John Holahan

The 2007–09 Recession And Health Insurance Coverage

Loss of employment and declining incomes meant that five million Americans lost employment-based health insurance during the recent economic recession (2007-09). All groups of Americans were affected, but the growth in the number of uninsured people was particularly noticeable for whites, native-born citizens, and residents of the Midwest and South. Adults did not benefit nearly as much as children from public programs designed to offset the decline in employer-sponsored insurance and thus bore all of the burden of rising uninsurance. Throughout the past decade, even in good economic times, the number of Americans with employer-sponsored insurance has fallen, and the number of uninsured Americans has increased. This finding underscores the importance of planned coverage expansions under the Affordable Care Act.

Which children are still uninsured and why.

A strong economy and increased enrollment in employer-sponsored health insurance coverage, together with expansions in Medicaid and State Childrens Health Insurance Program (SCHIP) led to reductions in uninsurance among low-income American children between 1998 and 2000 (from 15.6% to 13.3%). Nonetheless, 12% (about 9 million) of children remained uninsured. Identifying these children and understanding the factors that contribute to their continued lack of health coverage is key to providing them access to health care. Using 1994, 1998, and 2000 census data, this article analyzes recent trends in childrens health coverage, as well as the groups that make up the population of uninsured children. The picture that emerges from these analyses is one of tremendous variation in coverage for different groups of children, with some groups having a higher risk for lacking health insurance. For example, poor children, Hispanics, adolescents, and children with foreign-born parents (particularly those whose parents are not U.S. citizens) are overrepresented among the uninsured. The authors conclude that the strong economy and concomitant increase in employer-based coverage played a bigger part in reducing uninsurance rates than did expansions in public programs. They also argue that lack of participation by eligible children rather than inadequate eligibility levels is the key policy issue, and conclude with several recommendations to increase program participation.

Nursing Home Reimbursement: Implications for Cost Containment, Access, and Quality

The individual states have many options in designing Medicaid reimbursement systems for nursing homes. Each option has a differential effect on incentives--and outcomes--for containing costs, providing quality care, and maintaining access to care. The mix and consequences of specific choices are analyzed in a framework that disaggregates costs into three components. Tradeoffs among competing elements will be inevitable, but reimbursement policy can maximize both efficiency and equity.

Is Health Care Spending Higher under Medicaid or Private Insurance

This paper addresses the question of whether Medicaid is in fact a high-cost program after adjusting for the health of the people it covers. We compare and simulate annual per capita medical spending for lower-income people (families with incomes under 200% of poverty) covered for a full year by either Medicaid or private insurance. We first show that low-income privately insured enrollees and Medicaid enrollees have very different socioeconomic and health characteristics. We then present simulated comparisons based on multivariate statistical models that estimate the effects of private and Medicaid coverage on the likelihood of using services, and the level of expenditures, given any use, holding constant demographic, economic, and health status characteristics. The simulations demonstrate that if people with Medicaid coverage—with their health status, disability, and chronic conditions—were given private coverage, they would cost considerably more than they do today. Conversely, if the privately insured were given Medicaid coverage, spending would be lower. We find no evidence that spending differences between Medicaid and private coverage for low-income people are due to lower service use by Medicaid beneficiaries. We conclude that most of the difference in expenditures is due to differences in provider payment rates.

The U.S. economy and changes in health insurance coverage, 2000-2006.

The number of uninsured Americans increased by 3.4 million between 2004 and 2006, despite improving economic conditions. In the first four years of the decade, during a period of economic recession, the number increased by 6.0 million. The dominant factor in both periods was a decline in employer-sponsored insurance coverage. Although the recent decline was less than that experienced from 2000 to 2004, growth in public coverage was small, and the number of uninsured people increased by 1.0 million children and 2.4 million adults. Employer coverage declined most for self-employed or small-firm workers, in the South, and among noncitizens.

Should Medicare Compensate Hospitals for Administratively Necessary Days

Days that a patient remains in a hospital due to inability to secure nursing home placement are termed administratively necessary days (ANDs). Some hospitals under Medicares prospective payment system have incurred discharge delays of this kind. Nursing home bed supply is one major problematic factor; others include adequacy of Medicare nursing home reimbursement rates relative to nursing home costs in an area, the willingness of facilities in an area to serve those needing skilled care, and stringency of relevant Medicaid reimbursement policy. Two promising approaches for dealing with ANDs are increasing nursing home reimbursement rates, and adjusting Medicare payments for exceptionally long-staying patients or those requiring exceptionally intensive care in hospitals.

Medicare and Medicaid Spending Trends and the Deficit Debate

Are proposed major structural changes to Medicare and Medicaid really necessary to create sustainable spending growth? Projections based on recent trends in per-enrollee spending suggest that the answer is no.

Nursing home transfers and mean length of stay in the prospective payment era.

Under Medicares Prospective Payment System (PPS), hospitals have incentives to discharge Medicare patients as quickly as medically feasible, but because of shortages of nursing home beds and differential long-term care arrangements, some hospitals may encounter difficulty placing patients in nursing homes, leading to hospital backup days. This study relied on Tobit and weighted least-squares analysis to examine the determinants of hospital mean length of stay and transfer rates to skilled and intermediate care homes for selected diagnosis-related groups (DRGs) with high levels of postacute service use. Hospitals in low bed supply areas were found to have proportionately fewer nursing home transfers and longer mean lengths of stay. Having swing beds or a long-term care unit led to speedier discharges and higher skilled nursing facility (SNF) transfers, especially for patients with hip or femur procedures or major joint and limb reattachment procedures (DRGs 209 and 210). The results suggest that Medicare should consider compensating hospitals for backup days and that bundled payment experiments could reduce current inequities resulting from differential access to nursing home care.

Commercial Health Plan Participation in Medicaid Managed Care: An Examination of Six Markets

This study examines six local health care markets to gain a better understanding of the factors associated with the decision by commercial plans to participate in Medicaid managed care (MMC). Findings suggest that no single factor explained why plans chose to participate in MMC in a particular market. Instead, a combination of factors—generally economic but not always—determined whether a plan participated. While rate adequacy was central, it was not the only factor. Results indicate that it is capitation rates relative to other factors (such as provider costs, administrative costs, enrollment volume, growth opportunities in other markets) that matter rather than simply the level of rates.

Geographic variations in physician service utilization.

This article investigates the geographic variation in Medicare physician services by type of service. Using 1990 Medicare beneficiary samples, age-sex-race adjusted population based physician service rates are computed. Physician services are measured using relative value units (RVUs)from the Medicare feeschedule. There is substantial variation across the states in utilization levels (Florida 38 percent above the U.S. mean; Vermont and Montana 29 percent below the mean) and a much greater range at the metropolitan area level. With the exception of major surgery, urban area benefciaries generally receive higher amounts of most evaluation and management services (particularly consultations), imaging services, and diagnostic testing. If volume performance standards (or an entitlement cap) were established at a state or area level, policymakers would have to address issues of geographic variation.