Insurance certificate bill aims to expand coverage

The measure would devote $50 billion to the certificates and to states for high-risk insurance pools.

By Joel B. Finkelstein, amednews staff. Aug. 11, 2003.

Washington -- Proposed health insurance certificates would give low-income families new means to purchase coverage, but some lawmakers worry that consumers would not get much for their money.

The value of the certificates would vary depending on income. They could be worth as much as $1,000 to individuals making less than $13,000 a year and $2,750 for families making less than $25,000 a year. Their value could not exceed 70% of insurance premiums.

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Individuals making more than $18,000 and families earning more than $34,000 would be ineligible. Smaller subsidies would be available to those with the option of buying employer-sponsored coverage.

"I make no claim that this bill is a perfect or comprehensive solution," said its sponsor, Rep. Mike Bilirakis (R, Fla.). He acknowledged that the proposed funding is not enough to help everyone without insurance. But he said the measure is a sign that Congress cares about the problem and is working on it.

The bill would devote $50 billion over 10 years to a combination of health insurance certificates and incentives to the states to establish or expand high-risk insurance pools.

The National Assn. of Manufacturers supports the legislation, which would provide up to $400 for an individual and $1,100 for families to subsidize a worker's share of employer-sponsored coverage.

"About 18% of non-elderly Americans are without any kind of health coverage, and affordability is among the highest hurdles," said Neil Trautwein, the group's director of employment policy. He added that the bill targets a "significant and well-deserving segment of the uninsured."

Who will benefit most?

Some experts speaking at a recent hearing on the bill, however, argued that the certificates would miss the target.

"A larger share of the benefits of the health certificate subsidy would go to provide people who are already insured with financial assistance," testified Robert Greenstein, executive director of the Center on Budget and Policy Priorities in Washington, D.C. He cited an analysis showing that these individuals would account for about 90% of those expected to get certificates.

To be eligible, individuals need to make less than $18,000; families less than $34,000.

"The proposal is unlikely to help reduce the ranks of the uninsured by an amount commensurate with the expenditure of $50 billion," he said.

With that size investment, the certificates would reach 1.28 million Americans who did not already have insurance, said Rep. John D. Dingell (D, Mich.). That means it would cost an estimated $39,000 to extend health insurance coverage to each new person.

"I worry that this approach does not get the most bang for the buck," Dingell said. "In other words, it does not cover many uninsured for the amount it spends."

Dingell and others also worried that, like previous tax proposals, the size of the certificates would not be enough to buy adequate health insurance in the current market.

John C. Nelson, MD, president-elect of the American Medical Association, said the AMA supports the principle of insurance certificates as long as they are adequate. "The certificates must be at least sufficient to cover a substantial portion of the premium costs for individuals in the low-income range," he said.

Representatives of labor organizations also worry that health insurance certificates would undermine the current system of employer-based coverage.

The certificates have the potential to entice younger, healthier workers into the individual market, where they can buy cheaper, less comprehensive coverage and pocket the difference between that coverage and what they would have paid toward employer-sponsored insurance, said Gerald M. Shea, assistant to the president for government affairs of the AFL-CIO. This would segment employers' insurance risk pools, he argued.

"The employer's cost will rise, driving up premiums and further threatening affordability for the employer and the workers who must contribute to the cost of their coverage," he said. "After several years of double-digit premium increases and more predicted for next year, embarking on such a policy is, in our view, shortsighted and unwise."

ADDITIONAL INFORMATION:

Weblink

Thomas, the federal legislative information service, for bill summary, status and full text of the Health Insurance Certificate Act of 2003 (HR 2698) (thomas.loc.gov)

Testimony from the July 17 House Energy and Commerce health subcommittee hearing on the Health Insurance Certificate Act of 2003 (energycommerce.house.gov/108/hearings/07172003hearing1015/hearing.htm)