohibitive for many seniors. This leaves Medicaid as the major payer for long-term care services, but only for those seniors who are very poor or who have impoverished themselves with large health expenses. As the population ages, the need for policy solutions that address the cost of long-term will become more acute.
Clinical Research
Research has shown that many diseases and conditions, including heart disease, smoking, and lung cancer, affect women and men very differently. 14 There are also several diseases, such as breast cancer and osteoporosis, that primarily affect women, and another range of conditions, including pregnancy, menopause, and certain reproductive-related cancers that only affect women. Sex-based differences have been identified on several levels, including treatment efficacy, medication side effects, prevention strategies, and disease etiology. Today, there are dedicated clinical trials investigating women’s health, such as the NIH’s Women’s Health Initiative, and NIH policy requires that women be included in all federally funded clinical trials. Yet, there are still large gaps in knowledge about the effects of sex on many diseases and treatments. The amount of funding earmarked for women-specific research and for understanding the sex differences in the diseases that strike men and women have not been detailed by either candidate.
Assessing Candidate Positions
Health care has historically been an issue of particular significance to women. In a recent survey, women were more likely than men to report that health care will be one of the most important issues in determining their choice for president in the 2004 election. 15 However, it is important to understand that women’s health is not defined by any single issue. Women have much at stake in a host of larger health care debates, and the importance they place on health care as a voting issue reflects the influence of larger health policy matters on their own and their families’ health.
The following questions could be useful in understanding how the candidates propose to address some of the major areas of health policy affecting women.
How can the government help improve women’s access to health care?
What policies should be in place with regard to access to women’s reproductive health services?
How should the federal government address the rise in health care costs? How can policies help ease the burden of shifting costs to consumers, such as higher premiums, deductibles, and co-pays?
Should Congress pass federal legislation that requires health plans to cover contraceptives and other preventive services for women?
What strategies can be used to ease some of the tensions women face in caring for their families while meeting their workplace responsibilities? Should the government enact legislation for paid family leave?
What proposals would help improve health care access for low-income women and their families?
What can be done to assist seniors and families with long-term care costs?
What policies can be put in place to ensure that sufficient federal dollars are allocated to support health research of importance for women?
1 U.S. Census Bureau, March 2003 Current Population Survey.2 Low-income is defined as family incomes below 200% of poverty, which was equivalent to $30,520 for a family of three in 2003.3 Kaiser Family Foundation, Kaiser Women’s Health Survey, 2001.4 Kaiser Family Foundation, analysis of Urban Institute estimates from March 2004 Current Population Survey.5 Alan Guttmacher Institute, Contraceptive Use Factsheet, www.guttmacher.org.6 Alan Guttmacher Institute, State Policies in Brief: Insurance Coverage of Contraceptives, September 1, 2004.7 Kaiser/HRET Employer Health Benefits Survey: 2004.8 Bush-Cheney campaign, Agenda for America, www.georgebush.com.9 Kaiser Family Foundation analysis of Urban Institute estimates from March 2004 Current Population Survey. 10 Kaiser/HRET, Employer Health Benefits Survey: 2004. 11 Kaiser Family Foundation analysis of Urban Institute estimates from March 2004 Current Population Survey. 12 Kaiser Family Foundation, Kaiser Women’s Health Survey, 2001.13Health, United States, 2000. Nursing home data from the 1997 National Nursing Home Survey. Home health data from the 1996 National Home and Hospice Care Survey.14 Institute of Medicine, Exploring the Biological Contributions to Human Health: Does Sex Matter? 2001.15 Kaiser Family Foundation, Health Poll, June 2004.
States’ Role in Administering the New Part D Low-Income Subsidy Program: A Conference Call Discussion
The Medicare Modernization Act (MMA) created a major new subsidy program for an estimated 14 million low-income Medicare beneficiaries that will provide assistance with their cost-sharing obligations under the Part D drug benefit. The MMA requires state Medicaid agencies, along with the Social Security Administration (SSA), to accept applications for the new low-income subsidy. MMA also specifies that people who apply at Medicaid agencies for the low-income subsidy must be screened for eligibility for Medicare Savings Programs and, if found eligible, offered the chance to enroll. The proposed MMA regulations issued on August 3, 2004 provide further information on how CMS contemplates handling issues raised by the low-income subsidy program, and SSA is expected to issue shortly its own proposed regulations on its administration of the low-income subsidy.
To discuss the implications for states in administering MMA’s new low-income subsidy program, the National Association of Medicaid Directors and the Kaiser Commission on Medicaid and the Uninsured will hold the third in a series of calls with state Medicaid officials on the MMA.
What: A Conference Call Briefing for State Officials and Staff
When: Thursday, September 23, 20042:00 p.m. – 2:40 p.m. EDT Presentations2:40 p.m. – 4:00 p.m. EDT Q&A and Discussion
How: Via conference call.The conference call-in number is (800) 863-3908.Password: KCMU.Please call a few minutes early to secure a line (let the phone ring) to get through to the call.
Background materials for the call are available below:
A national Kaiser Family Foundation survey of parents found that a majority says they are “very” concerned about the amount of sex (60%) and violence (53%) their children are exposed to on TV.
The survey of 1,001 parents of children ages 2-17 was conducted in July and August 2004.
The survey – “Parents, Media, and Public Policy” – was released at a briefing on Thursday, September 23, 2004, that included Senator Sam Brownback, FCC Commissioner Kathleen Abernathy, former Chairman and CEO of the Motion Picture Association Jack Valenti, Senior Vice President at News Corporation Ellen Agress, and Director of the Children & the Media Program at Children Now, Patti Miller.
With nearly 45 million Americans under the age of 65 without health insurance – one in six Americans – addressing the uninsured population is a major issue in the upcoming election. Health insurance affects access to health care as well as the financial well-being of families. Thus, both the affordability of and access to insurance are of concern.
Nearly two-thirds of Americans under the age of 65 receive health insurance coverage as an employer benefit (156 million). While Medicare covers virtually all those who are 65 years or older, the nonelderly who do not have access to or cannot afford private insurance go with out health coverage unless they qualify for public programs. The number of uninsured has risen from about 31 million Americans in 1987 to 45 million in 2003 (12.9 percent in 1987 to 15 percent of the total population in 2003). Given the rising cost of health insurance, the number of uninsured is likely to grow in the absence of policy interventions.
Why is being uninsured a problem? Lack of health insurance compromises the health and financial well-being of individuals and families, but leaving so many uninsured also takes a toll on society. Health insurance makes a difference in whether and when people get necessary medical care, where they get their care, and ultimately, how healthy people are. Compared with the insured, the uninsured are less likely to have a regular doctor, less likely to obtain care when needed, and are less apt to get timely preventive and routine care, such as immunizations for children or annual check-ups and mammograms for adults. Further, there are often serious consequences of not obtaining appropriate care. The uninsured tend to be sicker when they are diagnosed, have higher rates of preventable and untreated illness, and are also more likely to be hospitalized for conditions like uncontrolled diabetes that could have been avoided. Having health insurance improves health overall and could reduce mortality rates for the uninsured by 10 to 15 percent. 2
Medical bills can mount quickly for an uninsured person. Insurance helps reduce the financial uncertainty associated with health care, as illness and health care needs are not always predictable and care can be very expensive. In 2000, about 50 percent of the one million Americans who filed for bankruptcy did so because of medical bills and other problems arising from serious illness or injury. Nearly half of the uninsured report that they are unable to pay their medical bills, and more than a third say that they had been contacted by a collection agency about unpaid medical bills. Fear of unpaid bills is a major reason why many of the uninsured do not get the care they need.3
Having a significant portion of the population without health insurance has societal costs as well. When an uninsured person receives care but cannot pay the medical bill, the cost must be borne by others and puts a particular burden on public health and medical resources.
Who are the uninsured? The uninsured are predominantly adults from low-income working families. Over 80 percent of the uninsured come from families with a full-time or part-time worker and nearly two-thirds come from low-income families (less than $30,000 for a family of three). In addition, those at the highest risk of being uninsured include the poor, young adults, those living in southern and western states, minorities, and noncitizens. While Medicaid and the State Children’s Health Insurance Program (SCHIP) have expanded in recent years to cover more children, public coverage for adults is limited. Among the nonelderly, the chances of experiencing a long spell without health insurance (12 months or longer) are highest for individuals with low incomes and young adults.
Why don’t all workers have coverage through their employer? Most Americans obtain coverage as a tax-free fringe benefit through an employer-sponsored health plan. However, employer-sponsored health insurance is voluntary— businesses are not legally required to offer a health benefit. Also, not all employees qualify for coverage, many employees cannot afford their share of the premium, and employees can choose not to participate. Coverage varies by industry, firm size, locale, and other factors. Certain types of industries, among them construction, retail, and personal services (e.g., child care) are less likely to provide insurance than manufacturing, transportation, or government service. Workers in small firms or who have part-time or seasonal jobs are less likely to have health insurance offered as a benefit by their employers. Low-wage workers are the least likely to be offered health insurance and, when offered, may not be able to afford their share of the premium.
What is the role of public health insurance programs? Medicaid and SCHIP provide health insurance coverage to certain low-income populations that meet eligibility requirements, but assistance is primarily targeted toward low-income children. Public coverage expansions for children helped to offset declines in employer-sponsored coverage in recent years. However, nine million children remain uninsured. The role of public programs for adults is far more limited, covering only some low-income parents and disabled individuals and leaving most childless adults ineligible, regardless of how poor they are. Public coverage is especially important during economic downturns as more people become eligible as they move into lower income categories and lose employer-based coverage, but, at the same time, during economic downturns state revenue constraints put financial pressure on public coverage.
Why is the uninsured population growing? Changes in the economy and rising health care costs have led to declines in employer-sponsored coverage in recent years and these declines are likely to continue, especially if health care costs continue to rise at their current double digit pace. In 2004, annual premiums averaged $9,950 for family coverage and $3,695 for single coverage. The employee share of premiums has been on the rise and now averages $47 per month for single coverage and $222 for family coverage.4 Since 2000, premiums for family coverage have risen nearly 60 percent.5
Changes in the economy are also contributing to growth in the uninsured as jobs shift from industries such as manufacturing that tend to provide health insurance benefits to those, such as the service industry, that are less likely to provide health benefits. Jobs are also shifting to small businesses, which are less likely to offer health insurance. Some uninsured are eligible for coverage through their jobs but turn it down, usually because they cannot afford or do not want to pay the required employee share of the premium. Those insured by Medicaid and SCHIP – primarily low-income children and some adults – may lose coverage if their incomes rise, or if state budget constraints lead to reductions in eligibility.
Options for Covering the Uninsured and the 2004 Debate
While most candidates reflect the public view that some type of government response is needed to reduce the number of uninsured Americans, there is little consensus on the solution. Proposals differ in terms of their scope and costs, and are often controversial because of their effects on different stakeholders. Proposed solutions range from adoption of a single payer government health insurance system to narrow proposals targeting certain categories of the uninsured. In recent years, most proposals emerging from Congress or the White House would expand health insurance coverage incrementally, helping particular groups of the uninsured – such as poor or near-poor children, workers in small firms, or the near-elderly. Some, however, aim for more expansive approaches that could potentially result in most Americans being insured. Major approaches include:
Expanding coverage through existing public health coverage programs: With Medicaid, SCHIP, and Medicare providing health insurance coverage to tens of millions of the population, some candidates propose further expansions of these programs to a broader group of children and adults. In the case of Medicaid and SCHIP, proposals to expand coverage to the parents of eligible children or including poor, childless adults have been put forward by some states and are now a part of the national debate. Some policymakers suggest that Medicare can serve as the vehicle for coverage expansions, especially for the near-elderly, many whom increasingly face losing employer-based health coverage and find it difficult or prohibitively expensive to buy health insurance in the private market.
The public program approach could reach many low-income people, but only with a sufficient, stable commitment of either state and/or federal government money to either adequately fund public coverage or subsidize the cost to individuals of buying into the programs. Additional challenges include educating the public about coverage opportunities and simplifying enrollment procedures for these expansions. There are currently millions of poor uninsured who could be covered through a concerted effort to sign up those now eligible, but not enrolled in Medicaid or SCHIP. However, enrolling children and some of their parents who are currently eligible for Medicaid and SCHIP will ultimately increase the cost of these programs, and require more dedicated government funds.
Expanding access to group coverage: Recognizing that the American health system relies heavily on an employer-based coverage approach and that nearly two-thirds of the nonelderly get coverage through employers, some proposals would make it easier for small employers and the self-employed to band into larger health insurance purchasing pools, potentially giving them large group negotiating power when purchasing insurance. A related proposal would let the uninsured purchase coverage through the Federal Employees Health Benefit Program (FEHBP) or through state public employee health programs. Establishing purchasing pools or allowing businesses and individuals to join existing pools of coverage could lower premiums and broaden the choice of policies available to the uninsured. However, many experts believe that these proposals would not reduce the number of uninsured significantly unless the government helps subsidize the premiums for the health coverage or, at least, provides some form of federal reinsurance for high cost enrollees.
Recognizing that expanding group purchasing may not be enough to reduce the uninsured population, some policymakers propose offering new tax incentives to employers to offer and partially subsidize the cost of health insurance for their employees. Employer tax credits can, however, be very costly to the government. Studies have shown that employers who currently do not offer insurance to their workers will not do so unless most of the cost of the insurance is covered by the tax credit.
Subsidizing the purchase of individual private health coverage: While job-based coverage is a dominant feature of the American health system, some experts and policymakers believe it is an outdated approach in the country’s new economy where workers change employers several times during their career and are unable to maintain their health coverage across jobs. Offering tax credits or deductions to help offset the cost of health insurance for the uninsured is an approach backed by some policymakers, although proposals vary by whom they would assist. Some would target tax provisions to the low-income; others would assist all uninsured, regardless of income.
Tax-based approaches could reduce the number of uninsured, but the cost to the government could be high, since those least able to afford insurance would require substantial financial assistance to pay their premiums. Moreover, such tax credits are likely to also be used by many people who are already insured, providing greater tax equity, but also increasing the cost for coverage.
Another set of proposals would change federal tax laws to make it easier for people to take advantage of tax-free health savings accounts (HSAs) and similar types of arrangements. An HSA is a tax-free way to set aside money in interest-bearing accounts to pay uncovered medical care expenses, coupled with high-deductible insurance. Proponents argue that these arrangements would help reduce the uninsured population and control costs by making individuals more cost-conscious. Opponents counter that HSAs tend to attract healthy people, driving up the cost of health insurance for others, and that HSAs are unlikely to reduce the number of uninsured because the premiums and deductibles are unaffordable for those most in need of insurance.
Assessing Candidate Positions
Various policy proposals have been offered to expand health coverage to the nation’s uninsured population. Although most proposals are incremental and build on our current system, they vary in whom they target, what strategies they use to expand insurance, and how much they cost. Given the size of our uninsured population and the large share who are low-income, ultimately, options to expand health insurance to most of the uninsured will require a substantial financial commitment from government.
Included below are a series of questions to help evaluate the different proposals set forth by policymakers and candidates in the 2004 election.
Who would gain coverage under the proposal? What segments of the population does the proposal target?
What share of the uninsured would be covered as a result of the proposal?
Would the proposal affect those who already have health insurance? If so, how?
How much would the proposal cost, and how would it be financed?
Would the proposal expand public programs like Medicaid, S-CHIP, or Medicare?
Does the proposal provide financial assistance to help people purchase private or public insurance through tax credits or some other mechanism?
Given the cost of health insurance policies, is the subsidy adequate for those for whom it is targeted?
Does the proposal provide a mechanism for reducing premium costs?
1 Unless otherwise noted, data are from the March 2004 Current Population Survey (CPS) as analyzed and reported in: U.S. Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2003. August 2004.
** Update: For information on health care and the 2008 election, visitwww.health08.org. **
Health care issues continue to be important for many Americans and a vital part of the policy debates in Washington and around the country. During an election season, candidates propose and debate their solutions for the pressing policy issues facing their constituents. The 2004 election season is no different and the Kaiser Family Foundation is issuing informational materials on some of the health policy issues that are of concern to the American public.
Over the next few weeks several background issue briefs and presidential candidate comparisons will be made available. For more detailed information, the Foundation has many other resources that are available via links on this page or on other parts of our website.
The Health Care Costs, Medicare, HIV/AIDS, Medical Liability, Uninsured and Long Term Care election issue briefs were prepared by Health Policy Alternatives, Inc. with support from Foundation staff. The Public Opinion Women’s Health Policy, Race, Ethnicity and Health Care, and Health Care for Americans with Disabilities briefs were prepared by Foundation staff.
This survey snapshot highlights previously unreleased data about young people’s use of computers and the Internet, focusing on socio-economic issues such as race, income, and parent education. The data are drawn from two Kaiser Family Foundation surveys conducted in 2003 and 2004.
This issue brief, “Children, The Digital Divide, and Federal Policy,” includes new research findings and reviews the latest information on wiring the nation’s schools and libraries, including points of access, the speed of connection, and what children are doing online. The report also examines current Federal policies and policy ideas that could address the new digital divide.
This is the tenth in a series of reports and fact sheets on topics related to children, media and health that pull together the most relevant research on such issues as TV violence, teens online, media ratings, and children and video games.
The Medicare program is a valuable source of health insurance coverage for more than 41 million Americans. Medicare enjoys broad public support, but the program faces a number of challenges in the years ahead, including the implementation of the new Medicare drug benefit beginning in 2006. Another issue pertains to the affordability of health and long-term care as premiums and health care costs rise faster than income. Lastly, there is the question of how to finance Medicare benefits for a population expected to double in the next 25 years, without unduly burdening beneficiaries, taxpayers, and the overall economy.
Background
The Medicare program provides health coverage to over 41 million Americans including virtually everyone age 65 and older and over 6 million younger adults with permanent disabilities. Like Social Security, Medicare is a “social insurance” program that provides health coverage, regardless of income or health status. People pay into Medicare throughout their working lives, and are generally eligible for Medicare when they turn 65. Medicare covers most health care services, but does not currently pay for prescription drugs or long-term care services, and has relatively high cost-sharing requirements. Beginning in 2006, Medicare will begin to provide some prescription drug coverage as a result of the recently passed Medicare Modernization Act.
Medicare serves a diverse population. While some have high incomes and fairly good health, many on Medicare live with multiple chronic conditions and live on fixed incomes. Nearly one-third say their health status is fair or poor, about a quarter have problems with mental functioning or cognitive impairments, and more than 2 million Medicare beneficiaries live in nursing homes or other long-term care settings. Most rely on Social Security for the bulk of their income, and are especially vulnerable to the high and rising cost of health care services. Nearly four in ten have incomes below 150 percent of poverty – about $14,000 for individuals and $18,700 for couples.
Today, Medicare enjoys broad support among seniors and the general public, but the program faces a number of challenges for the future.
Implementing the Medicare drug benefit in 2006, and addressing concerns about the adequacy of the drug benefit
Making health and long-term care affordable over time, particularly as premiums and other health care costs rise more rapidly than income.
Financing Medicare benefits for future generations, without unduly burdening beneficiaries, taxpayers, and the overall economy.
Finally, a key question that could drive much of the future debate about Medicare relates to the role of government versus private plans under Medicare.
Policy Challenges Facing Medicare
Implementing the Medicare Drug Law After years of discussion and debate, Congress passed the Medicare Modernization Act of 2003 which included a new outpatient prescription drug benefit. Beginning in 2006, beneficiaries will be able to get prescription drug coverage, either by signing up with new private insurance plans set up to offer the Medicare drug benefit for those who prefer the traditional fee-for-service program, or by enrolling in integrated health plans, such as HMOs or PPOs. Under the standard drug benefit, beneficiaries in 2006 will:
Pay the first $250 in drug costs (deductible);
Pay 25% of total drug costs between $250 and $2,250;
Pay 100% of drug costs between $2,250 and $5,100 in total drug costs (the $2,850 gap or “hole in the doughnut”), equivalent to $3,600 in out-of-pocket spending for covered drugs;
Pay the greater of $2 for generics, $5 for brand drugs, or 5% coinsurance after reaching the $3,600 out-of-pocket limit or catastrophic threshold.
Beneficiaries will also pay an estimated $35 per month in premiums for basic drug coverage in 2006, in addition to the Part B premium. These cost-sharing requirements will not apply to those with low incomes and limited assets (generally incomes less than about $14,000/year), who will receive more generous subsidies to help pay for their medications.
A critical issue for seniors relates to the adequacy of the drug benefit and whether it will do enough to lower their drug costs. The benefit gap or “hole in the doughnut” is certainly a major concern for those with multiple health conditions, taking numerous prescription drugs as part of their treatment.
The new Medicare law relies on market-based competition to drive down drug costs and explicitly prohibits the federal government from negotiating prices directly with manufacturers, pharmacies, or plans. Skeptics – generally Democrats – question the ability of private plans to control costs through competition, and instead favor changing the law to allow the federal government to use its buying power to negotiate with drug companies to try to get lower prices for prescription drugs for people on Medicare. Proponents of competition – generally Republicans – argue that substantial savings will be obtained by private plans and are concerned that government negotiations will result in price controls that would ultimately drive US drug companies to do less research and development.
Keeping Medicare Benefits Affordable Despite significant protections offered by Medicare, there are gaps in Medicare’s benefits package that pose financial concerns for many people on Medicare. Unlike many private plans, Medicare does not have a cap on out-of-pocket spending, exposing those with serious medical problems to extremely high expenses. Today, seniors spend roughly 22 percent of their income on health care. Medicare does not cover long-term care or pay for eyeglasses or hearing aids. In 2005, Medicare beneficiaries will be able to use discount cards for drugs, but the real drug benefit does not begin until 2006.
To help fill in these gaps and make care more affordable, most people on Medicare have some form of supplemental coverage, such as an employer or union plan, a Medigap policy, or Medicaid for those with very low incomes. There are concerns, however, that rising health care costs will lead to the erosion of such benefits in the future. Employers have begun to ratchet back retiree health benefits in recent years and some predict that employers may now discontinue drug coverage despite financial incentives in the Medicare drug law for employers to continue as a primary source of drug benefits.
In the current environment, there is little discussion about expanding Medicare to cover long-term care or in substantially reducing cost-sharing for people covered by the program. Some support expanding the role of private managed care plans as a means to improve benefits and lower costs under Medicare. Others question this approach given the recent withdrawal of Medicare HMOs throughout the country, cut backs on benefits, and increases in premiums and cost-sharing paid by enrollees.
The challenge is that strategies to protect beneficiaries from higher costs could add costs to the program, requiring additional revenues to help pay for them. Policymakers may not be inclined to add additional costs to Medicare given the cost of the new drug benefit, particularly during this period of historically high federal deficits. In fact, some experts expect that lawmakers may look to Medicare for cost-saving measures in an effort to help control the growth of Medicare spending and lower the federal deficit. In a limited way, Congress took a step in that direction by charging higher premiums for Medicare beneficiaries with incomes over $80,000/single ($160,000/couple) and by raising the part B deductible.
Financing Care for Future Generations One of the greatest challenges facing Medicare is financing care for the rapidly growing Medicare population. Financing for Medicare generally comes from three main sources: payroll taxes paid by workers and employers; part B premiums paid by beneficiaries ($66.60/month in 2004 rising to $78.10/month in 2005) and general revenues. Program rolls are projected to swell from 41 million today to 76 million by the year 2030 and there will be fewer workers per retiree to help support those on Medicare. Government experts warn that by 2019, there will be insufficient funds in the Medicare Hospital Trust Fund to pay for benefits.
How to make Medicare financially solvent over the long term, while meeting the health care needs of an aging population is a critical policy concern. While long-term reforms are not the focus of either presidential candidate’s health policy agenda, there are a number of broad strategies under discussion.
The most far-reaching proposal would fundamentally restructure the Medicare program along the lines of the Federal Employees Health Benefit program (FEHBP). This approach would essentially transform Medicare from a program that provides a defined set of benefits to a “defined contribution system.” Under this approach, beneficiaries would get a choice of health plans and Medicare would pay a fixed dollar amount or share of the cost of the care provided by the health plan. If Medicare payments do not cover the full cost of the monthly premium amount, beneficiaries would have to pay the difference out of their own pockets.
Proponents – generally Republicans – say that competition between private plans could ultimately control Medicare spending and offer beneficiaries a choice of health plans with more generous benefits and lower costs. Medicare expenditures would be more predictable and controllable with a defined government contribution to plans.
Skeptics of this approach – generally Democrats – argue that Medicare’s historic guarantee of a defined package of benefits should be preserved in a modernized fee-for-service (FFS) program administered by the government. They raise concerns that private health plans may not have a long-term commitment to the FFS Medicare program and that moving to fixed payments for covered care may lead to increased out-of-pocket expenses for beneficiaries.
Other Medicare proposals would keep the program’s basic framework in place. These include: cutting the growth in Medicare payments to doctors, hospitals, and health plans, increasing beneficiary premiums and cost-sharing, or raising the age of Medicare eligibility. None of these changes are without controversy. Another approach to help pay for future generations – but one that is not currently on the table – would be to increase revenues, such as the payroll tax.
Assessing Candidate Positions
Neither of the presidential campaigns or major political parties has released a detailed set of Medicare policy proposals. Much of the debate thus far has focused on disagreements about the new prescription drug benefit and the role of private insurance plans in Medicare. Less attention has been paid to broader reforms. However, the direction and pace of reform will be significantly affected by the election outcome. The broad visions of how Medicare should be designed in the future will certainly inform the policy choices made by Congress and the administration over the next four years. The future direction of the program appears to be governed by differences in ideology, particularly the role of government versus the role of the private sector. It is important to carefully consider the policy recommendations of the candidates to understand their vision for the future of Medicare. The following questions are intended to help discern the candidates’ likely approach to Medicare reform.
What strategies would you recommend to improve the Medicare drug benefit?
Should the government play a direct role in negotiating drug prices, or should this be left to market competition among private health plans?
How would you propose to help families with the high cost of long-term care?
What is the appropriate role for private health plans in Medicare?
Supports greater role for private plans under Medicare to give seniors greater choice of health plans.
Supports giving seniors a choice of a health plan that’s right for them. Opposes privatization of Medicare that causes benefit cutbacks. Opposes forcing seniors into HMOs to get drug benefits or affordable premiums.
Market competition
Supports competition between Medicare private plans and the traditional FFS program. Supported increasing payments to private plans that contract with Medicare.Opposes competition between private health plans and the traditional Medicare FFS program. Opposes higher payments to private plans that contract with Medicare.
Part B premiums
Supported increasing the Part B premium for beneficiaries with higher incomes.No position announced.
Medicare Drug Benefit
Opposes direct government negotiation of prices; supports relying on competition between private plans to control drug costs.Supports direct government negotiation of drug prices.Note: The Bush-Cheney GOP Platform does not include any new Medicare initiatives. The positions in this table are based on the President’s policies leading to the enactment of the Medicare Modernization Act of 2003.
1 “Offering Health Care & Prescription Drug Choices,” http://www.georgewbush.com; “The Budget for Fiscal Year 2005,” OMB, February, 2004; “President Bush Plans More Choices & Better Benefits for Medicare,” www.GOP.com.
2 “A Plan to Protect & Strengthen Medicare & Social Security,” http://www.InsideHealthPolicy.com, August 5, 2004; “The 2004 Democratic National Platform Committee Report,” DNC, July, 2004; “A Plan for Stronger, Healthier Seniors,” http://www.johnkerry.com, August, 2004.
