HEALTH CARE/Joan Retsinas

States Offer Hope for the Uninsured

The holidays have passed. Maybe the 46 million uninsured Americans found iPods under their trees, atop their mantles, beside their beds -- the spirit of kindliness was alive this holiday season. Maybe they found flat screen televisions -- some families prospered in 2006. But they didn't find health insurance. No benevolent sprite delivered that.

It's time for the uninsured to mount another letter-writing campaign, this time to Uncle Sam. He is the only one who can deliver. This year, governors will join the chorus demanding federal help.

For states, 2007 promises to be a year of health insurance. Some states, like Massachusetts, Pennsylvania and New Jersey, are drafting plans to cover more residents. After all, states cover the poor and the near-poor (working and not) via Medicaid and the State Children's Health Insurance Program (SCHIP), funded jointly by states and the federal government. Why not cover more working people who can't get, or afford, insurance at their workplaces? As employers scale back coverage, more constituents are finding themselves uninsured, related to somebody who is uninsured, or fear the day when they will be uninsured. Federal officials don't bump into uninsured constituents in the supermarket, in the post office, at church. But state officials do. At the local level, the uninsured are hard to avoid. So states will draft their "solutions."

States, though, face a Catch-22: that do-gooder, good-government initiative will wreak havoc on the budget.

Consider the enrollment crisis. The more people who are uninsured, the more people who will want state-subsidized insurance. Yet the more enrollees, the higher the economic toll on states. States face dueling goals: They want to cover as many residents as need help; on the other hand, they want to remain solvent. Tennessee was the first state to expand coverage to non-Medicaid children, under TennCare. Yet after a few successful years, Tennessee closed enrollment, temporarily, to gain some budgetary respite. Other states have fared the same: expansions of coverage, followed by shut-offs, or contraction of coverage.

Writing for the Health Affairs Web site ( on Dec. 19, Jonathan Oberlander ["The Rise and Fall of the Oregon Health Plan"] describes the Oregon experience. In 1992 Oregon elected to curtail benefits, thereby allowing the state to extend insurance to more poverty-level people. From 1992 to 1996, the rate of uninsured in Oregon fell from 18% to 11%. In 2000 Oregon further pared benefits for an "expansion" population of residents earning 185% of poverty, who would pay to enroll -- but a premium far lower than conventional insurance. In January 2002 104,000 "expansion" Oregonians enrolled; by December 2003, the number had plummeted to 29,000. In 2004 the program closed enrollment. Today 24,000 people remain. During those few years, costs rose. At the same time, unemployment rose, and personal tax receipts fell. Also, the "expansion" population didn't particularly like this pared-down insurance.

Policy myopia is endemic to state officials. To much fanfare, governors and legislators launch a "bold" and "creative" plan to insure more residents. In the short term, the plan works. Longer-term, any spike in costs, or drop in revenues, forces states to re-consider the wisdom of the plan. The newly-hatched program cannot survive without an infusion of revenue.

If taxpayers are unwilling to pay up, governors and legislators will have to go to Uncle Sam, pleading for help. Maybe he doesn't listen to working constituents who are uninsured. But this year, with regime change in Washington, he may listen to governors. On the health care front, the year 2007 offers hope.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

From The Progressive Populist, February 1, 2007

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