Learn the Issues: Public Programs
What are public health insurance programs?
Public programs — such as Medicare, Medicaid and Child Health Plan Plus — target people who are unlikely to have health insurance from employers, such as retirees and people with low incomes or who are disabled. While employers typically pay 75-80 percent of the total premium to cover employees and their dependents, public health insurance programs are paid for (in whole or in part) by the government.
How can they affect the business community?
Funding for public health and human service programs comprises a large share of the state budget – about 29 percent. As taxpayers, businesses have a financial interest in public programs that are high-quality and efficient. Employers also face indirect costs (sometimes called “cost shifting”) when government reimbursements to medical care givers don’t cover the full cost of providing care and eligibility criteria create more uninsured.
Almost one in five Coloradoans receives health insurance through a public program, such as Medicare, Medicaid, or the Children’s Health Plan Plus (CHP+), including:
• Low-income children.
• Low-income pregnant women. Medicaid and CHP+ pay for 1 of 3 Colorado births.
• Very poor parents. A single parent with one child must make less than $8400 a year to quality for adult Medicaid.
• Certain people with disabilities.
• People over the age of 65.
Public programs include benefits that might be found in a typical employer benefit package. But the elderly, poor, and disabled individuals also receive benefits tailored to their special needs, such as: transportation for people without cars, home health services that enable people with disabilities to live at home, and nursing home services.
However, public programs do NOT cover all low-income persons, specifically:
• Parents who earn more than $8400 a year (for a single parent with one child).
• Non-disabled adults without children, regardless of income.
As a result, a majority of uninsured Coloradoans are low-income workers who struggle to afford coverage because they:
• do not have insurance through their employer,
• do not qualify for public programs, and
• cannot afford to cover themselves or to buy family coverage.
Like the private sector, public programs face escalating costs and quality problems. Health and human service programs are now the second-largest state budget item, and their continued growth means less money available for projects also important to the business community, including transportation and higher education. In recent years, state spending restrictions have required Medicaid to tighten eligibility rules, cut benefits, and pay doctors and hospitals less than their costs. However, the Denver Metro Chamber of Commerce and others have criticized these cost-cutting measures for making access problems worse (Colorado is 48th in the nation for children’s health access) and shifting costs to businesses (an estimated $934 of a family premium subsidizes care for the uninsured and public program participants).
Recent developments
The addition of prescription drug coverage for retirees on Medicare represents one of the biggest changes to public programs in recent years. Many employers have responded to the passage of Medicare Part D (prescription drug coverage) by reducing or eliminating pharmacy benefits from retiree benefit packages.
Since 2000, fewer people with employer insurance, combined with an increase in Colorado’s poverty rate, have resulted in substantial enrollment increases in Medicaid and CHP+, especially for children. However, many newly uninsured adults do not qualify for public programs. To help stem the tide of the uninsured, the Blue Ribbon Commission for Health Care Reform recommended that Medicaid/CHP+ eligibility be expanded to include all people who earn less than a defined income level and do not have insurance from an employer.
However, the Commission also recommended making several changes to public programs to improve access and quality – such as greater use of managed care -- before adding large groups of new enrollees.
Governor Ritter and the Colorado legislature took the following steps during the 2008 session to strengthen public programs:
• Established a Center for Value in Health Care Purchasing
• Expanded eligibility for a projected 55,000 children (under CHP+)
• Simplified the application process and expanded outreach efforts
• Increased payments to physicians who treat Medicaid patients
• Expanded mental health and dental benefits
• Reduced the current waiting list for people with developmental disabilities
• Funded a study of a Medicaid buy-in program for people with disabilities who want to return to work
Resources
Medicaid Overview and Recommendations
Denver Metro Chamber of Commerce
Identifies priorities and provides recommendations to improve the Colorado Medicaid program.
Medicaid Primer
Kaiser Family Foundation
Provides an overview of the Medicaid program but is not specific to Colorado Medicaid. Good background information provided, beginning on page 2.
The Business Case for SCHIP
The Colorado Health Foundation
Outlines the Business Case for expanding SCHIP
Medicare Primer
Kaiser Family Foundation
Provides an overview of the Medicare program and the population it serves.