HISTORY

Throughout the year, the primary focus in Congress on the uninsured issue was related to passage of the State Children’s Health Insurance Program (SCHIP).  No agreement was reached and so a continuation of the current program, to include funding for states that were projected to experience a shortfall, was passed in December and signed into law by President Bush on December 30, 2007. The law extends the program at current enrollment levels, approximately 6.6 million people, until March 31, 2009. 

Several bills had been passed but did not become law prior to this latest extension. In late September, the House and Senate passed the “Children's Health Insurance Program Reauthorization Act of 2007” (H.R. 976). The president vetoed this legislation in October, citing tax and financial concerns, and the House did not have the votes necessary (2/3) to override his objection.  The House and Senate considered a slightly revised bill in late October, but again did not garner the necessary votes to override a veto. Congressional leaders delayed sending that bill to the president for another promised veto, hoping instead to strike a deal to attract enough support in the House to override presidential objections. While a small group of Republican House members negotiated with the Democratic leadership, prospects for an agreement were slim as Republican priorities in areas such as citizenship requirements threatened the Democratic support for the bill. When it became clear that no compromise would be found, the bill was sent to the president in December at which point he vetoed it. All the proposed packages included improvements in premium assistance, giving states more flexibility to use SCHIP funds to purchase private insurance, something for which HLC aggressively advocated.

Debate around reauthorization of SCHIP has focused on several key areas:

• Whether any adults, particularly childless adults, should be covered under this program. About one-half million adults are currently covered through SCHIP;
• Whether the program should be limited to children in low-income families (200 percent Federal Poverty Level and below, or less than $41,300 for family of four) or expanded so that more children have access (400 percent FPL, $82,600 for family of four, and would be eligible up to age 24); and
• Whether illegal immigrant children and pregnant women should be covered; and what documentation should be required to enroll in the program.
• How the bill would be funded.  Several groups, including the administration, opposed the proposed tobacco tax increase to fund the bill.
   

On the regulatory front, in August 2007, the Centers for Medicare and Medicaid Services (CMS) issued new standards to refocus the SCHIP program on coverage for children in low-income families.  If states wish to provide SCHIP coverage to children in families above 250 percent of FPL, they must have enrolled at least 95 percent of eligible children in the state below 200 percent of the federal poverty level, adopted five strategies to avoid having people drop private coverage in favor of SCHIP (known as “crowd out”), established a minimum one-year waiting period of uninsurance, ensured that the number of SCHIP-eligible children in private plans has not decreased by more than 2 percent over the previous five years, and must be up-to-date with all paperwork related to crowd-out issues.  If states received a waiver from CMS in the past to cover children over 250 percent of FPL, they have 12 months to change those policies and comply with the new standards.  Several states filed legal action in opposition to these new rules.

The Trade Adjustment Assistance Act (TAA) Health Coverage Tax Credit (HCTC) for trade displaced workers was also set to expire on September 30, 2007.  This precedent-setting law provides over 200,000 trade-related unemployed workers and their dependents – as well as some Pension Benefit Guaranty Corporation (PBGC) retirees – a 65 percent tax credit to help purchase health insurance. In late September, Congress passed H.R. 3375, a three-month funding extension for TAA. The House passed another three-month funding extension and funds were included in the “Consolidated Appropriations Act, 2008,” (P.L. 110-161), or omnibus spending bill. However, the Senate failed to act on the reauthorization legislation over an unrelated provision. The U.S. Labor Department has indicated that the TAA program will continue uninterrupted with funds from the omnibus appropriations bill.

Thirty-five states currently have high-risk pools to assist individuals who cannot obtain insurance elsewhere because of illness.  These funds can be used by states to start a high-risk pool or support current operations, which includes in many cases premium subsidies to low-income individuals.  With House Appropriations Chairman David Obey (D-WI) continuing to champion high-risk pool funding, $49 million for such pools was included in the “Consolidated Appropriations Act, 2008,” that passed the House and Senate and was signed into law on December 26, 2007.

In FY 2008, the president departed from previous health coverage proposals by recommending that health insurance premiums become taxable above $15,000 for families and $7,500 for individuals.  The president's proposal would have allowed anyone purchasing insurance to take a standard deduction regardless of the amount actually spent and whether paid for by an individual or his employer. Heralded as a way to level the playing field for individuals without access to employer-sponsored coverage, it was also criticized as harming sick individuals whose premiums exceed the standard deduction. However, there was little congressional support for the plan, and no action was taken.

Indications of interest and concern on the uninsured issue are apparent in the number of bills introduced in Congress.  For example, the “Healthy Americans Act” (S. 334), introduced by Sen. Ron Wyden (D-OR), has garnered bipartisan support with 11 cosponsors, including six Republicans. The legislation eliminates Medicaid, SCHIP, and Disproportionate Share (DSH) payments, includes an individual mandate, an employer mandate, a state connector-type model, and premium subsidies on a sliding scale up to 400 percent of the federal poverty level.

Finance Chairman Max Baucus (D-MT) has expressed a desire to address affordability and access concerns in the small group and individual health insurance market, particularly for small business owners, in 2008.

Past congressional actions on the uninsured include some in the waning days of the 109th Congress.  Late in 2006, the House and Senate passed several important improvements to health savings accounts (HSAs), which allow employers or employees to set aside pretax income to pay for medical expenses.  HSAs, created as a part of the Medicare Modernization Act, began in 2004.  Improvements to HSAs included: allowing rollovers from Flexible Spending Accounts and Health Reimbursement Accounts into HSAs as well as a one-time rollover from IRAs to HSAs; repeal of the annual plan deductible limitation on HSA contributions; earlier calculation of cost-of-living adjustments; adjustment to the contribution limitations for midyear enrollment and for nonhighly compensated employees; and other changes.

Action also occurred on H.R. 3204, the “State High Risk Pool Funding Extension Act of 2005,” sponsored by Rep. John Shadegg (R-AZ). This bill provides funds to states to create and operate high-risk pools that offer insurance to individuals with serious medical conditions who would otherwise be uninsurable.  The legislation passed the House by a voice vote on July 27, 2005.  The Senate Health, Education, Labor and Pensions Committee reported similar legislation, S. 288, the “State High Risk Pool Funding Extension Act of 2005,” in February.  A bipartisan House-Senate agreement was forged and $90 million for high-risk pools was authorized in the Deficit Reduction Act early in 2006. However, funding for the high-risk pools was not included in FY 2007 legislation.

In addition, the House passed H.R. 525, the “Small Business Health Fairness Act,” sponsored by Rep. Sam Johnson (R-TX), in July 2005.  The legislation establishes Association Health Plans (AHPs), which allow small businesses to join together to buy health insurance. Thirty-six Democrats joined with Republicans to pass the bill by a vote of 263-165.  Due to longstanding Senate opposition, the AHP bill saw no action in the Senate. 

However, S. 1955, the “Health Insurance Marketplace Modernization and Affordability Act of 2005,” sponsored by Senator Mike Enzi (R-WY), which would allow small business associations to purchase fully insured health coverage that is not subject to state benefit mandates, was acted on by the Senate during the 109th Congress.  The Senate HELP Committee reported a modified bill along party lines, but concerns over exceptions to state mandates caused patient groups, the AARP, and many state insurance commissioners to launch an aggressive campaign against the bill. In May, the Senate defeated the legislation 55 to 43.  Action during the 110th Congress on either S. 1955 or H.R. 525 is unlikely given the opposition to both bills by Democratic leadership.  

In the absence of comprehensive federal action, states and localities continue their efforts to assist the uninsured population. In July, the city of San Francisco proposed providing health care to all uninsured residents through city clinics.  While not a health insurance plan, the proposal included a “play or pay” provision that would require employers to provide health insurance or pay into a fund for the program.  Employers challenged this provision in court, and the case continues in litigation. 

In Massachusetts, implementation of its plan to insure all residents continues.  Nearly 300,000 previously uninsured residents were enrolled by December 2007.  The majority of these individuals were eligible for some form of subsidized health insurance.  Due to a discrepancy in numbers regarding the total number of uninsured residents prior to the implementation of the law, it is not certain how many residents still lack insurance.  At least 100,000 are likely to still be without insurance and will have to pay a penalty of anywhere between $210 and $912 in 2008.

Since some state health reform laws, such as the "play or pay" legislation in Maryland and San Franscisco, have been challenged as violating the federal Employee Retirement Income Security Act (ERISA) law, the House Education and Labor Committee held a hearing in 2007 to discuss modifications to ERISA to assist state reform efforts.  Business responded to this prospect by launching the Coalition on Benefits, a group of employers and associations that will work to convince Congress that employer-provided health benefits, made possible through ERISA's exemption from state insurance regulations for multi state employers, are an essential component of the current system that should not be undermined in any reform initiatives.

While congressional and state efforts are ongoing, many nongovernmental entities are developing proposals to assist the uninsured.  In 2004, HLC and other leaders of 24 disparate groups representing the health care industry, corporations and unions, and conservative and liberal groups formed the Health Coverage Coalition for the Uninsured (HCCU) consensus-building project to reach agreement on how to extend coverage to the more than 46 million Americans who do not have it.  Legislation based on the historic HCCU proposal was introduced in Congress by Rep. Rahm Emanual (D-IL). 

In response to the significant interest in Congress in leveling the playing field for individuals who do not have access to employer-sponsored insurance, America's Health Insurance Plans (AHIP) issued a proposal in December to address individual insurance market reform.  It recommended guaranteed issue with premiums capped at 150 percent of the standard rate for individuals unable to obtain coverage due to a medical condition, limiting exclusions for pre-existing conditions, restricting rescission actions, and establishing a new third-party review process for pre-existing conditions and rescission decisions.  The proposal also outlines five steps for states to obtain universal participation that include developing an insurance coverage verification system; enforcing the requirement to purchase and maintain coverage; establishing an automatic enrollment process; providing premium subsidies for moderate- and low-income individuals and families; and securing funding for the coverage initiatives from a broad base of sources.

HLC initiated the Health Access America campaign to put the uninsured issue at the top of the policy agenda and to make sure proposals are balanced and workable.  In 2007, HLC continued to expand the Health Access America partnership, which numbers 542 formal national and local partners, to educate and inform the uninsured about affordable health care options. The Health Access America campaign worked in seven primary cities and six secondary cities to educate the uninsured and their families, and to help them enroll in insurance, as appropriate. The campaign held 1,125 enrollment events and enrolled over 16,405 people, about half of all attendees.

THE FUTURE

Health reform is shaping up as a key issue in the presidential campaigns.  Nearly all of the presidential candidates released health reform proposals and continue to discuss the issue on the campaign trail.  In addition, many groups are expending sizable resources to influence the outcome of the presidential elections. For example, the AFL-CIO has launched a campaign to recruit 1 million people by February who will advocate for the candidate who supports its vision of health reform, which is reflected in the “United States National Health Insurance Act” (H.R. 676) sponsored by Representative John Conyers (D-MI). This bill would create a single payer Medicare-type insurance system for all Americans.

With continued focus on the rising number of uninsured, action on this issue is likely in 2008.  Whether congressional action will be limited to the reauthorization and potential expansion of the SCHIP program (now expiring in March 2009) or will include other Americans without insurance remains to be seen.  Assuredly, however, states will continue to address the issue of the uninsured.  Growing state Medicaid expenditures demand continued attention and action.  And, House Health, Employment, Labor and Pensions Subcommittee Chairman Rep. Rob Andrews (D-NJ) is rumored to be bringing forward legislation to waive ERISA's pre-emption of state laws in state efforts to assist the uninsured.

Growing health care costs made the issue of health costs and the uninsured an important one in the 2006 elections. The popularity of this message ensures both Democratic and Republican attention to the issue throughout the 2008 congressional session and in the coming elections.