1999 Policy Studies

Health Insurance and Taxes: The Impact of Proposed Changes in Current Federal Policy – October 18, 1999
By John Sheils, Paul Hogan, and Randall Haught, The Lewin Group, Inc., October 1999.

This study reviews nine proposals for changing the taxation of health insurance benefits, four of which call for limiting or replacing the current exclusion of employer-paid premiums from employee income taxation. For each proposal, the authors estimate (1) prospects for insuring the uninsured and (2) net cost to the federal government in the year 2000. The authors conclude that most of the proposals would reduce the number of uninsured by only 1.5 to 9.8 million people. Of the proposals reviewed, only one has the potential to achieve universal coverage. A Heritage Foundation proposal that would replace the current tax exclusion of employer-sponsored coverage (and tax deduction for spending in excess of 7.5% of adjusted gross income) with:

• mandatory individual coverage
• a requirement that employers “cash out” their health insurance benefit, by increasing wages by the amount formerly spent on health insurance premiums
• refundable tax credits for all individuals (except Medicare and Medicaid enrollees) for insurance premiums and out-of-pocket health expenses
• a specified minimum benefits package.

The cost of implementing this proposal is estimated at $55.3 billion, or $1274 per newly insured person, in the year 2000.

Small Employer Health Insurance Purchasing Arrangements: Can They Expand Coverage? – May 10, 1999
By Elliot K. Wicks and Jack A. Meyer, New Directions for Policy, May 1999.

This study concludes that Health Marts and Association Health Plans would reduce health insurance premiums enough to encourage a limited number of small businesses to begin to offer health insurance to their employees. The effect on the uninsured population would be small: at the most, 10% to 20% of those now uninsured would obtain coverage. The study also addresses concerns about the proposed small employer purchasing arrangements — especially the possibility that these purchasing arrangements could benefit low-risk workers while excluding higher-risk workers.

Down a Dangerous Path: The Erosion of Health Insurance Coverage in the United States – May 5, 1999
By Steven Findlay and Joel Miller, National Coalition on Health Care, May 1999.

This report presents data prepared for the Coalition by Kenneth Thorpe, Director of the Institute for Health Services Research at Tulane University Medical Center (now at Emory University) . Drawing on this and other information, the authors of this report conclude that:

• despite the recent benefits of a strong economy, the number of Americans under age 65 without health insurance reached a new high of 43.1 million in 1997 (18.3 percent of the non-elderly population)
• the uninsured under age 65 are disproportionately minorities (46 percent of the uninsured), unemployed (18 percent of the uninsured), low-income (70 percent of the uninsured), young (18 to 24 year olds), or old (61 to 64 year olds)
• the number and proportion of workers without health insurance increased significantly from 1987 to 1997 – reaching 8.5 percent of public employees and 18.6 percent of private sector employees and their families uninsured workers tend to work in small businesses or serve as “contingent” workers (self-employed, contract workers, day-laborers, temporary or part-time workers) if past growth in the number of uninsured continues, an additional 1.1 million people will be added to the ranks of the uninsured each year in the event of an economic downturn and a period of sustained premium increases, this figure would increase to 1.6 to 1.8 million people per year.

Quality Health Care: New Challenges as Medicare Evolves Medicare Series Report #3 – February 1999
By By: John F. Sheils, Molly J. Coye, MD, Genny B. Jacks, Richard E. Dixon, MD, The Lewin Group, Inc., January 1999.

This report:

• reviews the evidence on the quality of health care delivered through Medicare HMO’s and fee-for-service arrangements
• outlines the prospects and challenges posed by quality measurement
• describes Medicare initiatives to monitor and improve quality
• identifies specific opportunities to improve the quality of care delivered though Medicare
• discusses Medicare reform proposals and the ways in which they may hinder the maintenance and improvement of quality in health care delivery.