Affordability is Key for Health Reform – Say Ahhh! A Children’s Health Policy Blog

By Sara Gagn?-Holmes, Executive Director of Maine Equal Justice Partners

mej_banner2009.jpgIn drafting a national plan, Washington should follow Maine’s lead.
In the health care debate, most agree that costs will not be controlled until everyone is covered and able to access the right care, including preventive care and management of chronic illnesses, at the right time and in the right health care setting.  Otherwise, costs for expensive emergency and catastrophic care for the uninsured and under-insured will continue to be passed to those who are paying private health insurance premiums.

Affordability is the key to providing everyone coverage. Health reform must include guaranteed Medicaid (known as MaineCare in Maine) coverage for more low-income households and robust subsidies for moderate-income households so they can purchase insurance.

Maine has been successful in preventing high rates of uninsurance among low-income families with minor children by providing MaineCare to those with income below 200 percent of the federal poverty level ($36,620 for a family of three). Medicaid is the most efficient way of providing coverage to all low-income people. The infrastructure is in place; it costs less than private insurance and it provides for the unique needs of people with disabilities, children and the elderly, who tend to be disproportionately represented among low-income populations.

National health reform should follow Maine’s lead. It should extend Medicaid to all low-income people with income below 150 percent of the poverty level and should give states, such as Maine, the option to continue to serve people up to 200 percent of the poverty level so as to assure their care is not disrupted. In financing this coverage, there must be equitable distribution of funds among the states. States like Maine, which have already taken these steps, should not be disadvantaged as the nation looks toward helping lagging states extend their coverage.

Moderate-income people who are ineligible for Medicaid need affordable options for comprehensive health care too. Families are currently at the breaking point when it comes to purchasing coverage — unable to afford the premiums and out-of-pocket costs for care. Today’s average employer-based insurance coverage would cost a family of three that earns $55,000 a year, if they could purchase this same plan on the individual market, approximately 23 percent of their income. Coupled with the costs of other basic household necessities, such as food, housing, heat, transportation and childcare, this expense is utterly unaffordable.

Subsidies tied to income that assist families in purchasing health coverage in the insurance market are essential. Affordability also means that people with low to moderate incomes are protected from high cost-sharing, such as deductibles and co-payments. Finally, health reform must ensure access to comprehensive benefits so that people don’t go without the care they need. Health coverage is not affordable to low or moderate income households if they find themselves with $10,000 of debt because of deductibles, co-payments, or the costs of uncovered care.

What is affordable? This depends on household income. Those with low-income have trouble affording seemingly modest health care costs because all their income is already going toward other basic necessities. When Oregon, Maryland, Vermont and Rhode Island imposed modest premium increases for low-income groups, considerable numbers dropped coverage.

A study by the Center for Studying Health System Change found that about one-third of U.S. families with income below 200 percent of the poverty level had trouble paying their medical bills, even when those bills amounted to less than 2.5 percent of their income. Further, for those with income between 200 percent and 400 percent of the poverty level, 20 percent of those with insurance still had trouble paying their medical bills.

Maine’s Sen. Olympia Snowe is a key player in making decisions about national health care reform as a member of the Senate Finance Committee. In the past, as she has worked on Medicaid and children’s health insurance issues, she has demonstrated a true understanding of the needs of ordinary people who are working hard and struggling just to get by. Now, at this critical crossroads in health reform, this experience and her skills at navigating complex issues and building consensus for what is best for Maine people and the nation is more important than ever.

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