July 1998

Grant Results

SUMMARY

During 1995 and 1996, four health policy organizations produced policy options for providing health insurance coverage for all children. The organizations included:

Recommendations were presented and debated in two forums in 1996: a seminar at the Robert Wood Johnson Foundation (RWJF) in and a conference sponsored by Boston University's School of Public Health.

Key Results

  • George Washington University: Its report focused on the immediate need for a practical solution to the child health care crisis, which meant trying to be consistent with the direction in which government policy-makers seemed to be moving and in keeping with the public's expectations.
  • Hudson Institute: Its report recommended the consideration of three short-run options and one long-run option:
    • Short-run option 1: Convert Medicaid into low-income health assistance (with the exception of long-term care) for all low-income families.
    • Short-run option 2: Inform the newly unemployed of their right, under COBRA, to continue their old coverage temporarily.
    • Short-run option 3: Allow recipients of the earned income tax credit to purchase health insurance coverage for children by having insurers accept an earned income tax credit as payment.
    • Long-run option: Health care measures which are "unthinkable" now may become quite "thinkable" in 15 years as the first Baby Boomers begin to retire and Medicare comes under ever more crushing financial strain.
  • University of Kansas: Its report proposed one comprehensive program, recommending the establishment of a national network of community child health and wellness partnerships comprised of neighborhood clinics, youth groups and clubs, public schools, churches and other nonprofits, and neighborhood organizations.
  • McManus Health Policy presented three options:
    • Option 1: Most children would continue to receive health insurance through policies provided by their parents' employers, and children receiving Medicaid would retain entitlement status, but Medicaid funds would be used to purchase private health insurance from "mainstream" providers.
    • Option 2: Most children would continue to receive health insurance through policies provided by their parents' employers, with Congress granting new tax incentives to corporations to encourage more of them to offer dependent coverage for children at reasonable rates.
    • Option 3: Congress would create a national children's health care trust fund overseen by an independent commission.
  • At the conclusion of the projects, the principal investigators came together in a seminar at RWJF's headquarters in Princeton, N.J., to present their conclusions and recommendations to foundation staff members and others concerned with children's health issues.

    The seminar underscored the urgent need to alert policymakers to the rapid decline underway in children's health care coverage.
  • A one-day conference, "Policy Options to Provide Children with Universal Health Insurance Coverage," took place in Washington on July 11, 1996. Some 56 representatives from child advocacy groups, think tanks, business groups, professional associations and the media attended.

    Sponsored by the Boston University School of Public Health, the conference covered the primary reasons children do not have health insurance coverage, reasons why coverage is an urgent issue, and areas of consensus for possible next steps.

Funding
RWJF supported this project through five grants totaling $222,501, to the following organizations:

  • George Washington University ($48,116)
  • Hudson Institute ($41,095)
  • University of Kansas ($46,860)
  • McManus Health Policy ($50,000)
  • Boston University School of Public Health ($36,430)

 See Grant Detail & Contact Information
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THE PROBLEM

At the time the first four grants were made, Congress had failed to enact broad-based health care reforms and there was little chance of government action to provide universal and comprehensive coverage for all Americans in the foreseeable future. However, the proportion of children who lacked coverage for medical care was continuing to grow. In addition, a number of conditions created an urgency for developing various policy options for health care coverage for all children:

  • The primary source of insurance coverage for children ages 0–18, employer based family coverage, was shrinking rapidly and seemed likely to continue to decline.
  • The rapid increase in Medicaid coverage for children occurring since 1990 had come to an end.
  • The principal reason children lacked coverage was the cost.
  • New money would be needed to provide health insurance coverage for all children but there was no political consensus on how to raise those funds.
  • Neither the general public nor policymakers understood that the existing system of providing health insurance coverage to children was weakening.

While comprehensive coverage for all Americans was not an option, the Foundation sought to explore, through the first four grants, the opportunities that might be created to extend such coverage to at least one group of Americans, the nation's children, and then, through the fifth grant, to convene the grantees and other interested parties to discuss these options.

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THE PROJECT

The first four grantees were requested to develop at least three policy options each for providing health insurance coverage to all children, including details on how the programs would be managed and financed, what benefits would be offered, and an assessment of the potential limitations of each approach and how these limitations might be overcome. The grantees were selected to reflect diverse perspectives. They were purposefully given wide latitude, and not all provided three options.

At the conclusion of the projects, the principal investigators were brought together in a seminar at the Foundation's headquarters in Princeton, N.J., to present their conclusions and recommendations to Foundation staff members and others concerned with children's health issues. The seminar underscored the urgent need to alert policymakers to the rapid decline underway in children's health care coverage.

The Foundation subsequently created a fifth grant, to Boston University's School of Public Health, for a public conference in Washington, D.C., in July 1996, to present these policy options to a wider audience and produce an executive summary of the four reports for distribution at the conference.

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RESULTS

George Washington University (ID# 028477). Its report focused on the immediate need for a practical solution to the child health care crisis, which meant trying to be consistent with the direction in which government policymakers seemed to be moving and in keeping with the public's expectations. The report made the case for, in the short run, shoring up and strengthening the traditional system of employer-based insurance, which, though in decline, still provided coverage for more than 60 percent of children.

To make the system universal, prospective and refundable individual subsidies would be made available to families of full-time and part-time workers to purchase insurance. Subsidies covering children in unemployed families would be established through federal grants to states for the development of insurance purchasing pools. Medicaid would be retained for coverage of children's chronic and long-term care needs.

Hudson Institute, Inc. (ID# 028478). Its report recommended the consideration of three short-run options and one long-run option:

  • Short-run option 1. Convert Medicaid into low-income health assistance (with the exception of long-term care) for all low-income families. The states would buy catastrophic insurance, and the remainder of funds available for health assistance would be deposited in medical savings accounts (MSAs) for each participant. Recipients who become employed in jobs with health insurance would have the choice of their employer's insurance or the MSA. If they chose the MSA, the employer should be required to make a contribution to the state's low-income medical assistance fund.
  • Short-run option 2. Many unemployed individuals who had health coverage through their former employer go without insurance for their first year out of work because they are unaware of their legal right, under COBRA, to continue their old coverage temporarily by paying 102 percent of the prior premium. A simple and cheap strategy to increase health insurance for children would be to support programs to inform the newly unemployed of this right.
  • Short-run option 3. Allow recipients of the earned income tax credit (EITC) to purchase health insurance coverage for children by having insurers accept an EITC as payment.
  • Long-run option. Health care measures which are "unthinkable" now may become quite "thinkable" in 15 years as the first Baby Boomers begin to retire and Medicare comes under ever more crushing financial strain. One approach is to make employer-provided health insurance taxable to the recipients. Repeal of the present tax exclusion for employer-provided health insurance would make available sufficient resources to put at least high-deductible insurance within reach of almost all families. The government would provide tax credits to enable individuals to purchase this coverage.

University of Kansas (ID# 028479). Its report proposed one comprehensive program, recommending the establishment of a national network of community child health and wellness partnerships comprised of neighborhood clinics, youth groups and clubs, public schools, churches and other nonprofits, and neighborhood organizations. Boards of directors representing key stakeholders in the partnerships would define needs and carry out programs. At the regional level, local child health and wellness consortia serving 5 to 10 community partnerships would develop regional goals, and act as a single payer for health care services rendered at the local level. A National Child Health and Wellness Board would oversee the planning, financing, and evaluation of the entire network. Members of the national board would be nominated by the President and confirmed by the Senate. Costs of the network would be paid for through a trust financed by funds presently spent in such areas as child Medicaid, maternal and child health care, and nutrition. Additional funds might come from increased individual or corporate income taxes, a value-added tax, or a payroll tax. The report favored a new federal payroll tax since this is a familiar kind of tax and is relatively easy to administer.

McManus Health Policy, Inc. (ID# 028480). Three options were presented:

  • Option 1. Most children would continue to receive health insurance through policies provided by their parents' employers. Children receiving Medicaid would retain entitlement status, but Medicaid funds would be used to purchase private health insurance from "mainstream" providers. Families with children not receiving coverage through employers or Medicaid would be eligible to purchase private health insurance through a new premium subsidy program to be implemented by the states. Health insurance purchasing cooperatives would be established in each state to ensure access and encourage competition among health plans and particularly those serving Medicaid recipients and small businesses.
  • Option 2. Most children would continue to receive health insurance through policies provided by their parents' employers. Congress would grant new tax incentives to corporations to encourage more of them to offer dependent coverage for children at reasonable rates. Medicaid would retain responsibility for covering its currently eligible groups of children but would also make the same coverage available to uninsured children at an income-adjusted premium rate. A new public "wraparound" health insurance plan would be created for specialized services such as physical therapy, substance abuse treatment, and hospice care. All children in the United States would be in this plan. Partial financing of this option would be provided from funds presently allocated to various public programs serving children. Other revenue sources might include a special excise tax on tobacco and alcoholic beverages, a tax on pharmaceutical sales, or a small payroll tax.
  • Option 3. Congress would create a national children's health care trust fund overseen by an independent commission. This fund would replace all present forms of health insurance and publicly funded health programs for children, such as Medicaid. The trust would be supported by payroll taxes, the federal and state shares of Medicaid, other publicly funded health program moneys spent on children, and private contributions. Health care services would be administered through newly created local children's healthy development agencies.

Boston University School of Public Health (ID# 029728). A one-day conference, "Policy Options to Provide Children with Universal Health Insurance Coverage," was held in Washington, D.C., on July 11, 1996. About 56 representatives from child advocacy groups, think tanks, business groups, professional associations, and the media attended. Among the groups at the conference were: National Association of Children's Hospitals & Related Institutions, Heritage Foundation, National Governor's Association, and Center on Budget and Public Policy Priorities. The agenda covered the primary reasons children do not have health insurance coverage, reasons why coverage is an urgent issue, and areas of consensus for possible next steps. Each of the four grantees presented the recommendations contained in their policy papers.

Communications

The primary means of dissemination was through the seminar held at the Foundation in March 1996 and the conference held in Washington, D.C. in July 1996 (ID# 029728). A communications project grant (ID# 029743) covered the expenses of publication and dissemination of 250 copies of a conference report, "Providing Universal Health Insurance Coverage to Children: Four Perspectives," which combined the reports from the four projects. Representatives from 14 media outlets attended the July 1996 conference.

Two articles appeared in Medicine and Health and stories were reported in Health News Daily, Reuters Health, and The Atlanta Journal/Constitution. CBS Radio News Service interviewed David Rosenbloom, who chaired the Washington conference and also wrote the executive summary of the reports. Copies of materials from the Washington conference also were distributed at a forum on the same topic conducted by The Alliance for Health Reform in August 1996.

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AFTER THE GRANT

RWJF funded the Hudson Institute to produce a book, based on their work under ID#028478, on what the nation's health care system will look like in the year 2020 (ID# 032127). Staff of the University of Kansas project have consulted with the Governor's Advisory Committee on Child Development Programs in California, which has been working on developing community-based comprehensive services for children.

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GRANT DETAILS & CONTACT INFORMATION

Project

Developing Policy Options for Providing Health Insurance Coverage to Every Child

Grantee

George Washington University Center for Health Policy Research (Washington,  DC)

  • Development of Policy Options to Ensure the Health Insurance Coverage of All Children
    Amount: $ 48,116
    Dates: December 1995 to May 1996
    ID#:  028477

Contact

Sara Rosenbaum, J.D.
(202) 296-6922
ihosxra@gwumc.edu

Grantee

Hudson Institute, Inc. (Indianapolis,  IN)

  • Development of Policy Options to Ensure the Health Insurance Coverage of All Children
    Amount: $ 41,095
    Dates: December 1995 to October 1996
    ID#:  028478

Contact

William Styring III, Ph.D.
(202) 686-4797
bills@hudson.org

Grantee

University of Kansas Institute for Life Span Studies (Lawrence ,  KS)

  • Development of Policy Options to Ensure the Health Insurance Coverage of All Children
    Amount: $ 46,860
    Dates: December 1995 to May 1996
    ID#:  028479

Contact

Martin H. Gerry, J.D.
(913) 864-0572
mgerry@dole.lsi.ukans.edu

Grantee

McManus Health Policy, Inc. (Chevy Chase,  MD)

  • Development of Policy Options to Ensure the Health Insurance Coverage of All Children
    Amount: $ 50,000
    Dates: December 1995 to April 1996
    ID#:  028480

Contact

Margaret A. McManus, M.H.S.
(202) 223-1500

Grantee

Boston University School of Public Health (Boston,  MA)

  • Conference on Policy Options for Providing Children with Universal Health Insurance Coverage
    Amount: $ 36,430
    Dates: June 1996 to August 1996
    ID#:  029728

Contact

David L. Rosenbloom, Ph.D.
(617) 437-1500
david@jointogether.org

Web Site

http://www.gwumc.edu/sphhs/healthpolicy/chsrp
http://www.hudson.org
http://www.lsi.ku.edu/lsi
http://www.jointogether.org

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Publications

Styring W. Paying for Health Care: The Impending Earthquake. Hudson Briefing Paper No. 197. Indianapolis: Hudson Institute, Inc. 1996.

Styring W, Bush A and Kuttner H. Health Care for Children: Expanding the Options by Looking to the Future. Indianapolis: Hudson Institute, 1996.

Providing Universal Health Insurance Coverage to Children: Four Perspectives. Princeton: The Robert Wood Johnson Foundation, 1996.

Sponsored Conferences

"Policy Options to Provide Children with Universal Health Insurance Coverage," July 11, 1996, Washington, D.C. Attended by about 56 representatives from child advocacy groups, think tanks, business groups, professional associations and the media. Organizations attending included the Heritage Foundation, Washington Business Group on Health, Employee Benefits Research Institute, American Academy of Pediatrics, Congressional Budget Office, and Center on Budget and Public Policy Priorities.

Four presentations: Peggy McManus, McManus Health Policy; Inc.; Sara Rosenbaum, George Washington University Center for Health Policy Research; Martin Gerry, University of Kansas; and William Styring III, Hudson Institute, Inc.

Print Coverage

"Alarm Over Drop in Coverage for Kids," in Medicine & Health, July 15, 1996.

"Perspectives: Kids' Coverage Crisis: Next Target for 'Consensus' Reform?" in Medicine & Health, July 29, 1996.

"Uninsured Children No Minor Issue," in The Atlanta Journal/The Atlanta Constitution, Sept. 30, 1996.

"CBS News Service," interview with David Rosenbloom for drive-time show, July 12, 1996.

"How To Wean the Poor from Medicaid." in Wall Street Journal, October 2, 1996.

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Report prepared by: Dexter Hutchins
Reviewed by: Timothy F. Murray
Reviewed by: Molly McKaughan
Program Officer: Marie P. Lyons (ID# 028480)
Program Officer: Paul S. Jellinek (ID#s 028477, 028478, 028479 and 029728)

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