Monday, June 2, 2008

Health Care and Public Assistance

Twelve million people in the U.S., or 25% of the nation's estimated 47 million uninsured, are eligible for public insurance (e.g., Medicaid , SCHIP) but are not enrolled because they are not aware of the programs, don't know how to enroll or don't want to be linked to a publicly financed program, according to the National Institute for Health Care Management Foundation. Most older Americans have health insurance through Medicare. Medicare covers a variety of services, including inpatient hospital care, physician services, hospital outpatient care, home health care, skilled nursing facility care, hospice services, and (beginning in January 2006) prescription drugs. Utilization rates for many services change over time because of changes in physician practice patterns, medical technology, Medicare payment policies, and patient demographics reported at AgingStats.gov.

According to the Federal Interagency Forum on Aging Related Statistics, older Americans use more health care than any other age group. Health care costs are increasing rapidly at the same time the Baby Boom generation is approaching retirement age. Prescription drug costs have increased rapidly in recent years, as more new drugs become available. Lack of prescription drug coverage has created a financial hardship for many older Americans. Medicare coverage of prescription drugs began in January 2006, including a low income subsidy for beneficiaries with low incomes and assets. Most Medicare enrollees have a private insurance supplement, approximately equally split between employer sponsored and Medigap policies. Medicare covers about one-half of the health care costs of Medicare enrollees age 65 and over. Medicare’s payments are focused on acute care services such as hospitals and physicians. Nursing home care, prescription drugs, and dental care have been primarily financed out-of-pocket or by other payers.

The Forum also reported that the number of veterans age 65 and over who receive health care from the Veterans Health Administration (VHA) within the Department of Veterans Affairs has been steadily increasing. This increase may be because VHA fills important gaps in older veterans’ health care needs not currently covered or fully covered by Medicare, such as mental health services, long-term care (nursing home care and community-based care), and specialized services for the disabled. An increasing number of older veterans are turning to VHA for their health care needs despite their potential eligibility for other sources of health care, most notably prescription drug coverage through Medicare. VHA estimates that 94% of its enrollees age 65 and over are covered by Medicare Part A, 74% by Medicare Part B, 51% by Medigap, 13% by Medicaid, 20% by private insurance (excluding Medigap), and 10% by TRICARE for Life. About 4% have no other public or private coverage.

According to Governing.com, twelve years ago, Bill Clinton and the U.S. Congress ended "welfare as we know it." Gone was the idea of an open-ended entitlement for those mired in poverty. In its place came Temporary Assistance for Needy Families and the notion that families could — and should — work their way out of their impoverished straits. The question today is not so much whether TANF works but whether welfare as we now know it still matters. There is considerable evidence that many have. Through the late 1990s, poverty among single-parent families fell by 30 percent. Black-child poverty reached its lowest level in history. A strong economy played a key role in driving down poverty rates during that period. Also, welfare reform, which, besides emphasizing work gave states the flexibility to help clients with things such as child care, transportation, clothing and whatever else a family needed in order to get on its feet.

However, as reported on their site, there's also evidence that the welfare program has become a more punitive system — one geared to pushing people off the rolls rather than helping them become employed and self-sufficient. And the cost of that approach is showing up in increased use of food stamps, Medicaid and other safety net programs. In most states, caseloads have either stabilized or are trending slightly upward. One reason is that the easy cases have been washed out of the system. Those who were essentially work-ready — they just needed a little push and a little extra help — are off the rolls. Now the caseload is made up of those who have more serious and numerous barriers to employment such as mental or emotional problems or illness and physical problems. Many are immigrants who don't speak English. There has always been the threat and use of sanctions. Those clients who don't live up to work requirements could be hit with penalties, which include everything from a gradual ratcheting down of benefits to an immediate and complete cutoff of benefits. Caseworkers are trying very hard to get families to see employment and other options that are available to them.

The Kaiser Foundation reports that every one percentage point rise in the unemployment rate leads to a 1.1 million increase in the uninsured population and a one million increase in Medicaid and SCHIP enrollment, according to a new Kaiser analysis. As the country faces another economic downturn, many states are scrambling to deal with the impact of poor economic conditions on programs, like Medicaid and the State Children’s Health Insurance Program (SCHIP), that are reliant on state funding. To be better able to cope, states are looking for fiscal relief from the federal government as well as obtaining a moratorium on federal regulations that would reduce Medicaid funding for states from the Congress. Like Medicaid, SCHIP is a partnership between federal and state governments.

A definition of the SCHIP program appears on the site of the National Conference of State Legislatures. The State Children's Health Insurance Program (SCHIP) was created by the Balanced Budget Act of 1997, enacted Title XXI of the Social Security Act, and has allocated about $20 billion over 10 years to help states insure low-income children who are ineligible for Medicaid but cannot afford private insurance. States receive an enhanced federal match (greater than the state's Medicaid match) to provide for this coverage. Each state is entitled to a specific allotment of federal funds each year. States are allowed three years to spend their allotments. After three years, Title XXI provides that all remaining funds be reallocated to states that have used up their allotments. President Bush signed an extension of that plan in late 2007 that would cover existing participants.

So how does all this affect the rest of us who are not on public assistance? We pay taxes to support the government's expenditures to cover all those Americans who are on these programs. Taxes are how the system pays for Medicare, SCHIP, the VA, and countless other programs available to Americans. The more people who go on those entitlements, the more our taxes are stretched beyond the limit of use by available money. And taxes continue to increase. Taxes also fund coverage for all public employees, veterans, and the military (e.g. all members of Congress have publicly-funded insurance). That is one of the reasons that universal health care is such a hugely scary deal. Our taxes would go to pay for health care for anyone who didn't have insurance, and the likelihood of the tax rate increasing to pay for it is great. The other option is that the government goes bankrupt because there's not enough money to pay for universal health care.

Public assistance health care is only going to get more expensive as tens of millions of Americans are reaching eligibility for Medicare every year. As the economy gets tough, so does the availability of employer sponsored health care. Clearly, the answer to paying for all the expense involved is going to be a challenge in the months and years ahead.

Until next time. Let me know what you think.

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