INCREMENTAL STRATEGIES FOR PROVIDING HEALTH-INSURANCE FOR THE UNINSURED - PROJECTED FEDERAL COSTS AND NUMBER OF NEWLY INSURED

Objective.-To present several incremental strategies for extending hea lth insurance coverage for segments of an estimated 40.6 million unins ured persons in the United States. Along with these strategies, the fe deral costs and estimates of the number of newly insured are presented . Design.-Using data from the Congressional Budget Office and the fede ral government, the number of newly insured persons in the United Stat es under options designed to increase coverage among uninsured childre n, their parents, and workers between jobs are simulated. The federal costs and coverage implications of these options are estimated for fed eral fiscal years 1998 through 2002. Methods.-Three distinct increment al approaches for covering the uninsured are explored. The first appro ach would expand coverage through the current Medicaid program. The se cond approach would provide financial incentives for parents of childr en eligible for Medicaid to purchase coverage, and the final approach provides time-limited subsidies allowing workers and their families to purchase insurance when they are between jobs. Main Results.-The fede ral costs of these approaches range from $2 billion to $3 billion per year (enrollment outreach approach) to $5 billion to $7 billion per ye ar (enrolling parents of Medicaid-eligible children approach). If purs ued simultaneously, the incremental strategies under investigation cou ld extend health insurance to more than 7 million uninsured persons in the United States. The cost of these options could be financed throug h Medicaid savings, restructuring the current disproportionate share p ayments made through Medicare and Medicaid, increasing excise taxes on tobacco, or all of the above. Conclusions.-The incremental strategies would build on the current US health care delivery system by providin g targeted financial assistance to specific populations. By their natu re, such reforms could provide a political means for compromise and ag reement between Congress and the president. Though the reforms do not, by design, provide a comprehensive solution to the problems facing th e uninsured, they would address the severe problems facing many low- a nd middle-income families unable to purchase health insurance today.