Coverage for Low-Income People

Should the Medicaid program be expanded to cover more of the uninsured? Should there be changes in the Children’s Health Insurance Program?

Congress and stakeholder groups are discussing how to expand coverage for poor and low-income people, given the lack of affordable private health insurance options for these populations. These discussions have reignited debate about the merits of public versus private insurance and how to improve Medicaid and the Children’s Health Insurance Program (CHIP) while still controlling costs.

Supporters of Medicaid and CHIP say that they are more cost-effective compared to private insurance. Those who support Medicaid expansion say dollars spent on Medicaid stretch further than dollars spent on private coverage – for example, because Medicaid programs effectively get a discount on prescription drug costs and have lower overhead costs than commercial insurers. Similar arguments apply to expanding CHIP to more children.

Others say that there just isn’t the need to expand public coverage options at this point and express serious concerns about adding to the burdens facing federal and state governments for future costs of Medicare and Medicaid. Some say the federal government should not spend any more dollars on public insurance programs of any type and should instead use federal resources to subsidize the purchase of private health coverage.

This Health Policy Brief examines the options being debated by key congressional committees and summarizes arguments for and against expansion of these public programs, and was published online on July 23, 2009 in Health Affairs.