[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
IMPACT OF GAPS IN HEALTH COVERAGE
ON INCOME SECURITY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 14, 2007
__________
Serial No. 110-65
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan WALLY HERGER, California
JIM MCDERMOTT, Washington DAVE CAMP, Michigan
JOHN LEWIS, Georgia JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee JERRY WELLER, Illinois
XAVIER BECERRA, California KENNY C. HULSHOF, Missouri
LLOYD DOGGETT, Texas RON LEWIS, Kentucky
EARL POMEROY, North Dakota KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon DEVIN NUNES, California
RON KIND, Wisconsin PAT TIBERI, Ohio
BILL PASCRELL JR., New Jersey JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
Janice Mays, Chief Counsel and Staff Director
Brett Loper, Minority Staff Director
______
SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT
JIM MCDERMOTT, Washington, Chairman
FORTNEY PETE STARK, California JERRY WELLER, Illinois
ARTUR DAVIS, Alabama WALLY HERGER, California
JOHN LEWIS, Georgia DAVE CAMP, Michigan
MICHAEL R. MCNULTY, New York JON PORTER, Nevada
SHELLEY BERKLEY, Nevada PHIL ENGLISH, Pennsylvania
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
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C O N T E N T S
__________
Page
Advisory of November 7, 2007, announcing the hearing............. 2
WITNESSES
Sherena Johnson, former foster youth from Morrow, Georgia........ 60
Sara R. Collins, Ph.D., Assistant Vice President, Program on the
Future of Health Insurance, The Commonwealth Fund, New York, NY 79
Ron Pollack, Founding Executive Director, Families USA,
Washington, DC................................................. 114
Bruce Lesley, President, First Focus, Alexandria, VA............. 63
Brian J. Gottlob, Senior Fellow, Milton and Rose D. Friedman
Foundation, Indianapolis, IN................................... 158
SUBMISSIONS FOR THE RECORD
Business Coalition for Benefits Tax Equity, statement............ 192
Child Welfare League of America, Arlington, Virginia, statement.. 195
Human Rights Campaign, statement................................. 199
National Association of Disability Examiners, statement.......... 200
Zero to Three, Matthew Melmed, statement......................... 202
IMPACT OF GAPS IN HEALTH COVERAGE
ON INCOME SECURITY
----------
WEDNESDAY, NOVEMBER 14, 2007
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Income Security and Family Support,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m., in
room B-318, Rayburn House Office Building, Hon. Jim McDermott
(Chairman of the Subcommittee), presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
November 07, 2007
McDermott Announces Hearing on Impact of
Gaps in Health Coverage on Income Security
Congressman Jim McDermott (D-WA), Chairman of the Subcommittee on
Income Security and Family Support, today announced a hearing on the
impact of gaps in health coverage on income security. The hearing will
take place on Wednesday, November 14, 2007, at 10:00 a.m. in room B-318
Rayburn House Office Building.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Subcommittee and
for inclusion in the printed record of the hearing.
BACKGROUND:
The Census Bureau has found that, in 2006 (the most recent year in
which data is available) roughly 47 million people did not have health
insurance in this nation, an increase of nearly 2.2 million over the
previous year. After falling modestly in the late 1990s, the number of
people without health insurance has increased by approximately 8.6
million since 2000.
Research suggests that the combination of declining share of
employees being covered by employers and rising health costs have
placed more moderate- and middle-income families at risk of becoming
uninsured. Between 2000 and 2004, the share of non-elderly working-age
adults covered by employer-sponsored insurance declined by five
percentage points, from 66 percent to 61 percent, according to the
Kaiser Family Foundation. While government programs, such as Medicaid,
provide health coverage to certain low-income individuals, many other
low- and middle-income individuals and families do not have a health
safety-net available to them. As a result, many are completely without
health insurance or experience gaps in coverage.
Studies have found that those who are uninsured face difficulty
managing chronic conditions, are much less likely to get preventative
care, and experience an overall decline in their health. The uninsured
are three times more likely than those with coverage to cut back on
basic needs to pay for care and, among low-income uninsured parents,
are more likely to report a loss of time at work because of an illness.
The absence of health insurance and gaps in coverage undermine the
ability of these families to increase their overall economic well-
being.
In announcing the hearing, Chairman McDermott stated, ``We know
it's increasingly difficult for the middle class to obtain quality,
affordable health care. The Subcommittee will explore the growing
challenges facing the American people, especially the unemployed, the
disabled, and vulnerable youth. There is much we can learn by examining
the leadership role the federal government currently plays in the
provision of health care to find ways to fill the widening gaps in our
health care system.''
FOCUS OF THE HEARING:
The hearing will focus on how gaps in health care coverage affect
the income security of Americans.
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Chairman MCDERMOTT. The Subcommittee will come to order.
You want me to put my microphone on?
Mr. Herger is here and we will begin. Unfortunately, family
problems for Mr. Weller have kept him away today, so we will
start. The number of Americans that go without health insurance
is growing. We all know it. I am not giving you any big news
here. It is now up to 47 million who are without health
insurance. Presumably, these numbers are by the Census Bureau,
this reflects the people who are uninsured for an entire year.
It comes as no surprise that medical bills are also the leading
cause of bankruptcy.
People, when they get a big medical bill that tips them
over very often in this society, because everybody is so
stretched out financially anyway. We're involved because the
gaps in the provision of affordable health care impact
populations that concern this Subcommittee. I am really not
looking at the whole thing, but I am looking at this thing
because we have some very specific groups that are affected. I
will talk both about them and about the larger issue.
The disabled, the unemployed, the low and moderate-income
families, and youth who are aging out of foster care are groups
that are affected by this lack of health insurance.
A recent CBO report found that after becoming unemployed,
nearly 40 percent of workers lacked health insurance.
Applicants for SSI could wait as long as two and a half years
for a final determination by the Social Security Administration
that they qualify for SSI. What happens to them in that two and
a half years?
What do the disabled people do to obtain health care during
this period, how did they pay for it, and what impact does any
delay have on their mental status, and their health status and
long-term medical costs? Forty percent of uninsured Americans
with medical burdens are unable to pay for necessities such as
food, heat and rent.
How does the living standard of these families with these
challenges compare with families who receive TANF, food stamps
or housing assistance? When a foster child becomes 18, he or
she loses their entitlement to Medicaid.
How does an 18-year-old obtain health insurance in today's
economy, and what impact does that have on their long-term
health status? This spring, this Subcommittee learned about the
disproportionate number of homeless youth that were coming from
the child welfare system. We then passed a resolution declaring
November as National Homeless Youth Awareness month. But we
really need to do more to raise consciousness in this society.
Why should we make an 18-year-old choose between housing,
continuing education and health care? It really is an
unfortunate set of questions to be asking. The problems
confronting our health care system reach beyond this
Subcommittee's jurisdiction. There is a slide which shows
something I think we need to talk about.
Why does the Federal Government impose an income tax on
health benefits received by a domestic partner, is a question
for the full Committee. Another one concerns globalization. We
have a system where almost 65 percent of non-elderly
individuals obtained health insurance through employment, but
this Subcommittee learned in a March hearing that globalization
means that workers should expect to change jobs and careers
more often than in the past. Without health care reform, we can
expect globalization to translate into larger gaps in health
care and more vulnerable families.
As we consider ways to fill the gaps of our current health
care system, it is important to understand what we have today
and the role the government already plays in the purchase of
health care. We have heard recently around the debates on
``SCHIP'', the term ``if we do any more for children in this
country, we will somehow have socialized medicine'', as though
that were some kind of shibboleth that we couldn't deal with.
Now, I put that chart up for you. The government already
spends--50 percent of the dollars on health care come from the
Federal Government, when you talk about spending and the tax
breaks involved.
This vital role may impact the price and quality of health
care purchased privately. Most private insurance plans operate
off of what the government pays, some relationship to what is
paid by Medicare or Medicaid.
I thank today's witnesses for being with us and sharing
their knowledge. They bring a commitment to this issue that is
very important in the coming months. I know some of you from
the past, and I know where you have been and what you have been
doing. Some of you are new, but nevertheless you all have a
long-term stake in what happens in this issue. I expect this
issue will be the number one domestic issue in the 2009 session
of the U.S. Congress. I think we are going to have to do
something about it. Whether we get it done or not, and how we
get it done remains to be seen. I will now yield to Mr. Herger,
who will make an opening statement.
Mr. HERGER. Thank you Mr. Chairman. Unfortunately, ranking
member Jerry Weller is not able to attend the hearing today. On
his behalf, I would like to thank all the witnesses for being
here today, and I ask that Mr. Weller's opening statement be
inserted in the record. The goal of ensuring that all Americans
have adequate health care is one that we all share. Just how we
reach that goal has been an issue in hearings before many
Committees for quite some time here in Congress.
Today's hearing will add to that list. Mr. Weller's
statement explores how dropping out of high school leads to low
wages, or unemployment for too many young adults. For purposes
of today's hearing, dropping out of high school leads to far
higher chances that adults, and their families, will lack
health insurance coverage. That is despite the fact that many
are covered under Medicaid, and other public programs.
I certainly agree with Mr. Weller that this is one of many
reasons why this Congress, and the nation, should be doing
everything we can to improve the chances that young people
finish at least high school. That is the only way they can
obtain the skills needed to hold down good jobs that either
offer workers health coverage, or that pay enough for them to
purchase coverage on their own.
I look forward to the hearing, and the witness testimony
today, and I yield back the balance of my time.
[The prepared statements of Mr. Herger and Mr. Weller
follow:]
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Chairman MCDERMOTT. Thank you very much. We have before us
today----
Mr. CAMP. Mr. Chairman, if I could just for the record.
Chairman MCDERMOTT. Sure.
Mr. CAMP. I wanted to put in that this hearing covers
issues normally not under the jurisdiction of this Committee. I
am ranking member of the Health Subcommittee, and there are a
couple of non-partisan reports that I wanted to put in the
record with unanimous consent.
One is the Congressional Budget Office report called, ``The
Long-Term Outlook for Health Care Spending Sources of Growth
and Projected Federal Spending on Medicare and Medicaid.'' The
second one is one of a series of reports from the Congressional
Research Service on health insurance coverage, on health
insurance coverage of children and spending by employers on
health insurance.
With unanimous consent, if these reports could become part
of the hearing record.
[The information follows:]
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Chairman MCDERMOTT. I appreciate your comments. The fact is
that I talked with Pete Stark about this and when you look at
the health care issue, one of the problems we have in dealing
with it as a Congress, is it is fractured into a thousand
pieces. I think part of our effort in Congress, to deal with
this ultimately, is we are going to have to bring some of these
pieces together.
The Subcommittee on Social Security has part of this issue.
The health Subcommittee has part of this issue. We have part of
this issue. The Commerce and Energy Committee has part of the
issue. So, it really is very hard to talk about it. I
appreciate your being here, and being on both Subcommittees
will help us in the long run. Our witnesses today, the first
witness is Sherena Johnson. She is from Georgia. Mr. Lewis,
would you like to introduce her?
Mr. LEWIS. Thank you very much, Mr. Chairman and good
morning. Mr. Chairman, thank you so much for holding this
important hearing, I am so proud to introduce an extraordinary
young woman from the State of Georgia, who is testifying before
our Subcommittee today. Ms. Sherena Johnson lives in Morrow,
Georgia, and has an associate's degree in social work.
She is currently attending Clayton State University,
majoring in psychology and human services, and is an intern at
the State Department on Human Resources in downtown Atlanta.
She plans to become a licensed clinical social worker, and to
work with organizations that help young people transition from
foster care after graduation. She is a member of the Georgia
Empowerment Group, a statewide youth leadership and advocacy
group, for current and former foster youth. She was a member of
the 2006 Jim Casey Youth Opportunities Initiative Leadership
Institute Class.
Most recently, Sherena completed a 12-week internship with
the National All Star Foster Club, making her the youngest
person from Georgia to earn this honor. She is highly sought
after as a youth speaker, and is an active member of the
Metropolitan Atlanta Youth Opportunity Initiative. Ms. Johnson
has bravely come before us today to share her difficult story,
and I commend her for being here as a voice for other children
in foster care, and those aging out of foster care. Ms.
Johnson, thank you for being here, and we all look forward to
your testimony, welcome.
Chairman MCDERMOTT. We welcome you to the Subcommittee, and
I would say to you and to all the members of the panel, we have
received your testimony and it will all be entered in the
record in its completeness. So, we would like you to try and
stay within 5 minutes of the presentation that you make here
today.
So, Ms. Johnson.
STATEMENT OF SHERENA JOHNSON,
FORMER FOSTER YOUTH FROM MORROW, GEORGIA
Ms. JOHNSON. Good morning Chairman McDermott, ranking
member Weller and members of your Subcommittee, I would first
like to thank you for giving me this opportunity to appear
before you on behalf of my brothers and sisters that are
currently aging out of the foster care system today.
Mr. Lewis just gave a great introduction of myself, and I
would like to start off by saying that a lot of people would
consider my story to be a success story, given my background
and where I came from.
To add on to what Mr. Lewis said, my mother deceased when I
was 5 months old, and she was 21 at the time. I went on to live
with my grandmother, and I was taken away from her and put in
foster care, because she didn't have the necessary resources to
care for me at the time. I spent about 8 years in foster care,
only to age out at age 18, with limited to no resources. The
most significant resource that I lost was my health care
insurance. I didn't know at the time, how important it would be
to lose health care, because I was currently an athlete and
hardly ever sick. So, I didn't know the impact that it would
make on my life.
In my sophomore year of college, I was diagnosed with an
illness that could cause infertility if it continued to be
undetected or fixed. As a young woman, it is very significant
to be able to get yearly exams. Because I didn't have health
care insurance, I couldn't go to the doctor regularly to
receive those exams.
So, the condition continued and I didn't really have
anybody to go to, or talk about it to, and I just got really
depressed. As the illness began to grow, I began to be very
nauseated, depressed. I would get sick to my stomach. It got to
the point where I didn't even want to get out of bed at times.
Because I didn't go to class, because I was depressed and
really sick, I ended up getting suspended because my GPA
dropped. As you can imagine, it just started this ripple
effect. When my GPA dropped, I was suspended from school and I
had to sit out for two semesters. I was originally supposed to
graduate this semester, but because I was suspended back in
last spring, I would be graduating in spring 2008.
It was hard for me, because living in the Atlanta Metro
area, it is a very busy area, and the health clinics there were
difficult to treat me at the time, because they would have a
limited number that they could see, due to them not having the
appropriate number of staff.
So, I would get up at 6 a.m. in the morning to try to beat
the line and get there at 8. When I would get there, because
they didn't have enough nurses on staff, they would tell me
that they could only see the first five people with my
condition.
Of course, with the line being so long even though I
arrived there at 6:15 a.m., I was not one of the five people. I
had to drive an hour and a half outside of the area that I was
residing to finally seek medical attention at a health clinic
that I attended when I was getting my associate's degree. Even
though I went to that health clinic, because it is a health
clinic, there is only certain procedures that they can do. So,
they would still continue to send me on to other places for lab
work.
As you can see, this just was an ongoing condition. It was
a lot for me to have to deal with, aging out of foster care at
18 with no parents, nowhere to live. I was struggling during
school, because staying at the dormitories you had to leave
around the Thanksgiving and Christmas holidays. So, I was
already dealing with enough, and on top of that to not be able
to get my medical condition treated, I sort of lost hope.
To be honest, I stopped going to class, because the medical
condition was so bad that I thought it was going to end up
being cancerous. I just really thought I wasn't going to be
able to make it through the semester anyway. So, I though why
continue to go to class.
To this day I still do not have health care, and I am 22
years old. With me being 22, I am not standing here for myself,
because despite the odds I was still able to make it. But there
is a lot of youth in foster care right now today that are aging
out of foster care with no insurance. I thought this was just
an issue in the State of Georgia, but this is a national issue
for youth and foster care.
For one thing, we are considered to suffer post-traumatic
stress disorder at twice the rate of U.S. war veterans. If you
think about it, they are getting shot at and everything else,
and if you don't have medical insurance, you can't even go see
a counselor or a licensed psychologist to get those problems
taken care of.
My recommendation to this Committee would be for Congress
to mandate States to exercise the Medicaid option of the Chafee
Act, to allow you to have medical coverage until age 21 as we
transition from foster care. The State of Georgia was my parent
for many years. Consequently, it would help youth transition
from foster care so much if my parents, the State of Georgia,
stepped up to the plate and assumed its parental role.
Medicaid until age 21 will be the first step to helping
former youth and foster care, young people like me become
healthy, self-sufficient, productive individuals as we receive
help we need for physical and emotional problems. Still, a more
comprehensive approach is also needed to address the health
care needs of young adults who remain uninsured.
So, with that being said, I would just like to thank you
guys once again, for allowing me to be able to share my story
with you.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Sherena Johnson,
Former Foster Youth From Morrow, Georgia
Chairman McDermott, Ranking Member Weller, and members of this
Subcommittee, thank you for allowing me to appear before you today on
behalf of my brothers and sisters in foster care who need your help to
make health care available for youth in foster care so they can make a
successful transition to adulthood.
My name is Sherena Johnson. I am 22 years old and live in Morrow,
Georgia, a suburb of Atlanta. I am a senior at Clayton State
University, majoring in Psychology and Human Services. I've been very
involved with the Metropolitan Atlanta Youth Opportunities Initiative,
which is a site of the Jim Casey Youth Opportunities Initiative, a
national foundation that helps States and communities assist youth in
foster care make successful transitions to adulthood. I've served on
the youth advisory board, and I'm an Opportunity Passport? participant.
After my mother died and my grandmother no longer could care for me, I
spent eight years in the Georgia Foster Care system only to be
emancipated at age 18 with limited to no resources. The most
significant resource that I lost was Medicaid.
When I left foster care, I did not realize the impact that not
having health insurance would have on my life. During my sophomore year
of college, I was diagnosed with a serious medical condition that left
untreated could have caused infertility. As a young woman, it is
critical that you receive yearly physical exams. In my case, because I
had no medical insurance coverage, I was not able to afford the cost of
yearly exams. During the time that my condition went undetected, I
experienced nausea, pain in my stomach, and high fevers often due to my
undetected medical condition. I became so depressed because of my
condition and not knowing who to ask for help, I stopped going to
college regularly. I was not focused in school anymore because I was
very much preoccupied with my medical condition. I imagined that the
condition would ultimately be diagnosed as cancerous or worse. If this
was the case, I concluded (in my fearful state of mind) that I might
not be around at the end of the semester.
As expected, my negative state of mind started a ripple effect. My
GPA dropped below a 2.0. I was suspended for a semester and placed on
academic probation. It was not until I finally broke down and told some
very special people at the Georgia Department of Human Resources (where
I worked as an intern at the time) that I finally had the courage to
divulge exactly what was going on. The journey to find help was
difficult. Some of the members of this team of dedicated social workers
drove me across numerous different counties in an attempt to find a
doctor's office that would see me at an affordable rate. But all
attempts proved to be unsuccessful. We tried the local health
department but were unsuccessful in obtaining an immediate appointment
and were told that I would have to be placed on a waiting list. We
attempted to be seen at another health department in a surrounding
county. In order to be seen there, I would need to arrive at the clinic
no later than 7:00 a.m. due to limited availability of appointments.
This clinic had a limited number of staff and because of this could
only take the first five people in line. There were so many people in
line when I arrived at 6:15 a.m. that I immediately became discouraged.
I was not one of the five.
I finally received medical attention from a health clinic that was
an hour and thirty minutes outside of the county where I resided. Even
still there was only so much that could be done for me because I had
waited so long to get medical attention for my condition. I had to yet
again be referred to another clinic for lab work. Though I was still
frustrated, I did schedule an appointment for the lab work. After
numerous clinic visits, help from many concerned, supportive adults in
my corner, to this day I continue to have a medical condition that
needs to be treated. There is a possibility that this condition may
indeed require surgery. So, here I am back at the beginning, right
where I started from two years ago. I have no health insurance, no
means of affording insurance, no parent's insurance that will cover me.
My recommendation to this Subcommittee would be for Congress to
mandate States to exercise the Medicaid option of the Chafee Act to
allow youth to have medical coverage to age 21 as we transition from
foster care.
The State of Georgia was my parent for many years. Consequently, it
would help youth transitioning from foster care so much if my parent--
the State of Georgia--stepped up to the plate and assume its parental
role. Medicaid until age 21 would be a first step to helping former
youth in foster care, young people like me, become healthy, self-
sufficient, productive individuals as we receive the help we need for
physical and emotional problems. Still, a more comprehensive approach
is also needed to address the health care needs of young adults who
remain uninsured.
Thank you.
Chairman MCDERMOTT. Thank you very much for coming and
telling us your story. Your giving of details really made it
live, so thank you very much.
Mr. Lesley is the president of First Focus from Alexandria,
VA. First Focus is an organization, as I understand it, that
focuses on children and families, which try to be our first
focus. Mr. Lesley.
STATEMENT OF BRUCE LESLEY, PRESIDENT,
FIRST FOCUS, ALEXANDRIA, VIRGINIA
Mr. LESLEY. Thank you, Mr. Chairman. Good morning Mr.
Chairman, and Congressman Herger, Camp and Lewis. I am Bruce
Lesley, as the Chairman noted, president of First Focus, a
bipartisan organization dedicated to making children and
families a priority in Federal policy and budget decisions. I
would like to thank the Subcommittee, and its members, for
bringing the important voice of children and foster care youth
to this discussion and also for your recent hearings on the
health care needs of children in the foster care system, and
child welfare system.
I appreciate the opportunity to testify today about the
financial problems confronting children and families in the
health care system and to suggest possible policy solutions to
help these families. Nowhere are families more vulnerable, than
when it comes to access to health care. Unfortunately, the
trends are alarming on this front.
First, the number of uninsured children in this country is
on the rise, after almost a decade-long reduction in the number
of uninsured children due to the passage of SCHIP. The Census
Bureau found that in 2006, the number of uninsured has risen to
8.7 million, or 11.7 percent of the nation's children are now
without health insurance.
The number of uninsured children had declined by a third
since the creation of SCHIP a decade ago, but has in the past 2
years reversed course and has increased by one million
children. While the national trend is certainly alarming, a
State by State look at the insurance status of children reveals
trends that are, perhaps even of more concern.
In 39 States and the District of Columbia, the percentage
of children without insurance was higher in 2006 than it was in
2004, and in 29 States the rate increased by a full percentage
point or more.
Second, middle class families are not able to afford the
rising cost of health care. The drop in employer-sponsored
insurance for children suggest that dependent coverage is
declining more rapidly than the individual employee coverage.
According to data from the Kaiser Family Foundation Health
Research and Education Trust survey of employer sponsored
health benefits, the average annual cost for single and family
coverage in 2007, is $4,479 for the individual and $12,106 for
a family.
Thus, the average cost for family coverage is 2.7 times the
cost for individual coverage. However, employers subsidize
individual workers for coverage to a much greater extent than
they subsidize family coverage. As a result, the average
premium cost paid by workers for family coverage is 4.7 times
the cost of individual coverage.
Thus, family coverage is far more expensive, and it is
becoming harder for families to absorb. Rising health care
costs lead to financial instability, and the underinsured
account for the majority of bankruptcy filings. Between 2001
and 2007, health care premiums have increased 78 percent, while
inflation increased by 17 percent and worker wages increased by
19 percent.
Health care premiums have therefore, increased at four
times the rate of worker wages. Consequently, families are
increasingly faced with a triple threat to their financial
security in the form of a limited family budget confronted with
large annual increases in premiums, increases in other forms of
cost sharing such as copayments, deductibles and health benefit
limitations.
With fewer employers offering coverage, families are facing
the ultimate threat to financial security, having no insurance
at all, or being forced to pay out of pocket for exorbitant
health care costs. It is estimated that 16 percent of families
spend more than 5 percent of their income on health care, and
between eight and 21 percent of American families are contacted
by collection agencies about their medical bills on an annual
basis.
Of the 3.9 million people involved in personal bankruptcy
filings in 2001, it is estimated that 1.3 million, or one-third
of them were children.
To assess the impact of rising health care costs to middle-
class families across America, First Focus analyzed the 12
communities that are closest to the districts represented by
members of this Subcommittee. Analysis is in Appendix B of my
testimony, and shows that families who are in the median income
in 11 of the 12 communities are left with no money, after
taking into account the average cost of housing, food, child
care, transportation, other necessities, taxes and health care
cost.
Health care, which is unaffordable for families with
special needs children and unavailable for mental health
services. I would like to highlight the particular problems
facing families with children with special health care needs.
These children, by definition, have health care costs that are
three times greater than the costs of children without special
health care needs. These children face problems including
discontinuity of coverage, inadequate coverage of needed
services, inability to obtain referrals through appropriate
specialists because of insurance plan limitations and
inadequate provider payment levels and thereby, access to care.
Doctor's Alex Chen and Paul Newacheck have found that the
proportion of families with children with special health care
needs who reported parents needing to stop work, or cut back on
work, in order to care for their children was 30 percent. The
overall proportion of families who reported having financial
problems due to their child's care was 21 percent. A large
percentage of families in this country are having huge
financial difficulties with respect to health care costs.
With respect to mental health, I think that issue is
highlighted by the very fact that the National Alliance for
Mental Health did a survey, and found that 23 percent of
parents with children exhibiting behavioral disorders reported
being instructed to relinquish custody of their children, in
order to ensure they receive appropriate mental health care
treatment. No family should face such a decision.
I know I am out of time, so I will quickly say that I also
think that issues that have been raised by the previous panel
member really speak to the need to pass legislation like H.R.
2188, the Kinship Care giver Support Act. Sherena was in the
care of her grandmother, and her grandmother could not take
care of her financially. The Kinship Care giver Support Act
would help families of kinship care be provided in this
country, so that is not a situation that occurs.
In conclusion, First Focus would like to make the following
recommendations. We believe that the solution to health care is
going to require a lot of different efforts, including
expansion of public programs like Medicaid and SCHIP, premium
support, tax credits and personal responsibility; it is going
to take all those things to really tackle this problem.
Congress should take no action that would limit or restrict
the ability of States to address their uninsured or under-
insurance problems, and if nothing else, we hope that Congress
will not take negative actions to roll back that coverage.
Congress should also take leadership in a variety of areas
involving children, particularly children with special health
care needs, by passing mental health parity laws that I know
the Chairman has been very strongly supportive of, and
legislation such as the Keeping Families Together.
In addition, since 62 percent of all children in this
country who are uninsured are eligible but un-enrolled for
Medicaid or SCHIP, Congress should take up the President's
challenge when he ran for reelection to cover millions of these
children by working with States to conduct extensive outreach
and enrollment efforts, streamlining application and enrollment
procedures and making more extensive use of other needs-based
public programs to enroll children. This is legislation called
``Express Lane Eligibility.''
Finally, Congress should focus on the most disadvantaged
youth in our Nation and address gaps in coverage, health care
coverage for foster care children including access to care, the
needs of youth aging out of the child welfare system and
kinship care issues. Thank you very much.
[The prepared statement of Mr. Lesley follows:]
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Chairman MCDERMOTT. Thank you very much.
Sara Collins is here with the Commonwealth Fund. As vice
president in charge of future health insurance, Commonwealth
Fund has been at the table here, and in many places in the 20
years that I have been in Congress. We welcome your testimony.
STATEMENT OF SARA COLLINS, ASSISTANT VICE PRESIDENT, PROGRAM ON
THE FUTURE OF HEALTH INSURANCE, THE COMMONWEALTH FUND
Ms. COLLINS. Thank you Mr. Chairman, and Members of the
Committee, for this invitation to testify on the impact of gaps
in health coverage on income security. As rising health care
costs and premiums are making it more difficult for employers,
particularly small firms, to provide affordable health
insurance to their workers, increasing numbers of people under
age 65 are finding themselves without access to employer-based
coverage, and ineligible for enrollment in public insurance
programs like Medicaid, and the State Children's Health
Insurance Program. Or Medicare, in the case of those too
disabled to work. With its high premiums and underwriting, the
individual insurance market, which covers just 6 percent of the
under 65 population, has proven to be an inadequate substitute
for employer or public coverage.
Who is most at risk for lacking coverage? Low and moderate
income families. More than 60 percent of uninsured people under
age 65 are in families with incomes of under 200 percent of
poverty. The majority of people without coverage are families
where someone works full-time, but the likelihood of low and
moderate-income families having coverage through an employer
has always been lower than that of higher-income families, and
has declined over the past 6 years. Small firm and low wage
workers, workers who are employed in firms with fewer than 15
employees are less likely to have coverage through an employer.
Lower wage workers in small firms are at a particularly
high risk for not having benefits. Non-standard workers, those
who are self-employed, or in temporary part-time or contract
positions, are at high risk of not having coverage, about 24
percent are uninsured. More than 13 million young adults, ages
19 to 29 are uninsured. Employer health plans often do not
cover young adults as dependents after 18 or 19 if they don't
go on to college.
Medicaid and the State Children's Health Insurance Program,
as we've just heard, we classify all teenagers as adults on
their 19th birthday. Consequently, there is a dramatic
increase, an actual doubling of uninsured rates after age 19,
children turning 18 to 19, particularly among young adults and
low-income families.
Minorities are also at very high risk of lacking health
insurance, as are people who are unemployed. Despite the
availability of COBRA coverage, over half of unemployed adults
under age 65 are uninsured. Lower wage workers are far less
likely to be eligible for COBRA than higher wage workers. Even
COBRA eligible low-income workers who leave their jobs are much
more likely to be uninsured than our higher wage workers who
are COBRA eligible.
There are an estimated 1.7 million people with disabilities
in the waiting period for Medicare. In a Commonwealth Fund
survey of older adults, more than two of five disabled Medicare
beneficiaries between the ages of 50 and 64, said that they had
been uninsured just prior to entering Medicare.
What are the consequences of gaps of health insurance
coverage? Significantly higher rates of cost related problems
getting needed health care, and problems paying medical bills.
People without coverage confront profound spending tradeoffs in
their budgets, as Chairman McDermott pointed out. A
Commonwealth Fund survey found that 40 percent of uninsured
adults with medical bill problems were unable to pay for basic
necessities, and nearly 50 percent had used up all their
savings to pay their bills.
The Institute of Medicine estimates that uninsured people
collectively lose between $65 billion to $130 billion each
year, in lost capital and earnings from poor health and shorter
lifespans. It is essential on both moral and economic grounds
that the United States move forward to guarantee affordable,
comprehensive and continuous health insurance coverage for
everyone.
In the absence of universal coverage, there are several
policies that would help fill the gaps in the existing system,
by building on existing public and private group insurance, and
also create an essential foundation for universal coverage as
we move forward.
We should build on, for example public and private group
insurance, to extend coverage to vulnerable age groups and the
disabled. For example, we should allow States to extend
eligibility for Medicaid and SCHIP coverage beyond age 18. The
Foster Care and Dependence Act, which allows States to extend
Medicaid to children in foster care up to age 21, should be
taken up by all States and could be expanded to all children in
the Medicaid program.
Seventeen states have already redefined the age at which a
young adult is no longer a dependent for purposes of insurance.
Other states should follow their lead. We should allow older
adults to buy into the Medicare Program, and Medicare's 2-year
waiting period for coverage of the disabled.
We should also build on public and private group to extend
coverage to low income workers and families, expand Medicaid to
cover everyone under 150 percent of poverty and consider
providing Federal matching funds for sliding scale premiums at
higher income levels. We could require employers to finance
COBRA coverage for up to 2 months or longer, for employees who
lose their jobs, and the Federal Government could provide COBRA
premium assistance for COBRA premiums.
Finally, we could connect public and private group
insurance to realize efficiencies from pooling large groups of
people, create a national health insurance connector, as
Massachusetts has led the way on. Based on the Federal
employees health benefits program, or Medicare with sliding
scale premium subsidies, restrictions against risk selection on
the part of carriers, and Federal reinsurance. Thank you.
[The prepared statement of Ms. Collins follows:]
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Chairman MCDERMOTT. Thank you very much for your testimony.
Mr. Pollack, since 1993 at least. It is good to have you
here again. He is the founding executive director of Families
USA.
STATEMENT OF RON POLLACK,
FOUNDING EXECUTIVE DIRECTOR, FAMILIES USA
Mr. POLLACK Thank you Mr. Chairman, and thank you members
of the panel for inviting me here today, I appreciate it. I
want to just start with a contextual comment. You started, Mr.
Chairman, by talking about a number of people who are uninsured
in the latest Census Bureau numbers from the Current Population
Survey, and it tells us that 47 million were uninsured in 2006.
Now, there is a dispute among policy analysts as to what this
means. The literal question asked was, ``were you uninsured
throughout the course of the year.''
Some policy analysts, many policy analysts actually,
interpret the data as telling you how many people were
uninsured at the time the survey was undertaken. But under
either interpretation, it doesn't tell you how many people were
affected by being uninsured at some point over the course of a
year.
By the way, 47 million sounds like an unascertainable
number, and people can't put their hands around it. The way I
like to talk about it is 47 million is more than the aggregate,
underscore the word ``aggregate,'' population of 24 States plus
the District of Columbia; that is extraordinary. The number of
people who are uninsured almost exceeds the population of half
the States in the United States. But, as bad as that is, it
doesn't reflect how many people go in and out of being
uninsured.
For that reason, we have submitted to the Committee a
recent report that Families USA released, that is based on
other Census Bureau data, to look at how many people were
uninsured at some point over the last 2 years. The number is
astounding. The number of people who were uninsured at some
point over the last 2 years was 89.6 million people. This is
not double counting people who were uninsured 1 year and then a
second year these are separate, people who were uninsured at
some point over the course of the last 2 years.
Mind you, most of these people were uninsured for periods
that you can't consider trivial. Over half were uninsured for
more than 9 months in the 2-year period. Almost two-thirds were
uninsured for at least 6 months in that 2-year period. So, this
is rather substantial, and obviously it is likely to get worse
because the cost of insurance premiums is rising faster than
wages.
There are a variety of impacts that this created, and I
guess this is the heart of what you wanted me to talk about.
There are health care impacts for the persons who are
uninsured, which reflects their limited incomes. Then there are
other impacts, even for people who are insured. So, let me just
talk about some of the health impacts for people who are
uninsured.
The uninsured are far less likely to have a usual source of
care outside the emergency room. Uninsured adults are almost
seven times more likely than insured adults to consider the
emergency room as their usual source of care. The uninsured are
more likely to go without screenings and preventive care.
Uninsured adults are 30 percent less likely than insured adults
to have had a check-up in the past year. They are more likely
to be diagnosed with a disease in an advanced stage.
The uninsured are likely to delay, or forgo, needed care.
Fifty percent of insured adults, in fair or poor health,
reported that they needed care in the last year, but were
unable to see a physician because of cost. One in three
uninsured adults did not fill a drug prescription in the past
year because they couldn't afford the cost.
Uninsured Americans are more likely to be sicker and to die
earlier. Of course you know the Institute of Medicine statistic
that 18,000 people are estimated to die annually because of
their uninsured status. Uninsured children admitted to a
hospital due to injuries were twice as likely to die while in
the hospital as their insured counterparts.
Now, all of this has some very significant economic
impacts, even for those people who are insured. We issued a
report, not too long ago, that looked at what the impact is on
those of us who purchase insurance to pay for the uncompensated
care of those who are uninsured. In 2005, the premium add-on to
pay for the uncompensated cost of the uninsured for family
health coverage was $922. Today, I suspect, when we do an
update on this, we are likely to find that people are paying
$1,000 or more as an add-on to their insurance premiums to pay
for the uncompensated care of the uninsured.
More than one out of three who were uninsured were
contacted by a collection agency in the past year, and 3 out of
5 uninsured have reported problems with their medical bills.
Let me end by saying that clearly, dealing with this growing
problem, of people who are uninsured, deserves top priority
attention. Rather than going through a list of things that we
believe should be done, let me just close by saying that I
think for us to finally address this problem, we are going to
have to do business differently than we have ever done before.
It means we are going to have to address this in a
bipartisan fashion. We are going to have to transcend ideology.
There are groups of what, I guess, some people generally call
``strange bedfellow organizations'' that have been working
together. They transcend ideology, they transcend partisanship,
and my hope is that, come 2009, if this Congress truly wishes
to address this problem in a serious way, that we will be able
to come here with a proposal that can earn the support of
people on both sides of the aisle. So, I thank you, Mr.
Chairman.
[The prepared statement of Mr. Pollack follows:]
Prepared Statement of Ron Pollack,
Founding Executive Director, Families USA, Washington, DC
Families USA thanks the Subcommittee on Income Security and Family
Support of the House Committee on Ways and Means for the opportunity to
present testimony on the impact of gaps in health coverage on income
security. This testimony focuses on the issue of the uninsured more
broadly, as well as the effects of the crisis of the uninsured on the
uninsured themselves, people with insurance, and the U.S. economy.
I. Magnitude of the Problem
Every year, the U.S. Census Bureau--in its Current Population
Survey (CPS)--reports the number of people who are uninsured. This
widely quoted number is intended to offer an estimate of how many
people did not have any type of health insurance for the entire
previous calendar year. In August 2007, the CPS reported that there
were 47.0 million uninsured people in the United States in 2006. This
represents an increase of nearly 2.2 million people over 2005. The
number of uninsured is also now larger than the combined population of
24 States plus the District of Columbia.
There are many people, however, who are uninsured for a portion of
a year but not for the entire year. These individuals are not reflected
in the widely quoted Census Bureau number, but they may be profoundly
affected by their uninsured status--in terms of both their physical and
their economic well-being. To understand the scope of the problem--to
know how many Americans are directly affected by a lack of health
insurance--we need to broaden our sights and include those who are
uninsured for a portion of the year.
A recent analysis by Families USA reveals that 89.6 million people
under the age of 65--more than one out of every three non-elderly
Americans--went without health insurance for all or part of 2006-2007.
In addition, we found that the number of uninsured people increased
dramatically over our study period: Between 1999-2000 and 2006-2007,
more than 17.0 million Americans under the age of 65 joined the ranks
of the uninsured.
Our findings demonstrate that the crisis of the uninsured affects a
diverse array of people. Americans from every income group, every
racial and ethnic group, and nearly every age group are uninsured. In
addition, as previous research has demonstrated, the vast majority of
the uninsured are from working families. Four out of five individuals
who were uninsured during 2006-2007 were from working families, and
70.6 percent of the uninsured were from families with one or more
people employed full-time. Moreover, the majority of people who are
uninsured remain uninsured for substantial periods of time: Over one-
half (50.2 percent) were uninsured for more than nine months, and
almost two-thirds (63.9 percent) were uninsured for more than six
months. The effects of being uninsured--even for a period of a few
months--can be devastating, both financially and physically.
Furthermore, as the duration of time without health insurance
increases, so do the chances of facing catastrophic financial and
health problems.
II. What the Crisis of the Uninsured Means for the Uninsured
Being uninsured--even for a period of a few months--can have
profound effects on an individual's physical and economic well-being.
Without insurance to cover the costs of routine health care, the
uninsured often go without screenings or preventive services. Uninsured
adults are more than 30 percent less likely than insured adults to have
had a checkup in the past year. Even when uninsured adults do receive
preventive care and know they have a chronic condition, they are less
likely to receive proper follow-up care. For example, uninsured
patients with high blood pressure are less likely to have their blood
pressure monitored and controlled, and they are less likely to receive
disease management services.
In addition, people without insurance are more likely to delay or
forgo necessary medical care. When sick, uninsured adults are more than
three times as likely as insured adults to delay seeking medical care.
And uninsured children are nearly five times more likely than insured
children to have at least one delayed or unmet health care need.
The consequences of going without necessary care can be dire.
Uninsured Americans are sicker and die earlier than those who have
insurance, and consistently report that they are in poorer health than
people with private insurance. Lower levels of self-reported health
status, in turn, are a powerful predictor of future illness and
premature death. In fact, uninsured adults are 25 percent more likely
to die prematurely than adults with private health insurance coverage,
and the deaths of 18,000 people between the ages of 25 and 64 each year
can be attributed to a lack of health insurance.
Without the protection of insurance, uninsured Americans are also
at financial risk when faced with the need for health services. Three
out of five uninsured adults under the age of 65 reported problems with
medical bills. And, over the course of a year, more than one out of
three uninsured people are contacted by a collection agency about
outstanding medical bills. When the burden of health care costs becomes
too great, the consequences can be catastrophic. Faced with medical
debt, families often have no choice but to consider drastic changes in
lifestyle and, eventually, bankruptcy. Since 2000 alone, 5 million
American families have filed for bankruptcy following a serious medical
problem. In all, approximately half of bankruptcies are due, at least
in part, to medical expenses.
III. What the Crisis of the Uninsured Means for the Insured
What happens when the uninsured are sick and need health care?
Certainly, the uninsured are much less likely to receive health care,
and many never do. Those who seek care, however, struggle to pay as
much as they can. Even after making tremendous personal sacrifices, the
contributions made by the uninsured toward their medical bills cover an
estimated 35 percent of the cost of care they receive from doctors and
hospitals. The remaining amount is primarily paid by two sources:
Roughly one-third is reimbursed by a number of government programs,
including Medicaid and Medicare Disproportionate Share Hospital (DSH)
payments from the federal government and state and local programs, and
two-thirds is paid through higher premiums for people with health
insurance.
Families USA estimates that almost $29 billion worth of unpaid care
received by the uninsured in 2005 was financed by higher premiums for
privately insured patients. As a result, the cost of private insurance
was, on average, 8.4 percent higher in 2005 than it would have been if
everyone in the United States had health insurance. This translates
into $341 more a year for the average individual premium and $922 more
a year for the average family premium.
How does the cost of care for the uninsured end up being passed on
in the form of higher private health insurance premiums? The cost of
care not directly paid for by the uninsured or by government programs
or philanthropy is built into the cost base of physician and hospital
revenue. Providers attempt to recover these ``uncompensated care''
dollars through various strategies. One key strategy is to negotiate
higher rates for health care services paid for by private insurance.
The extent to which providers can do this varies from State to State;
nonetheless, the rates always reflect a significant amount of
uncompensated care. Given that most health care providers are not
driven to bankruptcy and our health care system survives from year to
year, we can say with certainty that those with health insurance
finance the residual two-thirds cost of care for the uninsured provided
by hospitals and doctors. Ironically, this increases the cost of health
insurance and results in fewer people who can afford insurance--a
vicious circle.
IV. What the Crisis of the Uninsured Means for the U.S. Economy
The crisis of the uninsured also has consequences for the nation's
economy as a whole. While the microeconomic effect of going without
health insurance on the individual has been studied extensively and is
cited frequently, the macroeconomic effect of so many Americans going
without health insurance is less frequently discussed. Economists
estimate that between $65 and $130 billion of productivity is lost each
year due to people going without health insurance in America.
Access to health insurance at every age is vital to the
productivity of a nation's workforce. Ensuring that children have a
healthy start sets the foundation for future productivity and helps
kids reach their full potential. Insured children are less likely to
have developmental delays that may affect their ability to learn. In
addition, improving health increases educational attainment and raises
earnings potential by 10 to 30 percent.
Once a worker is in the labor force, consistent access to quality
health coverage is critical. Studies have shown that insured employees
are healthier, and better health, in turn, is related to increased
productivity. In fact, one study showed that providing health insurance
alleviates one in 10 days missed for illness. Three in four employers
believe that health benefits are extremely, very, or somewhat important
for improving employee productivity. In addition, providing health
insurance ensures that employees have access to primary and preventive
care that keeps them healthy and productive in the long-run.
Moreover, health insurance reduces turnover. The cost of hiring and
training new employees drains business productivity. Many studies show
that workers with health insurance change jobs less frequently. Nearly
three-quarters of workers said that health insurance was a very
important factor in their decision to take or keep a job. While the
importance of health insurance to the individual is clear, these data
demonstrate the significance of health insurance in ensuring a healthy,
productive labor force. The current epidemic of the uninsured places
not only American families, but also businesses, and our nation's
economic vitality at risk.
V. Why is the Number of Uninsured on the Rise?
Millions of people are currently uninsured, and this problem has
grown substantially over the last few years. One of the primary factors
driving the increase in the uninsured is health insurance premium
increases. Between 1999 and today, premiums have risen rapidly,
increasing by double-digit amounts every year between 2001 and 2004.
Moreover, these rising premiums have far outstripped increases in
worker earnings. Between 2000 and 2006, premiums for job-based health
insurance increased by 73.8 percent, while median worker earnings rose
by only 11.6 percent. As premium costs outpace wages, more people end
up without health insurance: For each percentage point increase in
health care costs relative to income, the number of uninsured people
increases by 246,000.
Faced with the rising cost of health insurance premiums, employers
must make difficult decisions. Some employers, particularly small
businesses, have concluded that they can no longer afford to offer
health insurance to their workers and have dropped coverage, further
increasing the number of uninsured Americans. Other employers continue
to offer health insurance, but they now ask their employees to pay a
greater share of the premiums. In addition, a growing number of
employers seek to hold down costs by offering ``thinner coverage''--
coverage that offers fewer benefits and/or charges higher deductibles,
copayments, and co-insurance.
Working families must contend with a set of difficult decisions.
Even if someone in the family has an offer of coverage, he or she is
likely to be required to pay more for fewer benefits than in the past.
Between 2000 and 2006, the employee share of family insurance premiums
increased by 78.2 percent. As a result, more and more working families
are being priced out of job-based insurance.
Workers without an offer of job-based coverage--and those who
cannot afford to purchase their employer's plan--may seek coverage on
their own. Finding an individual insurance plan that meets their needs
and their budget is likely to be extremely challenging. One recent
survey found that nine out of 10 people who sought individual coverage
never purchased a plan--either because they couldn't find an affordable
plan, they were rejected for coverage, or they were offered a plan that
excluded coverage for the very care they were most likely to need.
Without the availability of affordable, quality coverage, more American
families are at risk of becoming uninsured and suffering the economic
and physical consequences that are likely to follow.
VI. Conclusion
As this testimony demonstrates, the current crisis of the uninsured
detrimentally affects not only the uninsured themselves, but also
people with health insurance and the economy as a whole. Ensuring that
all Americans have access to quality, affordable health insurance
coverage is imperative to protecting the economic and physical well-
being of all Americans. Moreover, popular support for reforming health
care is evidenced by the fact that health care has become the top
domestic issue in recent polls and public option surveys. Families USA
is glad to see that presidential and other candidates are making health
care a central issue of their campaigns. The challenge for the upcoming
months and years will be for our nation's leaders to move from debate
to action--making health care a top budget and issue priority, and
ensuring that every American has reliable and continuous access to
high-quality, affordable health coverage.
[The Families USA report follows:]
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Chairman MCDERMOTT. Thank you very much for your testimony.
Mr. Gottlob, who is a senior fellow at the Milton and Rose
Friedman Institute Foundation.
STATEMENT OF BRIAN J. GOTTLOB, SENIOR FELLOW,
MILTON AND ROSE D. FRIEDMAN FOUNDATION
Mr. GOTTLOB. Thank you, Mr. Chairman. I have not been here
before so it is indeed an honor and a privilege for me to be
able to testify today.
The Friedman Foundation encourages greater economic
opportunity and security by supporting research activities and
increased educational opportunities for children from all
socio-economic backgrounds.
Among my research activities for the Friedman Foundation is
I have attempted to monetize or place some dollar values on
some of the public or social costs that are associated with
dropping out of high school. For too long the costs of dropping
out of high school have been assumed to be primarily fall on an
individual and primarily in terms of the earnings impact on an
individual over their lifetime.
But there are significant costs to society, and among those
and among the most significant are the problem that you're here
today to address, and that is the lack of health insurance
coverage and also increases in Medicaid enrollment and Medicaid
caseloads.
There's been a lot of reforms that have proposed to
fundamentally change the way we provide health care, the way we
ration it or the way we pay for it. What I would like to do
today is argue for policies that focus on increasing
educational attainment and reducing high school dropout rates
across the country as an effective means for dealing with these
issues.
There is no doubt that increasing high school graduation
rates will increase health insurance coverage, and at the same
time provide powerful other benefits to society while at the
same time presenting no fundamental risks to our health care
system.
I do want to talk a little bit about the number that you've
been presented with today: 47 million uninsured individuals.
While that is troubling and it demands your best efforts to
address, before concluding that we need to make basic,
fundamental changes to our health care system, I think we ought
to understand a little bit more about that population of 47
million.
Included in that group is 10.2 million individuals who are
not U.S. citizens. It includes about 11 million who chose not
to participate in employer-sponsored health plans that were
available to them. A lot of those are young workers who,
thinking as I did once that I was immortal, don't opt to
participate in those plans. Almost half, 49 percent or 23
million, are of African-American or Hispanic origin. I didn't
include this in my testimony, but there's also a large number,
probably several million who would qualify for Medicaid and
have insurance, but they haven't applied for it.
Looking at the most recent year, because that number is
also troubling, or the most recent 6 years: an 8 million
increase and about a third, 2.57 million, are not U.S.
citizens. More recently, in the last year of the 2.1 million
increase in uninsured population, 38 percent are not U.S.
citizens. 4.5 million are of Hispanic origin, both citizens and
non-citizens, 1 million African-Americans, about 45 percent or
3.7 million have family incomes above 75,000. That truly is a
problem with the fundamental nature of our health care system.
There's been virtually no increase in the uninsured among
individuals and households making less than $25,000.
I don't cite those figures to stereotype the population and
I certainly don't want to engage in the already overheated
debate on immigration, but what I think the data suggests is
that there's a tremendous heterogeneity among the population of
the uninsured. That does not lend itself to blanket
prescriptions to address the problem.
I see in the data an overrepresentation of individuals from
demographic groups that are characterized by lower levels of
educational attainment and higher levels of high school dropout
rates. Others can see different things in the trends, but we
can't escape the notion that the data suggests that there are a
variety of factors, including many outside of the health care
system, that are characterizing the lack of health insurance
among our population.
Lower levels of educational attainment and higher dropout
rates reduce health insurance. About 40 percent of the working
age high school dropout population are not in the labor force,
so they can't get health insurance from their employer.
Dropouts comprise 12 percent of the working age, 20 to 64
population, but make up 30 percent of the working age
uninsured. Dropouts are twice as likely to be receiving or
having someone in their family receive Medicaid benefits.
Employer provided health insurance is still the dominant
source of coverage, but when someone drops out, they cannot
avail themselves of that. If all working age dropouts in this
country, and there's about 20 million of them, if all of them
had been high school graduates and we applied those same
percentages, about 4 million would be covered by private
insurance. If you add independents, it would be at least 10
million who would be covered, an additional 10 million. The
cost of dropouts to the Medicaid program is about an additional
3.5 million Medicaid beneficiaries every year and a cost of
about $7 billion.
If everyone graduated, no one dropped out, we wouldn't
eliminate that, but we would reduce it. We would reduce it by
that 3.5 million and $7 billion in costs. Attacking the problem
of high school graduation rates with the same figure that we
want to attack, the health care issue, I think will yield not
only benefits in the health care side, but also substantial
other public benefits and societal benefits. Just because you
are on the Committee on Ways and Means, I have to point out
that the lost earnings impact of high school dropouts in this
country is almost $200 billion and a tax cost of about $31
billion.
What can be done to address the problem? Well, there is no
one, single solution. I believe there's a lot of innovative
practices that are being attempted and more will follow. I
personally believe that the educational system in the country
contains far too much segregation of students and families
according to income and educational attainment of parents. This
segregation has profound impacts on the differential,
educational opportunities of children. No matter how much we
increase funding for education, there maintains a separate
tacit but equal structure to educational opportunities in this
country. The result is a lot more separation and a lot less
equality.
In conclusion, some of the most effective means of reducing
the number of uninsured individuals in this country do not
involve fundamental changes to our health care system. In
addition, they confer benefits outside of the health care and
health insurance arena. I suggest that some of the factors that
are contributing to the lack of health insurance are not simply
fundamental flaws of the health care system to maximize public
benefits while addressing declines in health insurance. We
ought to look to opportunities to create those synergies; and,
increasing high school graduation is one way to dramatically
reduce the future incidence of individuals without health
insurance.
Thank you.
[The prepared statement of Mr. Gottlob follows:]
Prepared Statement of Brian J. Gottlob, Senior Fellow,
Milton and Rose D. Friedman Foundation, Indianapolis, IN
Mr. Chairman and Members of the Committee:
Thank you for inviting me to testify on the important issue of
health insurance coverage and income security in the United States. The
Friedman Foundation encourages greater economic opportunity and
security by supporting research and activities that increase the
educational opportunities and achievement of children from all
socioeconomic backgrounds.
In addition to my work with the Friedman Foundation, I am a
principal in an economic research and consulting firm. My testimony
today is based on my work for the Friedman Foundation, but some of my
comments may also reflect personal views rather than the views of the
Foundation.
Among my research activities for the Friedman Foundation I have
attempted to place dollar values or ``monetize'' several of the public
or social costs associated with the low high school graduation rates
that are characteristic of many school districts across the country.
The impact of dropouts is especially apparent in the low rates of
private health insurance and in the higher Medicaid enrollments among
dropouts. In addition, the higher percentage of uninsured among
dropouts can raise the cost of private health insurance when the cost
of health services for the uninsured is not paid and must be recovered
by raising prices on all other payers.
For too long the costs of failing to obtain a high school diploma
have been expressed primarily in terms of the cost to individual
dropouts. These private costs, typically expressed in terms of lost
annual earnings and over a lifetime, are large. My research indicates,
however, that the cost to the public in terms of higher government
expenditures and lower revenues are no less dramatic.
Many reforms have been proposed to the way we provide, ration, or
pay for health care in this country. To increase the percentage of the
population that is covered by health insurance I want to instead argue
for policies that focus on increasing educational attainment and
reducing high school dropout rates across the country. The benefit of
this approach is that we know that the failure to obtain a high school
diploma is strongly related to the lack of health insurance as well as
with higher utilization of government provided health insurance and
associated health care expenditures. There should be no debating that
higher graduation rates will increase health insurance coverage with no
risk of unintended consequences to the health care system.
The benefit to individuals and to society of focusing on policies
that reduce high school dropouts extend well beyond health insurance
coverage. Even modest increases in graduation rates will have a clear
and dramatic impact on future rates of health insurance coverage at the
same time it increases government revenues and reduces government
expenditures.
Overview
The uninsured population in this country has risen by more than 8
million since the year 2000, to a total of just under 47 million in
2006. That number is troubling and demanding of our best efforts to
reduce it, but before concluding that the basic structure of our
nation's health care system must be revamped it is prudent to look more
closely at trends in the incidence of health insurance coverage and
more broadly at the factors that have contributed to them.
Using the same U.S. Census Bureau data on trends in the population
without health insurance that, in part, have prompted this hearing, I
will highlight some of the more significant trends in insurance
coverage that can be overlooked with a focus on the aggregate numbers.
The 47 million estimated by the Census Bureau to be uninsured
include: \1\
---------------------------------------------------------------------------
\1\ Data on health insurance coverage and trends are from the U.S.
Census Bureau analyses available at http://pubdb3.census.gov/macro/
032007/health/h09_000.htm and http://www.census.gov/hhes/www/hlthins/
hlthin00/hi00ta.html
10.2 million who are not U.S. Citizens.
About 11 million who chose not to participate in an
employer sponsored health plan that was available to them. Young adult
workers are especially prone to decline participation in employer-
sponsored health plans.
Almost one-half (49% or 23 million) who are African-
American or of Hispanic origin.
The troubling increase of over 8 million uninsured in the United
States between 2000 and 2006 includes the following trends:
Almost one-third (2.57 million) are not U.S. Citizens.
More recently, among the 2.1 million increase in the uninsured
population between 2005 and 2006, 38 percent are not U.S. Citizens.
Almost 4.5 million are of Hispanic origin (both citizens
and non-citizens.)
Just over 1 million are African-American.
About 2.3 million (or 27%) are Non-Hispanic white
individuals.
About 45% or 3.7 million have family incomes of $75,000
or more.
Virtually no increase in the number of uninsured (44,000)
among individuals in households making less than $25,000.
Highlighting the above data and trends from the Census Bureau in no
way minimizes the very real concerns over the decline in health
insurance coverage or to stereotype the population or characteristics
of the uninsured, or discount or minimize their plight. Finally,
neither I nor the Friedman Foundation has any interest in fanning the
flames of an overheated heated debate on immigration policy.
If anything, these data highlight heterogeneity among the
population of the uninsured that does not lend itself to blanket policy
prescriptions to increase the number of those with health insurance
coverage. Rather, I believe the data suggest that a broader set of
policies should be considered to increase health insurance coverage in
our country.
At the risk of being accused of ``seeing what I know'' rather than
seeing what the data are revealing, I see in the data an
overrepresentation of individuals in demographic groups that are
characterized by lower overall levels of educational attainment and
elevated levels of high school dropout rates. Others may see the trends
differently but we cannot escape the fact that the data suggest that a
variety of factors, including many outside of the characteristics of
our health care system, appear to greatly influence the size of the
population without health insurance. Thus efforts to increase health
insurance should examine policies outside the sphere of our health care
system that may exert a large or a larger influence on the size of the
uninsured population.
Aside from the impact of educational attainment, the rise in the
number of uninsured individuals among households with annual income of
$75,000 is perhaps the most revealing trend in health insurance
coverage. The trend likely reflects a decline in the number of
employers providing health insurance, changes in cost sharing
arrangements between employers and employees that results in fewer
employees opting to participate in employer provided plans, or some
combination of the two. An increase in the self-employed who have
traditionally had lower rates of health insurance coverage is also a
contributor.
The decline in employer provided health insurance is a complex
phenomenon that is affected by many variables such as cost shifting to
private payers, the impacts of coverage mandates and regulations,
medical service cost inflation, demographics and many other factors. As
a result, reversing the declining trend of employer provided insurance
will be among the most challenging avenues for increasing insurance
coverage.
The Impact of Dropouts on Health Insurance Coverage
Lower levels of educational attainment and higher dropout rates
reduce health insurance coverage and increase government expenditures.
Almost 40% of working-age high school dropout ages 20-64
are not in the labor force. Less than one-quarter of dropouts receive
employer-provided health insurance coverage.
Dropouts comprise about 12% of the working age (20-64)
population but make up almost 30% of the working-age uninsured.
Dropouts are nearly twice as likely as high school
graduates (38.5% to 21.1%) \2\ to be receiving Medicaid benefits or to
have someone in their household (dependent children) receiving
benefits.
---------------------------------------------------------------------------
\2\ These data are from my analysis of the 2006 and 2007 March
Supplement of the U.S. Census Bureau's ``Current Population Survey''.
---------------------------------------------------------------------------
Figure 1--Dropouts Represent About 12% of the Working-Age (20-64)
Population but 27% of Medicaid Recipients
[GRAPHIC] [TIFF OMITTED] T3756A.500
Data from the 2006 and 2007 March Supplement of the Census Bureau's
Current Population Survey indicate that there are approximately 20
million high school dropouts ages 20-64 in this country. The low rate
of private insurance coverage among the population of dropouts
increases the demand for government provided insurance such as Medicaid
(Figure 1).
Employer provision of health insurance is still the dominate source
of coverage for Americans and the higher rates of employment of high
school graduates compared to dropouts mean that reductions in dropout
rates would dramatically reduce the number of uninsured. If all working
age high school dropouts somehow were transformed into high school
graduates, with the same patterns of insurance coverage as exist among
current high school graduates, then the number of uninsured working age
adults would drop by almost 4 million. In addition, an increase of 4
million insured would result in additional coverage of many dependents
and would likely mean that at least 8 million, and quite possible more,
individuals would have health private insurance coverage.
Similarly, increasing high school graduation rates will lower
government expenditures for health care by reducing Medicaid
beneficiaries by an estimated 3.5 million. At an average annual
beneficiary cost of $2,000 (not including the elderly and disabled who
have much higher annual costs) Medicaid expenditures would be reduced
by $7 billion annually (Table 1).
Even if the dropout rate were reduced to zero, however, a large
number of individuals would still be without health insurance coverage
and the number receiving Medicaid benefits would not decline by the
entire number of Medicaid beneficiaries among the dropout population.
Nevertheless the problem would be more manageable and it would be more
directly attributable to problems in the health care system rather than
artifacts of other economic, demographic, and social factors.
Table 1: Annual Medicaid Expenditures Attributable to Dropouts \3\ (Note: Does Not Include Elderly and Disabled)
--------------------------------------------------------------------------------------------------------------------------------------------------------
# On
% On or W/ # On or W/ Total Cost = # Avg. Cost All e> Avg. Cost
Medicaid Medicaid Graduated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dropouts 20,201,421 38.5% 7,777,547 $15,555,094,170 0 $0
--------------------------------------------------------------------------------------------------------------------------------------------------------
HS Grads 51,136,662 21.1% 10,789,836 $21,579,671,364 15,052,336 $30,104,671,026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Some Coll. No Degree 33,116,954 15.5% 5,133,128 $10,266,255,740 5,133,128 $10,266,255,740
--------------------------------------------------------------------------------------------------------------------------------------------------------
AA. Degree 15,289,612 12.6% 1,926,491 $3,852,982,224 1,926,491 $3,852,982,224
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bachelor's 30,805,745 6.8% 2,094,791 $4,189,581,320 2,094,791 $4,189,581,320
--------------------------------------------------------------------------------------------------------------------------------------------------------
Master's 10,413,640 4.9% 510,268 $1,020,536,720 510,268 $1,020,536,720
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prof/Ph.D 3,957,896 3.9% 154,358 $308,715,888 154,358 $308,715,888
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total 164,921,930 17.2% 28,386,419 $56,772,837,426 24,871,371 $49,742,742,918
--------------------------------------------------------------------------------------------------------------------------------------------------------
Difference (Annual Medicaid Cost of Dropouts): 3,515,047 $7,030,094,508
--------------------------------------------------------------------------------------------------------------------------------------------------------
\3\ Ibid.
Pursuing policies that increase high school graduation rates as a
strategy for increasing health insurance coverage will allow state and
local governments to partner with the federal government and to play a
prominent role in addressing this important issue.
Attacking the problem of low high school graduation rates with the
same vigor and attention we give to low health insurance coverage rates
will yield large benefits outside of the health care system. One reason
why health care and health insurance command so much of our efforts and
attention is that we understand the significance these issues have to
each of us. In contrast, the dropout problem that so significantly
impacts health insurance coverage, commands far less public and policy
maker attention because it is incorrectly assumed to have only a
limited impact on a majority of the population.
By documenting some of the public as well as private costs of
dropouts, my research seeks to bring the same public concern for the
problem of high school graduation rates that is evident in concerns
over health insurance. Public costs such as higher rates of crime and
incarceration, poorer health, higher unemployment rates, lower
productivity, economic growth, and government revenues, as well as
higher government expenditures for health care and public assistance
are all consequences of low high school completion rates.
Impact of Dropouts on Government Revenues
It is well documented that high school graduates have much higher
earnings than do high school dropouts. The impact of the lower earnings
of dropouts on government revenues is less well documented. Table 2
shows that the lower average annual earnings of 20 million working-age
dropouts implies wage and salary earnings in the U.S. that are $194
billion lower than if all dropouts had obtained a high school diploma.
\4\
---------------------------------------------------------------------------
\4\ This estimate is appropriate to illustrate the earnings impact
of educational attainment, but it does not consider the ``equilibrium
effects'' that would occur in the labor market if all dropouts actually
did graduate--that is, the ways in which the larger economy,
employment, and wage rates might be affected in response to such a
increase in high school graduation rates.
Table 2: Earnings Impact of Dropouts Age 20-64 \5\
----------------------------------------------------------------------------------------------------------------
Avg.
# Wages & Total Earnings If Dropouts Were HS
Salary Grads
----------------------------------------------------------------------------------------------------------------
Dropouts 20,201,421 $13,078 $264,186,103,270 $0
----------------------------------------------------------------------------------------------------------------
HS Grads 51,136,662 $22,682 $1,159,866,426,485 $1,618,068,997,181
----------------------------------------------------------------------------------------------------------------
Some Coll. No Degree 33,116,954 $24,954 $826,393,846,725 $826,393,846,725
----------------------------------------------------------------------------------------------------------------
AA Degree 15,289,612 $31,449 $480,841,478,827 $480,841,478,827
----------------------------------------------------------------------------------------------------------------
Bachelor's 30,805,745 $46,331 $1,427,245,568,723 $1,427,245,568,723
----------------------------------------------------------------------------------------------------------------
Master's/Prof./Ph.D 14,371,536 $69,578 $999,944,168,962 $999,944,168,962
----------------------------------------------------------------------------------------------------------------
Total 164,921,930 $31,278 $5,158,477,592,991 $5,352,494,060,417
----------------------------------------------------------------------------------------------------------------
Difference $194,016,467,426
----------------------------------------------------------------------------------------------------------------
\5\ Analysis of 2006 and 2007 ``Current Population Survey'' March Supplement data
In addition to the increase in the annual earnings of residents and
a reduction in Medicaid and other government expenditures, increasing
graduation rates would yield large increases in tax revenue. We used
the tax simulation model (TAXSIM) of the National Bureau of Economic
Research to model the income tax impacts attributable to the population
of working age dropouts in the U.S. \6\
---------------------------------------------------------------------------
\6\ We had to make some simplifying assumptions in calculating tax
liabilities. Most important, because we had no data on spousal income
for the population of high school dropout taxpayers, we treated all
taxpayers as if they were filing as single taxpayers, We calculated tax
liabilities for taxpayers with zero to three dependent child exemptions
and weighted the number of returns according to the percentage of
dropouts with and without dependent children, as gleaned from the CPS.
Because there are a number of additional tax deductions, exemptions or
credits that can apply to taxpayers age 65 and older, we limited our
tax analysis to residents under the age of 65. The complexities of
individual tax filings could not be captured when trying to model more
than 20 million tax returns of working-age dropouts, but our results
provide a reasonable estimate that is likely to be within a few
percentage points of the true income-tax cost associated with the
earnings differential between high school graduates and dropouts
---------------------------------------------------------------------------
In combination, the lower earnings and decreased tax payments of
high school dropouts, along with the higher cost of tax credits
attributable to dropouts, results in an income tax cost of $31 billion
attributable to dropouts (Table 3). The secondary revenue impacts that
would result from increased earnings and expenditures from a reduction
or elimination of dropouts are not documented here but would yield
additional federal and state revenues equal to or greater than those
highlighted here.
Table 3: Estimated Income Tax Cost of Dropouts \7\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated 2007 Tax Liability
Wage & -------------------------------------------------------------------------
Salary 3 or More
Income 0 Child 1 Child 2 Children Children
--------------------------------------------------------------------------------------------------------------------------------------------------------
HS Grads $22,682 $1,730 -$358 -$2,990 -$4,027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dropouts $13,078 $446 -$2,686 -$4,845 -$4,845
--------------------------------------------------------------------------------------------------------------------------------------------------------
Difference $1,284 $2,328 $1,855 $818
--------------------------------------------------------------------------------------------------------------------------------------------------------
12,141,799 3,455,105 2,940,309 2,447,059
--------------------------------------------------------------------------------------------------------------------------------------------------------
20,201,421 $15,590,069,916 $8,043,484,440 $5,454,273,195 $2,001,694,262
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dropouts
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Age 20-64) Grand Total: $31,089,521,813
--------------------------------------------------------------------------------------------------------------------------------------------------------
\7\ Earnings data from the Current Population Survey. Tax liabilities were estimated using the National Bureau of Economic Research ``TAXSIM'' model.
What Can be Done to Increase Graduation Rates
There are a number of initiatives that show promise for increasing
high school graduation rates and innovations are being tested on a
small scale all the time. There is no single best solution and I
believe that innovation and new initiatives should be encouraged. Based
on the numbers I have discussed here, even modest increases in
graduation rates should yield fiscal benefits capable of supporting
additional efforts to reduce dropouts by State and local governments
while significantly reducing the number of uninsured in the process. As
importantly, these benefits will be realized without risk of unintended
consequences to our health care system.
I believe that the educational system in this country contains far
too much segregation of students and families according to income and
educational attainment of parents. This segregation has profound
impacts on the differential educational opportunities available to
children. No matter how much we have increased funding, education that
maintains a tacit ``separate but equal'' structure to educational
opportunities seems to have succeeded only in separation while failing
at equality. The result is that the long-term economic opportunities
for many are greatly limited. Restricting educational opportunities to
assigned schools maintains the inherent segregation in education along
income and parental education lines and will assure the continuation of
segregation in our education system and likely maintain existing
differences in educational opportunity.
That said, regardless of what policies to increase graduation rates
are instituted, it is most important to acknowledge the critical role
that increasing educational attainment can play in reducing the
percentage of our population that lacks health insurance coverage, at
the same time increasing graduation rates will yield additional public
benefits and reduce public costs.
Increasing graduation rates is a forward looking policy
prescription. We cannot retroactively increase graduation rates for the
20 million working-age dropouts in our population but by increasing
high school completion rates we can increase future revenues and lower
future public expenditures in a way that allows for more attention and
resources to be directed at those for whom the future is now and the
past cannot be changed.
Conclusion
Some of the most effective means of reducing the number of
uninsured individuals in this country do not involve fundamental
changes to our health care system. Other than as a citizen I have no
stake in maintaining any aspect of our current system of health care or
health insurance but even a cursory review of the data on health
insurance coverage suggests that some of the major factors contributing
to the lack of health insurance are not simply the result of
fundamental flaws in our health care system. To maximize public
benefits while addressing declines in health insurance we ought to look
for opportunities to provide more than insurance to the individuals who
lack coverage.
Increasing high school graduation rates is one way to dramatically
reduce the future incidence of individuals without health insurance, at
the same time it will increase economic opportunities for individuals,
increase public benefits and reduce public costs.
Chairman MCDERMOTT. Thank you very much, Mr. Gottlob.
Perhaps you're a good segue into what my real question to
this panel is. You say let's increase the number of people who
finish high school. That will knock off ``x'' millions of
people off the 47 million, or whatever the number is, that are
uninsured. We really, I'm sure, don't know what the number is,
but let's say, some 4.7 million. Then I look at Ms. Collins'
report here, Dr. Collins. They say, well let's allow States to
extend eligibility to Medicaid; and let 17 States redefine the
age at which a young adult is no longer dependent, and they
want older people to buy into Medicare and the 2-year waiting
period and other SSI. To me, what I'm hearing is bandaids here.
Now, how many, if you took all those people, and I'll let
you, Dr. Collins, be the one to start. If you took all the
people that you suggested we do, all the things you suggested
we do, these bandaids of these various parts of the system, how
many people would we take out of the 47 million who are
uninsured?
Ms. COLLINS. How many people? I mean, I think the State
Children's Health Insurance Program and the Medicaid program
are good examples of what happens when you just cover certain
parts of the population. You have a lot of people that drop
off, because they don't re-enroll, that don't know that they're
eligible. So, you really do need more of a universal system
where people are automatically enrolled through the tax system,
for example. So, I think the bandaids that we suggest are in
absence of a more universal system, but I think the most
efficient approach would be to put everybody into the system.
But I think the bandaid approach is an alternative to build in
that direction.
Chairman MCDERMOTT. I mean, if you're taking these people
and trying to cover the ones, you would keep the Medicaid
system separate from Medicare and just keep adding into each of
the systems. How do you look at that? Is that the best way to
do it?
Ms. COLLINS. I think the best way to do it is to cover
everybody. I think if we're thinking in terms for budgetary
reasons, for political reasons of building toward universal
coverage, you could start on these public insurance programs
that work so well: the Medicaid program, the Medicare program,
the State Children's Health Insurance Program. Bring in the
employer system as a piece of this and build toward universal
coverage over time.
Alternatively, we could do what others have proposed and
expand the Medicare Program to everybody. I think the analysis
that the Commonwealth Fund has done has really shown that this
is the most efficient way in terms of saving overall health
care costs, insuring everyone so they don't lose coverage, that
they have stable coverage over their lifetime. But if you're
looking toward building toward universal coverage at an
incremental way that moves toward universal coverage, these are
suggestions for that.
Chairman MCDERMOTT. In a public policy way, which one of
these would you do first?
Ms. COLLINS. You know, it's so hard to say, because people
are so much in need in each of these groups. Young adults, an
example that Ms. Johnson gave about her life, is just
extraordinary to listen to. So, how can you decide which
vulnerable group you ensure first.
Chairman MCDERMOTT. You don't think a 59-year-old auto
worker who retires and is in the retiree program is more
important than Ms. Johnson?
Ms. COLLINS. I think it's hard to decide that. I think
that's why it would be more equitable to ensure everyone at the
same time.
Mr. POLLACK Mr. Chairman, I think there's a general
misunderstanding about the scope of public coverage, and I'm
not suggesting that everything be achieved through public
coverage changes. There is going to have to be some
accommodation of both public and private sector coverage.
I want to go over, however, what I think is a mythology
about public coverage. There's an assumption that anyone who's
poor is going to have health care coverage, because we have a
safety net, such as Medicaid. It's just a fallacious
assumption. We treat people very differently based on their
family relationship status. Take three different groups as an
illustration: children, the parents of those children, and non-
parental adults.
For children, we cover children in virtually every state,
if their family incomes are below 200 percent of the Federal
poverty level. At least they're eligible. They may not be
enrolled, but they are eligible for coverage in virtually every
State, if they are in families with incomes below 200 percent
of poverty--roughly $34,000 in income for a family of three,
$41,000 for a family of four. Some States go higher, and,
obviously, there is a debate about how high it should go.
With respect to parents, the median income eligibility
standard for the safety net Medicaid program is today 69
percent of the Federal poverty level. It is one-third of what
it is for children.
For non-parental adults, such as the person you were
talking about if that person is single or doesn't have any
dependent children right now, the situation is most
problematical. In 43 States, you literally can be penniless and
you are ineligible for public coverage. So for a lot of people
and families that are poor and need help and need a safety net,
they currently do not have alternatives, because they're
ineligible for public coverage.
Then you get to the question of enrolling people who are
eligible, but you have today a system of eligibility, which
actually has its roots, believe it or not, in the 16th Century
Elizabethan ``poor laws'' of England where they said in order
to get welfare you had to be poor and to also meet some
deserving category.
We have that today with respect to Medicaid. As a result,
people who are poor, if they don't fit one of these deserving
categories, are ineligible for safety net coverage. That should
be changed. That should be a high priority.
Ms. JOHNSON. I just want to say this on behalf of youth and
foster care, and this is me just pouring out my heart. Your
health to become a success is very important to become a
successful adult; and, there are already so many negative
statistics that are placed on youth and foster care.
When I was traveling over the summer as a foster club all
star, I learned that when they did research last year that 27
percent of youth in foster care end up incarcerated. 52 percent
end up homeless; 35 percent end up pregnant. Me being a former
foster youth, knowing why, I committed. A lot of people
wouldn't believe it, but I got in a lot of trouble. I wouldn't
call it criminal, because I never was arrested. But part of the
reason was because I didn't get to seek the counseling that I
needed for the traumatic experiences that I experienced.
So, as not giving myself an excuse, but as an outlet, I did
things that were horrific, or things that weren't great. But I
had no outlet and I was told I couldn't go see a counselor and
I couldn't talk to anyone, because you had to pay for it. I
didn't have Medicaid, so I couldn't pay for it. Even some of my
peers now are getting pregnant, because when they get pregnant,
it's almost like putting themselves back into the system,
because they know that even after they have their baby for a
certain amount of time, they can still have medical coverage or
medical insurance. That's one of the things that they talk
about that I've witnessed them talk about while being pregnant:
``Well, at least I have medical coverage.'' So, my question to
them was, okay. You're pregnant now as a way for you to still
continue to keep medical coverage after you had this child.
I feel like all the statistics that are already placed on
my population are feeding into each other. Like, if I don't get
the counseling that I need for the stress disorder and
everything else that I have, I am liable to commit a crime.
Because I am liable to drop out of high school and if I am
homeless and I am not in school, of course I am not working. I
am unemployed. So, there go all those negative statistics back
on my population again. I feel like for me, I was very
vulnerable.
Of course, I was taken away from my grandmother and put
into foster care. I was young at the time and I didn't have any
choice. I feel like now that I've aged out of care, I am paying
that price. I feel like it's not fair that I can't qualify for
health care and I can't say anything. Youth that do have their
biological parents, they are allowed to stay on their parents'
health care insurance until age 24, as long as they're still in
college. I feel like the State became my parent, so shouldn't I
be provided with the same equal benefits as youth that have
their biological parents?
I'm not 24. I'm 22, and I still can't get health care. I'm
still sick to this day from the condition that I stated
earlier, because it lingers on for so long as a result of me
not having medical insurance. You know if you're sick and it
lasts so long, it starts to damage other things. That's why I'm
still sick to this day, because it's a long process of healing
the condition that I have, because I waited so long to get it
treated, because I did not have medical insurance.
I was told, ``why don't you just be like regular people and
go get on insurance?'' Okay. I'm a college student. Nobody is
helping me. I don't have any parents. I can't call home like
most people and say, I'm sick, or I need this. I have to do it
for myself, so do you honestly think I can afford to pay that
high deductible? I've tried, because I don't want to be the one
to bring myself back into the system after I have already
exited it.
So, I have tried other means. I work. So, I have tried to
go to the doctor's office and pay the amount there is to pay,
but I found myself having to pay like $250 that I did not have
just to go to the doctor. So, I found myself doing what most
people do, just don't get it treated. Because the bills at the
emergency room are just so expensive, and I know that I cannot
afford them. So, I just allow this illness to linger on,
because I had no way to pay for it. I feel like we are very
deserving of this help, because we have been through so much
already and there is nobody there to help us once we age out of
care. There is nobody there.
Chairman MCDERMOTT. Thank you.
I am going to move to Mr. Herger. I've gone way over my
time. So, Mr. Herger, you are open.
Mr. HERGER. Thank you, Mr. Chairman.
Chairman MCDERMOTT. We won't turn the clock on just yet.
Turn the clock off.
Mr. HERGER. I want to thank each of our witnesses this
morning. Ms. Johnson, I particularly want to thank you.
All of us on this panel that are in this room are very much
aware of the percentages and what they are against someone in
your position that grew up in your circumstances. To see you
out there, even though you are struggling, obviously you are by
every standard definition, you are on your way to being a
successful person. You really are right now, and I want to
commend you for what you're doing. I also want to commend you
for being a role model. I commend you for going out and being
this all-star and talking to others and doing what you're
doing. I want to encourage you to continue on the path you are
and bringing this to our notice.
It's a big challenge we have, as each of you know. It is a
big challenge. I think each and every one of you have brought
up some very important points--47 million Americans without
health care. What do we do about it? There is a big move to
perhaps, we said, socialize it completely. Everybody has health
care. I mean, this is ideal, but in reality, we can't pay for
what we currently have, as we are aware.
Medicare is going broke now, faster than social security;
and, so how do we get to where all of us agree we need to be?
But from a practical standpoint in a nation that is in debt,
how do we get there and get there efficiently, and how do we
have a system that works? We've seen socialized medicine around
the world. We see the Canadians. We see the long lines they
wait in and how they come down here. That, I don't think, is
the answer. I don't have the answer here, and Mr. Pollack I
appreciate what you said, I think that we have to have a
combination of both the safety nets that would help the
individuals like Ms. Johnson and others who don't have it, or
the 59-year-old person that the Chairman was talking about.
Yet the private sector can help pay for it where we can.
One of the ways to do that, I think, is a problem that you
pointed out, Mr. Gottlob, is if someone doesn't have the
education. You are in the process of getting that education Ms.
Johnson, and the road you are going down, eventually you will
get it. Probably most of us on this Committee, if not every one
of us, has been somewhat where you are going through school,
being broke, struggling, working hard, investing today for
getting something tomorrow, the American dream type of thing
that you are in the process of living right now.
You will be getting the dividends down the line and giving
an example how to do that. I think the real problem, one of the
major problems, is getting our young people through high
school. Because if you don't get through high school, then you
are thrown into the system that you were describing where there
is virtually no hope. People won't hire you. It's tough enough
to be hired if you have a high school education, let alone not
a high school education at all. If we are looking at first
steps or some of the most important first steps, I believe this
idea of at least getting our young people, and those who do not
have the blessing that have the parents--it sounds like you
have a grandmother--how do we help you get through high school
and how do we make sure that you have the health care you need
in the process?
Mr. Gottlob, in your studies, have you seen any programs or
suggestions on how we can ensure that others like Ms. Johnson
that are in that position can make it through the first step of
high school, and then maybe college, but for sure at least high
school?
Mr. GOTTLOB. I think that there are a number of programs
that are proving their worth in reducing the dropout problem. I
categorize, basically, two broad categories. There's the very
big kind of reforms, the broad categorical reforms, which
include things like early intervention in young people's lives,
even at the preschool age. Those programs take a long time to
evaluate and study. We really haven't gotten to the point yet
that, you know, there's definitive studies, but I think those
are very encouraging.
There's other activities providing different kinds of
alternative education charter schools that open up alternative
ways for people to obtain an education who might not fit into
the very narrow structure of many of our public schools. When
you look at the population of dropouts, however, one of the
things that you see is that there are many reasons why people
drop out. There's a tremendous variety of reasons, so I think
that there's a lot of tactical programs that are proving very
successful.
There are things like, one of the things that is very much
associated with dropouts is lack of success in the ninth grade,
the very first year of high school. A lot of school districts
are instituting what are called academies that are basically
smaller schools within a larger school environment, makes it
feel like a smaller school. Students within that ninth grade
are allowed to choose which of the academies. It functions in a
way that makes kids successful in that initial first year.
That's proven very successful.
You know, vocational education has gotten a bad name in a
lot of ways. Everybody is striving for a higher education and
beyond, and that's a noble goal. So vocational education has
seen a decline, and one of the things that that's done is I
think it has pushed a lot of what I like to call kids at the
margin out of our schools who in my State, where a lot of our
population of dropouts are young males who are marginally
attached to their school, who because of low unemployment rates
in my State, see an $8 an hour job as a great opportunity to
leave school. Well, $8 at age 16 doesn't look so good when
you're 30 and you've got children.
Those students at the margin, if they had the opportunity
to maintain some attachment to the labor force within a program
of vocational education that allowed them to learn some trades,
some occupations, along with a core academic curriculum I think
has proven successful in the limited instances where it's been
instituted.
Those are just a couple of examples. There are many. The
key message is that I think that the ways in which we will
accomplish this goal will be as varied as the characteristics
of the population that is dropping out, but there are real
opportunities.
Chairman MCDERMOTT. Thank you. Mr. Lewis will inquire.
Mr. LEWIS. Thank you very much, Mr. Chairman.
Again, I want to thank each of you for being here. Ms.
Johnson, thank you for your testimony. Thank you for pouring
out your heart and telling your story. I don't understand when
someone discovers a health condition and you don't have the
money; how do you pay for seeing a doctor? What was it like?
What do you get the resources from? Or you just didn't go and
see a doctor?
Ms. JOHNSON. Actually, I just go give you a brief note of
how it happened. Like I said, when I first realized that I was
sick was my sophomore year of college. You know, it was
something that was so simple when I finally figured out what it
was. If I had been going to get the yearly physical exams, then
they would have been able to detect it a lot earlier.
What made it stressful was actually figuring out who to
reach out to and tell them what was going on with me, because
like I said, I didn't have an adult or somebody in my life at
that time I could call it, ``Hey look, this is what's wrong
with me. What do I do?'' Once I reached out to the Georgia
Department of Human Resources, there was some ladies that
worked with me. Once I reached out to them and told them what
was going on, ``Okay,'' they said, ``the next step is to figure
out how we can get you taken care of.''
So, Grady is a well-known hospital in Atlanta. We contacted
Grady and they told me that they could put me on a waiting list
to be seen. I was like, okay, so I did sign up for the waiting
list to receive the appointment. But I never got it, I guess
because of them just having so many people on the waiting list.
I contacted some local OB-GYN clinics right there in the
county which I lived in, and the payment just to come in for
that one day was so much. That's where I got the estimate of
around $250, because that's how much they wanted just for that
1 day. At the time I was in between transition in school, so I
wasn't working as much. So, I didn't have the money.
So, the next step was to try to find a local health
department. The one in Clayton County, which is where I live
now, where I'm going to school at Clayton State University, was
the one where I would literally have to get up early in the
morning at like six. Someone from the Georgia Department of
Human Resources would come and pick me up, because I didn't
have a car at the time, and take me to that facility. There
were already, believe it or not, they didn't believe it when I
told them that there were already people there waiting at
seven, that early in the morning, so they took me themselves so
that they could see that that was the issue.
We got there and there were literally already a lot of
people waiting to get into this particular health department. I
went three times, and all three times I was not able to be
seen. They would tell me that they didn't have enough nurses
there that day for what I needed. They couldn't do it. So I was
turned away then.
So, then I realized that when I was getting my associate's
degree, there was a health department there. It was an hour and
a half away from which I lived. So, I finally called them. They
were like, Ms. Johnson, we know you don't live in our county,
but just go ahead and come in. If you're that sick, just go
ahead and come in. When I came in, it was the most embarrassing
experience of my life, because the doctor looked at it. She was
like, ``How could a person get this sick? How could you let
your condition wait this long until where you are this sick?``
That was the most embarrassing day of my life. They gave me
almost every antibiotic you could think of, and I still had the
problem. I didn't know how to explain to this lady that I
didn't have health insurance and that I didn't know who to go
to. Then I tried to contact all the places around me, and
nobody was helping me. I didn't have the money, and finally the
State of Georgia did pay for me to go. But even they were still
having problems with getting me the medical attention. This was
the Georgia defects that I reached out to that even they could
testify to was that it was still difficult getting me treated
without their health care insurance.
I tried to even reapply to see if I was still qualified for
Medicaid, and I couldn't. I even tried to reapply at 19, and
they said I was still ineligible. Right now, the Jim Casey
Youth Opportunity Initiative Program called the Metro Atlanta
Youth Opportunity Initiative, they have a door opener called
Kaiser Permanente where you can pay $20 a month for full
coverage. When I first came to the Atlanta Metro area, they had
a freeze on the program because they had already accepted so
many people into the program, so at that time I could not get
in. But they have now reopened Kaiser Permanente. They offer
backup, and I'm now in the process of applying for that.
The only thing is since I've had the reoccurring condition
for so long, that's one of their requirements, that you not
have a condition that you've already had long-term before
enrolling. So, then, there I go again, back into where I
started from.
Mr. LEWIS. Well, thank you, Ms. Johnson. My time is running
out. Before you leave, we should get your number to one of my
staff persons and we'll try to do what we can in Atlanta, and
Clayton County ought to be of help to assist you.
Mr. Chairman, could I just ask another question?
Chairman MCDERMOTT. Yes.
Mr. LEWIS. Not of Ms. Johnson, but thank you so much.
Mr. Pollack, thank you so much for this unbelievable data
that you provided in your testimony and also in your report. It
is my hope that maybe in 2009, or someplace down the road, that
you would come back and testify again, and we could maybe get
the ball rolling toward some comprehensive health for all of
our citizens.
I happen to believe that health care is a right and not a
privilege. It doesn't matter that you live in this country; you
should have it. I would like for you to respond to some of the
generalization that Mr. Gottlob made concerning Hispanic and
African-American that happen to be, maybe, uninsured. I didn't
quite understand where he was going. Maybe he can explain it.
But if you could, deal with it?
Mr. POLLACK Let me refer to some numbers that are in the
report that you just referred to. I said to you earlier in my
testimony that, over the course of the last 2 years, 89.6
million people were uninsured at some point in that 2-year
period. Now, all of these people are under 65 years of age,
because if you are 65 years of age or older, you are eligible
for Medicare. This constitutes a little more than one out of
three non-elderly people, it's 34.7 percent of people under 65
years of age.
But getting to your question about the effect in terms of
racial disparities, we broke this down from the Census Bureau
data in terms of non-Hispanic whites, non-Hispanic blacks, and
Hispanics. The percentages I'm going to give you are all
percentages for people under 65 years of age. For non-Hispanic
whites, 26 percent of the population under 65 years of age, a
little more than one out of every four people, were uninsured
at some point over the prior 2 years. Among non-Hispanic
blacks, the percentage of people under 65 years of age who
experienced a lack or loss of health insurance was 44.5
percent. Among Hispanics, the percentage was 60.7 percent. In
other words, more than three out of five Hispanics were
uninsured at some point over the last 2 years.
So, even though as my colleague on this panel indicated,
about half the uninsured are white, non-Hispanics, the
likelihood of being uninsured is very different, based on race
and ethnicity.
Mr. LEWIS. Do you subscribe to the idea of the concept that
everybody, every person, every human being that lives in
America should have health care?
Mr. GOTTLOB. I certainly think everybody should be able to
avail themselves of the same health care opportunities that are
available to everyone else. Representative Lewis, I just want
to make it clear that when I cited those statistics, what I was
trying to do, and I mentioned this in follow-up, is to note
that one of the things that characterizes those numbers is a
high percentage of demographic groups that have very, very low,
or lower rates of high school graduations--Hispanic population,
African-American population. So, I was trying to draw the
connection between insurance coverage and graduation.
So, that was the purpose. Certainly not, and when I talk
immigration I certainly didn't want to, and I mention this, fan
the flames of the immigration debate. That's not the purpose.
There's tremendous heterogeneity in the data, but there is one
kind of common theme, and one of those big themes is a lack of
educational attainment. That is a very big predictor.
Mr. LEWIS. Isn't it in the best interest of the health of
all of our citizens, of all the people that live in this
country, that everybody should have health care?
Mr. GOTTLOB. Absolutely. Absolutely, and one of the reasons
why I stress graduation rates so much is that you can provide
everyone with health coverage. If you do that, it still won't
put food on the table. It still won't pay the rent.
Mr. LEWIS. But a lot of the people without health care,
they're working people. They work every single day. Every
single day they get up, they go to work, but they cannot afford
health care.
Mr. GOTTLOB. Absolutely.
Mr. LEWIS. The working poor.
Mr. GOTTLOB. By increasing the educational attainment, they
will be better positioned to meet those other needs in addition
to health care. That's really the point, that there are
tremendous synergies between educational attainment, coverage
of health care, and the resources, assets that individuals and
families have, and the resources that ultimately are available
to this government to address some of the issues in health care
that aren't solved by increasing educational attainment.
Mr. LEWIS. Thank you, Mr. Chairman.
Chairman MCDERMOTT. Yes, Mr. Camp.
Mr. CAMP. Well, thank you. I appreciate all the witnesses
for being here.
As many others have said, much of what we are talking about
is not in the jurisdiction of this Subcommittee, or, frankly,
in the jurisdiction of the Committee on Ways and Means. If we
were the Commerce Committee, we might be able to do something
about some of these issues.
But I do think that in the CRS report that I had introduced
into the record there are demographic characteristics in terms
of health coverage by type. 35.6 percent of the uninsured are
Hispanic, according to CRS, the Congressional Research Service;
21.7 percent are African-American; 12.5 percent, white. So,
this does disproportionately affect certain populations in the
United States. I think having that information before the
Subcommittee can only be helpful in terms of trying to find
solutions.
But, as we talk about this issue, it seems to me that if we
were to adopt many of the ideas being suggested by several
witnesses to expand Medicaid, expand SCHIP, we would still not
impact the high school dropout rate. That number would still
stay the same, would it not Mr. Gottlob?
Mr. GOTTLOB. That's correct. There would not likely be a
change. There isn't any research to my knowledge that indicates
a relationship between health care coverage providing provision
of health care coverage and a reverse in terms of increasing.
Mr. CAMP. So, we'd still have elevated rates of poverty and
unemployment and far less lifetime annual earnings than
individuals who have more education. Is that correct?
Mr. GOTTLOB. There clearly are benefits to families who are
not insured to receiving when they receive insurance. There can
be reduced expenditures on their part, but it doesn't
fundamentally for the most part change their earning capacity.
So, their situation, whether they're skilled or unskilled,
their educational attainment isn't fundamentally changed. Now,
are there instances where it could be? Yes. But in the
aggregate, it doesn't fundamentally change the resources,
intellectual and otherwise that are available to individuals
and families to make their lives better.
Mr. CAMP. You mentioned on page 7 of your testimony, there
are a number of initiatives that show promise for increasing
high school graduation rates.
Could you just list several of those initiatives for us?
Mr. GOTTLOB. Yeah, I think. You know, alternative education
at the high school level, kids who are at risk of dropping out,
there are alternative schools that can help graduation rates. I
mentioned the problem, I think. One of our big problems in the
educational system is the segregation of our public education
according to income and educational attainment of the parents.
Mixing and breaking up some of that segregation I think will
have profound impacts on educational quality and ultimately
graduation rates. There are some tactical measures that I have
talked about in terms of specific district-level kinds of
initiatives that I think show promise.
There is a laboratory of school districts out there, and
States that are doing innovative things and improving, in my
State I know, improving graduation rates. When they do that
they provide additional benefits to all of us, and that is the
point of my testimony.
Mr. POLLACK Mr. Camp, I share my colleague's enthusiasm
about equal educational opportunities.
Mr. CAMP. By the way, that is not in the jurisdiction of
this Committee either. If we were on Education and Labor, we
could talk about that issue.
Mr. POLLACK I understand that. But I must take issue with
the notion that the provision of health care is largely
irrelevant to educational attainment. That's just false.
If a child doesn't get a check-up and that child has a
vision problem, or that child doesn't get a check-up and that
child has a hearing problem, those things are not going to get
corrected. How is that child going to get a decent education?
If a child can't get check-ups and get basic health care
provided to them and they're absent from school, how does that
not affect their educational attainment? There is a real
correlation between the provision of health care and
educational attainment and general development.
Mr. CAMP. Thank you for that comment.
My time is about to expire, but in your testimony you
mentioned that coverage of children was almost universal in
this country.
Mr. POLLACK No. No, wait a minute.
Mr. CAMP. It is.
Mr. POLLACK No.
Mr. CAMP. It's my time, sir, and thank you for your
comment. I do have another question I want to ask Dr. Collins.
You had mentioned expanding Medicare so adults 55 to 64
could buy into it. That is in the authority of this Committee.
How much would something like that cost and would premiums
cover the full cost to taxpayers for all people covered? Would
those premiums be means tested in some way? If you could
describe in greater detail that idea, that thought.
Ms. COLLINS. Okay. Just one additional comment on this. The
IOM has estimated that people lose between $65 Billion and $130
Billion each year collectively, because they don't have health
insurance coverage. That includes lost productivity, earnings,
and lost educational achievement.
Mr. CAMP. Missing work and missing pay.
Ms. COLLINS. Well, human capital development, educational
attainment was one of the things that the IOM identified. So,
there really are some costs.
But anyway, on the issue of the Medicare buy-in, the
Commonwealth Fund did an analysis of a bill that was introduced
by Congressman Stark about the Medicare buy-in, and we looked
at the details of that plan with the Lewin Group. I would have
to go back and look at the data and get back to you. But I
believe we were thinking it looked like it was on the order of
$26.9 billion a year in Federal costs, but I'd have to look
into that.
Mr. CAMP. I realize I maybe caught you off-guard on that,
but if you could supply that later, I certainly would
appreciate it.
Ms. COLLINS. Sure, happy to do that. I think that also we
would want to think about what that benefit package would look
like. Would we want to make it look more like the Federal
employees health benefits plan, for example, and also to make
it affordable, to make the premiums affordable for lower
income, older adults who really do comprise the majority of
uninsured older adults as they do the majority of people who
are uninsured in the United States?
Mr. CAMP. All right. Thank you.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Thank you. Mr. Davis?
Mr. DAVIS. Thank you, Mr. Chairman.
All of us are under tight time constraints, because there
are votes.
Mr. Pollack, Mr. Camp did not seem to be terribly
understood on the answer to his questions. I want to give you a
chance to answer it now.
You were talking about the number of uninsured children
that continue in the United States. Would you just elaborate
what those numbers are?
Mr. POLLACK Well, sure. There are approximately nine
million children in the country who are uninsured, and of that
number approximately two-thirds, about six million, are
actually eligible under the current eligibility standards
established by the States for SCHIP.
Mr. DAVIS. That would be typically 200 percent of poverty.
Mr. POLLACK That's right. That's right.
Mr. DAVIS. Which would be, for example, in my State that
would be roughly $41,000 for a family of four.
Mr. POLLACK Correct. $34,000 for a family of three. That's
right. The overwhelming majority of States are at approximately
that income eligibility level.
Mr. DAVIS. So, just to make sure everyone in the room who's
interested gets that point, two-thirds of the uninsured are
eligible for the SCHIP program. They just simply haven't had
the opportunity or the informational resources to take
advantage of it.
Mr. POLLACK Or the States have not received sufficient
funds to enroll them. We're just seeing what's happening, for
example, in California. California is telling us that if we
essentially keep the same funding level for the SCHIP program
as we had in the previous year, they're going to cut-back
children who are currently in the program.
Mr. DAVIS. I would submit that that's the case in Alabama.
It's the case, I think, in the States of virtually every single
member of this Committee.
I move to my second observation. One of the problems I
think that we have, Mr. Pollack, and I think you would agree
with me on this, as we try to fashion the political will,
because frankly it is not that we are not smart enough to
figure out how to address the health care problems, there are a
range of things that we can do.
Dr. Collins pointed out some of them. You pointed out a
number of them. Mr. Gottlob pointed out a number of them. Ms.
Johnson pointed out a number of them. There are a range of
things that we can do. This is not beyond our intellectual
capacity. It's not too big a problem for us to get our hands
around. This is not rocket science. The problem has, frankly,
been one of political will.
One of the reasons I think we struggle to garner the
political will is because of some of the misinformation that
lurks on the other side of this argument. I am troubled when I
hear the President of the United States suggest that there's a
significant portion of people who are affluent, who have
resources, who just elect to be free riders, who elect to
essentially be uninsured and let the emergency room take care
of them. There's some whiff of that in his rhetoric, even when
he talks about the SCHIP program.
When I listen carefully to what he says, I hear something
in his rhetoric that suggests that, well, the people who really
need it get it. There's a group of folks who don't really need
it that the liberal democrats are now trying to push into the
program.
Do you hear something of that in his rhetoric, Mr. Pollack?
Mr. POLLACK Well, of course. The President has said
everyone gets health care. You know, of course, they can go to
an emergency room. Well, come to the emergency room and take a
look at the care that people receive, people having to wait in
line. This is the most expensive form of care.
So, there's a huge disparity in terms of the care people
get when they're insured versus when they're uninsured. I wish
frankly that the President would adhere to his own message that
he gave in Madison Square Garden in 2004 when he accepted the
Republican nomination for President. Then, he said, ``we've got
millions of children who are eligible who are not currently
enrolled. My administration is going to reach out to those
folks and get them enrolled in public coverage.'' Now
unfortunately the President, who has had the opportunity to do
this, has turned his shoulder.
Mr. DAVIS. Just to add to that point, the former Mayor of
New York, Mr. Giuliani, who I think has some interest in
getting the job himself, has made some misstatements I've heard
in debates.
He during one debate suggested there was a significant
number of people who just don't want to get health insurance
and that they're basically just careless individuals. I thought
he overstated that point.
The last observation I'll make, Mr. Pollack, is thank you
for making the observation that the scope of public coverage is
weaker than most Americans believe. In my State of Alabama, the
only way you are eligible for Medicaid is if you have
dependency with 133 percent of poverty. You can be, as you put
it, stone, cold broke. You can be penniless and be a 21-year-
old woman who is working at a convenience store who doesn't
have a dependent, and you are ineligible for Medicaid in the
State of Alabama and a number of other States.
For some reason, there's a myth that some on the right take
advantage of that. Well, there's some program out there that
will reach out and act as a safety net for many of the poor and
the uninsured. The actual scope of Medicaid coverage is far
weaker than many people believe it to be. We need to, I think,
begin to look at underwriting a much stronger floor for the
Medicaid program.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. We've got about 5 minutes left, and Ms.
Berkley, if you could maybe lean just a little bit for the
gentleman to your right.
Ms. BERKLEY. Okay. Nudge me, if I go on too long.
I'm sorry I wasn't here at the beginning. I had to testify
in front of another Committee, but what I did here I thought
was profoundly moving. Ms. Johnson, one thing that you said is
so right.
If you are a ward of the State, when you age-out of foster
care, the least the State could do is provide health insurance
for you. When my kids were 18 they were no sooner ready to age-
out of my home than the man on the moon. If they didn't have a
home to go to and parents to take care of them, I'd hate to
think where they'd be right now. so I want to applaud you for
everything you have done. But that's what we should be doing,
making sure that we take care of that gap in between aging out
and being 24 years old.
The other thing, and I want to make sure that I do get this
in, Mr. Chairman, for high growth areas like my State.
Everything we've discussed including SSI, ineligibility, and
waiting times, are exacerbated because we have a lack of staff,
a lack of ability to get this done, and far too many people
needing the services.
So, for the two and a half years average, I guarantee in my
community and my district, people are waiting three and a half
years, because of the backlog. Let me mention what is going on
very quickly, and then I'll hand it over to Mr. Van Hollen.
I visit my schools in the underprivileged, if that's the
right word, areas in Las Vegas, which is a pretty affluent
place, and we've got high employment rates. But I've got a huge
dropout rate. I'll tell you this. When these kids go to school
in these disadvantaged areas, they come with no breakfast.
They've got a mouthful of cavities. They are sick as dogs. They
should be home, but there's nobody home to take care of them
because their parents are working at jobs that don't provide
health coverage. Half of them come from non-English speaking
families, and quite frankly, as a parent I don't want my kid
sitting next to that child. That child needs to have care, and
that's why that SCHIP program is so terribly important.
It's no surprise to me that we have a high dropout rate,
because once you go through that in your initial years and you
never catch on, by the time you are in the ninth grade, you
want out. As soon as you turn 16, you are going to find an
alternative way of spending your time, because school isn't it.
You are absolutely right, Mr. Gottlob, that's a huge
problem for this country, because we can't afford in the 21st
century to leave anybody behind. But I think it starts early,
much earlier than high school. It starts not only with
nutritious meals and a stable family environment, if we could
make that happen, but good quality health care to take care of
these kids.
Chairman MCDERMOTT. Mr. Van Hollen?
Mr. VAN HOLLEN. Thank you, Mr. Chairman.
Chairman MCDERMOTT. You can take this as far as you want.
Mr. VAN HOLLEN. Thank you, Mr. Chairman.
I will be brief, given the bells that just went off. I just
want to thank all the witnesses for being here. As our
colleague Artur Davis said, providing health coverage in the
United States, universal comprehensive health coverage, is a
matter of mustering the political will to do it. I hope that
after the next presidential elections we'll be able to come up
with a plan as a country that will address all of our people.
In the meantime until we get to that point, we have to
spend our time trying to fill the gaps, and that's obviously
what we are focused on today. I want to float one proposal that
we have put out there in the form of legislation. Mr. Pollack,
I want to thank you and Families USA for supporting it. I bring
it to the attention, briefly, of others on the Committee and
the panel, if you are not.
Under the Medicaid program, states can ask for a waiver to
include non-Medicaid individuals within a prescription drug
program. In the State of Maryland under a former Republican
Governor, former member of this body, Mr. Erlich, and a
Democratic legislature, sought a waiver from the Administration
to say the State of Maryland would like to include individuals
up to 300 percent of the Federal poverty level in their
bargaining pool when they bargain for prescription drugs under
the Medicaid program. That would have the benefit, number one,
of covering a lot more people, up to 300 percent of poverty,
which is where we are talking about the SCHIPS program being
right now. It would cover the kind of people Mr. Davis was
talking about, the woman who worked at the convenience store
who is not eligible for Medicaid and is struggling to pay the
high costs of lots of health care, including prescription
drugs.
It wouldn't cost the Federal Government a dime, and you'd
cover a lot more people. I wondered if you could just comment
on it, Mr. Pollack, and if others are familiar with this
particular gap filler.
Chairman MCDERMOTT. One minute to vote.
Go ahead.
Mr. POLLACK As you correctly indicated, we support the
legislation. Maine has also tried to do something very similar.
I think it would help both those currently on Medicaid and
those not on Medicaid. It would create a larger bargaining
pool, and, as a result, the State would be in a stronger
position to bargain for cheaper prices.
So, I think it would be good, not just for current Medicaid
beneficiaries, but the particular target of the legislation:
those who are not eligible, and who really need help. They
could get help. So, we think it's a very constructive proposal.
Chairman MCDERMOTT. Thank you very much. Thank all the
members of the panel, particularly Ms. Johnson for coming and
doing this. But all of you, we stand adjourned.
[Whereupon, at 11:32 a.m., the hearing was adjourned.]
[Questions for the Record follow:]
The Honorable Jim McDermott
Chairman
Subcommittee on Income Security and Family Support
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Chairman McDermott:
I am writing in response to your request for additional information
related to the testimony I provided before your Subcommittee on
November 14 during the hearing, ``The Impact of Gaps in Health Coverage
on Income Security.'' Once again, I wanted to thank you for the
opportunity to provide the Committee with information and
recommendations regarding promising policy solutions to address the
financial problems children and families face as they navigate our
health care system.
As President of First Focus, a bipartisan advocacy organization
committed to making children and their families a priority in federal
policy and budget decisions, I am heartened by your leadership on this
issue, and would like to thank you and mMembers of the Subcommittee for
bringing the important voice of children to the health care discussion.
Along with your questions, I am providing below the additional
information you requested in your letter of November 28th.
1. States currently have the option of extending Medicaid coverage
to former foster children up to age 21. Based on Ms. Johnson's
testimony, this would be of great help to former foster youth who
transition from care into adulthood. How many States are currently
extending Medicaid coverage to former foster youth? What more can
Congress do to help these vulnerable adolescents receive coverage?
In 2005, over 24,000 teens left foster care at the age of 18. The
range of services and supports available to children who age out of the
foster care system varies considerably from State to State. Sadly, most
teens aging out of care receive minimal services, and feel abandoned at
a time when they need a great deal of guidance and support.
The outlook for these kids is fairly grim. One in four will be
incarcerated within the first 2 years after leaving the system, and
over one-fifth will become homeless at some point. Only 58 percent will
obtain a high school degree at age 19--compared to 87 percent of non-
foster kids. These teens are also more likely to experience serious
mental health problems and to be involved in the juvenile justice
system. In fact, in a recent study of youth aging out of the Illinois
foster care system, caseworkers identified one-third of these youth as
having one or more significant mental health, medical, prenatal,
substance abuse or developmental needs. Other studies have similarly
found that large numbers of youth aging out of care have diagnosable
mental health disorders. For instance, a recent study by Casey Family
Programs found that 54 percent of youth have a mental health diagnosis
after leaving care.
Two key pieces of legislation, the Foster Care Independence Act
1999 (P.L. 106-169) and the Deficit Reduction Act of 2005 (P.L. 109-
171) have created a critical opportunities for States to extend
Medicaid coverage for youth who have aged out of the foster care
system.
The Chafee option, enacted through P.L. 106-169, allows States to
extend Medicaid coverage to former foster children ages 18 to 21, but
not enough States are doing so. A 2007 report by the America Public
Human Services Association (APHSA) found that since the enactment of
the Foster Care Independence Act, 17 States (CA, NV, UT, AZ, WY, SD,
KS, OK, TX, IA, IN, MS, FL, SC, NJ, RI, MA) have moved to extend their
Medicaid programs using this provision to provide care for youth aging
out. In addition, five States (NM, MO, WI, NC, MD) are planning to
extend their Medicaid coverage using the Chafee option. The report also
found that extending Medicaid coverage is in fact affordable using this
option.
While 22 States are (or will soon) extend Medicaid eligibility to
foster youth aging out of care via the Chafee option, the remaining 28
States and the District of Columbia use several other programs to
provide health coverage for youth aging out of the foster care system.
Several States have utilized section 1115 waivers under the Medicaid
program to extend care, while others offer former foster youth the
opportunity to qualify for additional benefits if they remain in care
or in an education setting.
For instance, in Alabama, a State plan category exists for foster
youth who remain in State custody (up to age 21) in order to retain
Medicaid eligibility. In Alaska--Denali KidCare--a program designed to
ensure that kids and teens in working and non-working families have
access to health insurance, is available to youth who are 19 years old
for a 12 month period (youth need to reapply for the program every 6
months). The State uses an 1115 waiver to extend the program. Alaska
also provides Medicaid to Alaskan Native youth who age out of the
foster care system through the Native Health Care Program. In fact, the
majority of Alaska's youth in foster care are Alaskan Natives, and they
have access to critical health care via this program. In Idaho, foster
youth are eligible to receive Medicaid until age 19 under title XIX
whether they exit or stay in continued care. After age 19, they may
still qualify for Medicaid if they fall under the TANF, SSI or
disability criteria. Lastly, in Kentucky, youth who age out of foster
care at 18 have a reduced benefit medical card that is valid until
their 19th birthday. These are just a few examples of State efforts to
piece together a health care system for youth aging out of care.
Unfortunately, there is considerable variability in access across
programs, and restrictions on eligibility. In addition, a number of
States only extend coverage for youth to age 19.
We believe that Medicaid coverage should continue for all youth in
foster care until at least the age of 21. Congress can help by enacting
legislation to do just that. A number of proposals, including the
Medicaid Foster Care Coverage Act (H.R.1376) and the Foster Care
Continuing Opportunities Act (S. 1521) expand eligibility for Medicaid
to foster care adolescents through age 21. We support such efforts to
expand coverage to youth aging out of foster care and believe that
federal policy is essential to ensuring continuity in care for
vulnerable adolescents.
2. I was interested in your testimony regarding the high rates of
low income children who are eligible for Medicaid and SCHIP but are not
currently enrolled in these programs. You noted in your prepared
statement that 62% of all uninsured children are eligible for, but not
enrolled in, either Medicaid or SCHIP. You reference a study showing
that 36% of those children were in families with incomes below the
poverty line and another 41% were in families with incomes of 100%-200%
of the federal poverty line. Obviously, we have some work to do. While
we are not here today to discuss SCHIP reauthorization, I would be
interested in your thoughts on why the SCHIP bill offers a greater
opportunity to enroll the poorest children first?
Over the last decade, SCHIP has amassed an impressive record of
success in providing cost-effective health insurance coverage for
children--increasing the number of children enrolled in the program
from 660,000 in 1998 to 6.6 million in 2006. At a time when the numbers
of uninsured adults has been on the rise, SCHIP has reduced the number
of uninsured children in our Nation by one-third.
Unfortunately, as I noted in my testimony, a large portion of those
children who are eligible for Medicaid or SCHIP remain uninsured. Both
of the Children's Health Insurance Program Reauthorization Acts (CHIPRA
I and CHIPRA II) (H.R. 976, H.R. 3963) passed by Congress this fall
included provisions that would provide critical assistance to States to
facilitate the enrollment of the very poorest of these children who are
eligible but not enrolled in Medicaid or SCHIP. Specifically, the
CHIPRA bills included two key provisions--to provide States with an
Express Lane Eligibility option and to provide grants to support State,
local, and community-based outreach and enrollment campaigns--which are
among the only new tools provided that would strengthen outreach and
enrollment efforts for this hard-to-reach population.
Express Lane Eligibility
Both CHIPRA I and CHIPRA II included Express Lane provisions that
would allow States to adopt simplified enrollment processes to
determine a child's eligibility under Medicaid or SCHIP. Under Express
Lane Eligibility, States would be able to expedite the enrollment of
currently eligible children by targeting outreach to those children who
are already participating in needs-based programs. It is estimated that
more than 70 percent of low-income, uninsured children are in families
that are already enrolled in the Food Stamp Program, the Women with
Infants and Children (WIC) program, or the National School Lunch
Program (NSLP). The idea of Express Lane is to give States the
flexibility to find a child income-eligible for Medicaid or SCHIP based
on the fact that they have already been found eligible for nutrition
assistance or other comparable programs that operate under similar
financial guidelines.
Express Lane proposals enjoy long standing bipartisan support in
both the House and the Senate. It was included in then-Majority Leader
Frist's child health bill during the 109th Congress, which the
administration supported, and bipartisan legislation (S. 1213) that was
introduced earlier this year in the Senate by Senators Bingaman (D-NM)
and Lugar (R-IN). The Express Lane Eligibility option is designed to
target the very poorest uninsured and eligible children who have been
the hardest to reach through other methods.
Outreach and Enrollment Grants
In addition, the reauthorization legislation allocates $100 million
for fiscal years 2008 through 2012 for outreach and enrollment grants,
with 10 percent of the funding dedicated to a national enrollment
campaign, and 10 percent for outreach grants targeting Native American
children.
According to the provision, remaining funds would be distributed by
the U.S. Department of Health and Human Services to State and local
governments and other community-based organizations, including safety
net providers, schools, or other entities best positioned to reach low-
income children through outreach campaigns. Most important, outreach
campaigns would be geared to rural areas and racial and ethnic
populations which are known to be underenrolled in Medicaid or SCHIP.
The legislation also provides an enhanced matching rate in SCHIP and
Medicaid for translation and interpretation services for families for
whom English is not the primary language.
The research is conclusive that that community-based organizations
are often best positioned to help identify families with children who
are eligible for coverage. This is particularly the case for minority
populations who are disproportionately represented among the ranks of
the uninsured.
We believe the enactment of these provisions would provide States
important new tools to reach eligible, low-income children who are not
enrolled in health coverage.
I hope this information is helpful and, once again, thank you for
the opportunity to testify before your Subcommittee. We are grateful
for your leadership in addressing the health care needs of our most
vulnerable children and families and we look forward to working with
you in the future to ensure better care for all of our nation's
children.
Sincerely,
Bruce Lesley
President
[Responses to Questions for the Record posed by Chairman McDermott
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[Submissions for the Record follow:]
Statement of Business Coalition for Benefits Tax Equity
Mr. Chairman, in conjunction with the Subcommittee's hearing on the
impact of gaps in health coverage on income security, the 44 members of
the Business Coalition for Benefits Tax Equity salute your leadership
in addressing an important health coverage challenge through
introduction of H.R. 1820, the Tax Equity for Health Plan Beneficiaries
Act of 2007. Enactment of H.R. 1820 would advance Congress's efforts to
eliminate gaps in health coverage.
Employers across the United States in increasing numbers have made
the business decision to provide health benefits to the domestic
partners of their employees. As of June 2007, 53% of Fortune 500
companies (266) are offering domestic partner health coverage, a more
than twelve-fold increase since 1995. These employers have recognized
that the provision of domestic partner health coverage is an essential
component of a comprehensive benefits package. This coverage helps
corporations such as those in our coalition attract and retain
qualified employees and provides employees with health security on an
equitable basis.
Unfortunately, federal tax law has not kept pace with corporate
change in this area and employers that offer such benefits and the
employees who receive them are taxed inequitably. This reduces the
number of individuals who utilize employer-provided health coverage.
Issues Under Current Law
Currently, the Internal Revenue Code (``Code'') excludes from
income the value of employer-provided insurance premiums and benefits
received by employees for coverage of an employee's spouse and
dependents, but does not extend this treatment to coverage of domestic
partners or other persons who do not qualify as a ``dependent'' (such
as certain grown children living at home who are covered under a
parent's plan or certain children who receive coverage through a
grandparent or parent's domestic partner). In addition, when
calculating payroll tax liability, the value of non-spouse, non-
dependent coverage is included in the employee's wages, thereby
increasing both the employee's and employer's payroll tax obligations.
An employee of median income level who receives employer-provided major
medical coverage of average cost for himself and a domestic partner
faces an annual tax bill of $4,710 in income and payroll taxes, $1,555
(or nearly 50%) more than that paid by a similarly situated co-worker
with spousal coverage. However, this employee has no additional income
to meet this higher tax burden. These higher tax levels can lead
employees to decline the domestic partner coverage altogether,
contributing to America's problem of the uninsured and to the gaps in
health coverage the Subcommittee is considering today.
The current inequitable tax regime also places significant
administrative burdens on employers. It requires employers to calculate
the portion of their health care contribution attributable to a non-
spouse, non-dependent beneficiary and to create and maintain a separate
system for the income tax withholding and payroll tax obligations for
employees using such coverage.
Employers such as ours that offer domestic partner benefits want to
end these tax inequities so that the benefits we provide help to cover
more Americans and so that all our employees are treated equitably
under the tax laws. Ending the tax inequities will also eliminate the
need for what are often complex communications to employees about how
the tax penalties operate. Finally, ending the inequities will allow us
to jettison the separate and burdensome administrative systems that we
must currently establish to track the income tax withholding and
payroll tax obligations for employees using domestic partner coverage.
H.R. 1820 Provides a Solution
H.R. 1820 would end these and other current tax inequities with
respect to employer-provided coverage for non-spouse, non-dependent
beneficiaries, such as domestic partners. Specifically, the bill would
make the following important changes:
1. The value of employer-provided health insurance for a domestic
partner or other non-dependent, non-spouse beneficiary would be
excludible from the income of the employee if such person is an
eligible beneficiary under the plan. Employers would retain the current
flexibility to establish their own criteria for demonstrating domestic
partner status. In a corresponding change, the cost of health coverage
for domestic partners or other non-spouse, non-dependent beneficiaries
of self-employed individuals (e.g., small business owners) would be
deductible to the self-employed person.
2. The legislation would make clear that employees paying for
health coverage on a pre-tax basis through a cafeteria plan would be
able to do so with respect to coverage for a domestic partner or other
non-spouse, non-dependent beneficiary.
3. Many employers, particularly in the collectively bargained
context, use tax-exempt Voluntary Employees' Beneficiary Associations
(``VEBAs'') to provide health coverage. Today, VEBAs are prohibited
from providing more than de minimis benefits to a domestic partner or
other non-spouse, non-dependent beneficiary.
The legislation would permit a VEBA to provide full benefits to
non-spouse, non-dependent beneficiaries without endangering its tax-
exempt status.
4. In contrast to current law, employees would be permitted to
reimburse medical expenses of a domestic partner or other non-spouse,
non-dependent beneficiary from a health reimbursement arrangement
(``HRA'') or health flexible spending arrangement (``Health FSA'').
5. The value of employer-provided health coverage for a domestic
partner or other non-dependent, non-spouse beneficiary would be
excluded from the employee's wages for purposes of determining the
employee's and employer's FICA and FUTA payroll tax obligations.
We look forward to working with you to advance this legislation and
applaud your inquiry as to how to address gaps in health coverage.
The Business Coalition for Benefits Tax Equity is a coalition of
employers that supports eliminating the federal tax inequities that
result when corporations voluntarily provide health care coverage to
the domestic partners (and other non-spouse, non-dependent
beneficiaries) of their employees. Coalition members are listed below.
Aetna
Hartford, CT
A.H. Wilder Foundation
St. Paul, MN
American Benefits Council
Washington, DC
Ameriprise Financial, Inc.
Minneapolis, MN
Bausch & Lomb Inc.
Rochester, NY
Best Buy, Co., Inc.
Richfield, MN
BlueCross BlueShield of MN
Eagan, MN
Capital One Financial Corp.
Falls Church, VA
Carlson Companies
Minneapolis, MN
Charles Schwab & Co, Inc.
San Francisco, CA
The Chubb Corporation
Warren, NJ
Citigroup
New York, NY
CNA Insurance
Chicago, IL
Corning, Inc.
Corning, NY
Coors Brewing Co.
Golden, CO
Cullen Weston Pines & Bach LLP
Madison, WI
The Dow Chemical Co.
Midland, MI
Eastman Kodak
Rochester, NY
EDS
Plano, TX
Ernst & Young
New York, NY
General Mills Inc.
Minneapolis, MN
Hewlett-Packard Co.
Palo Alto, CA
HSBC North America
Prospect Heights, IL
IBM Corp.
Armonk, NY
ICMA Retirement Corporation
Washington, DC
Intel Corporation
Santa Clara, CA
JP Morgan Chase & Co.
New York, NY
Levi Strauss & Co.
San Francisco, CA
Marriott International, Inc.
Washington, DC
Medtronic, Inc.
Minneapolis, MN
MetLife, Inc.
New York, NY
Microsoft Corporation
Redmond, WA
Motorola
Schaumburg, IL
Nike Inc.
Beaverton, OR
PG&E Corporation
San Francisco, CA
PricewaterhouseCoopers
New York, NY
Project for Pride in Living
Minneapolis, MN
Prudential Financial
Newark, NJ
Replacements, Ltd.
Greensboro, NC
Russell Investment Group
Tacoma, WA
San Fran. Health Svs. Sys.
San Francisco, CA
Texas Instruments
Dallas, TX
Time Warner Inc.
New York, NY
Xerox Corporation
Rochester, NY
Statement of Child Welfare League of America, Arlington, Virginia
The Child Welfare League of America (CWLA), representing public and
private nonprofit, child-serving member agencies across the country, is
pleased to submit testimony to the Subcommittee on Income Security and
Family Support. CWLA appreciates the opportunity to submit comments to
the Subcommittee on the vital issue of current gaps in health coverage.
We commend Chairman McDermott and members of the Subcommittee for your
attention to the increasing difficulty in obtaining and accessing
quality, affordable health care and the corresponding impact on
vulnerable populations, including children and youth involved with the
child welfare and foster care systems.
Health Care Needs of Children in the Child Welfare System
In federal fiscal year 2005, there were 506,483 children in out-of-
home care and during that same year, approximately 800,000 children
spent at least some time in a foster care setting. \1\ Many children
that enter the foster care system are at an extremely high risk for
both physical and mental health issues as a result of biological
factors and/or the maltreatment they were exposed to at home. Some
children are in out-of-home care for other reasons, such as their
parent(s) voluntarily placing them or feeling compelled to do so. For
example, the Government Accounting Office estimates that in 2001, due
to limits on public and private health insurance, inadequate supply of
services, and difficulty meeting eligibility requirements, parents
placed over 12,700 children into the child welfare or juvenile justice
systems solely so that these children would be more likely to receive
necessary mental health services. \2\ Regardless of why the child has
come into the child welfare or foster care systems, removing the child
from his/her home, breaking familial ties and the continued instability
that often ensues greatly exacerbate any original vulnerability.
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\1\ Child Welfare League of America. (2007). Special tabulation of
the Adoption and Foster Care Analysis Reporting System. Washington, DC:
Author.
\2\ U.S. General Accounting Office (GAO) (2003). Child welfare and
juvenile justice: Federal agencies could play stronger role in helping
states reduce the number of children placed solely to obtain mental
health services (GAO-03-397). Available online at http://www.gao.gov.
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Numerous studies have documented that children in foster care have
medical, developmental and mental health needs that far surpass those
of other children, even those living in poverty. One study found that
60% of children in care have a chronic medical condition and one-
quarter have three or more chronic health problems. \3\ Many also
experience developmental delays in regards to language and cognition.
\4\ When compared to the general population, children younger than six
in out-of-home care have higher rates of respiratory illness (27%),
skin problems (21%), anemia (10%), and poor vision (9%). \5\ In regards
to mental health, it is estimated that between 54% and 80% of children
in out-of-home care meet clinical criteria for behavioral problems or
psychiatric diagnosis. \6\ In one study, researchers found that between
40% and 60% of children in out-of-home care had at least one
psychiatric disorder and that this population of children used both
inpatient and outpatient mental health services at a rate 15 to 20
times higher than the general pediatric population. \7\
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\3\ Simms, M.D., Dubowitz, H., & Szailagyi, M.A. (2000). Needs of
children in the foster care system. Pediatrics, 106 (Supplement), 909-
918.
\4\ Halfon, N., Mendonca, A., & Berkowitz, G. (1995). Health status
of children in foster care: The experience of the Center for the
Vulnerable Child. Archives of Pediatric and Adolescent Medicine, 149,
386-392.
\5\ Takayama, J.I., Wolfe, E., & Coulter, S. (1998). Relationship
between reason for placement and medical findings among children in
foster care. Pediatrics, 101, 201-207.
\6\ Clausen, J., Landsverk, J., Ganger, W., Chadwick, D., &
Litrownik, A.J. (1998). Mental health problems of children in foster
care. Journal of Child and Family Studies, 7, 283-296; Halfon et al.
(1995); Urquiza, A.J., Wirtz, S.J., Peterson, M.S., & Singer, V.A.
(1994). Screening and evaluating abused and neglected children entering
protective custody. Child Welfare, 123, 155-171.
\7\ dosReis, S., Zito, J.M., Safer, D.J., & Soeken, K.L. (2001).
Mental health services for foster care and disabled youth. American
Journal of Public Health, 91, 1094-1099.
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Medicaid's Vital Role in Assisting Children in Care
When children are removed from their home base and placed in State
custody due to no fault of their own, Medicaid steps in to provide many
of these children with physical and mental health care that helps them
get on the road to recovery. In addition to Medicaid's Early, Periodic
Screening, Diagnostic, and Treatment (EPSDT) and the Targeted Case
Management Option, Medicaid Rehabilitative Services are especially
vital, as they offer a realistic opportunity to--in the least
restrictive setting possible--reduce the physical and/or mental
disabilities that many children in foster care have, thereby restoring
the child's functioning level, decreasing lingering and long-term
negative impacts, and ultimately reducing costs. Rehabilitative
services are also community-based and consumer--and family-driven
services, in line with both the President's New Freedom Commission on
Mental Health and the U.S. Surgeon General's recommendations.
Many children and youth involved with the child welfare and foster
care systems--many of whom have experienced life-altering trauma and
have little or no familial support--are already slipping through the
cracks and it is essential to bridge rather than widen the gaps.
Unfortunately, however, CMS recently proposed a regulation (CMS-2261-P/
72 Fed. Reg. 45201) that would significantly limit access to Medicaid
Rehabilitative Services for many vulnerable populations--who are both
Medicaid-eligible and greatly in need of services, including children
involved with the child welfare and foster care systems. The regulation
would entirely take away federal Medicaid dollars for rehabilitative
services that are deemed ``intrinsic to'' other programs, including
child welfare and foster care. The authority of CMS to implement such a
provision is questionable, as Congress specifically debated and
rejected adopting an ``intrinsic to'' test in regards to rehabilitative
services when enacting the Deficit Reduction Act of 2005.
Federal Medicaid dollars, for example, would not be available for
rehabilitative services provided in a therapeutic foster care setting
unless they are medically necessary, clearly distinct from packaged
therapeutic foster care services, and given by a qualified provider. As
the Surgeon General indicated in his 1999 report on mental health, with
care provided in private homes with specially trained foster parents,
therapeutic foster care is considered ``the least restrictive form of
out-of-home therapeutic placement for children with severe emotional
disorders.'' \8\ The proposed regulation's language, while not
explicitly prohibiting therapeutic foster care, whittles away at its
core so much that access will surely be restricted, if not completely
shut off. As a result, because there is a continuum of care in foster
care, children who cannot be maintained in regular foster care due to
serious emotional or other health issues will be forced into more
restrictive settings--a result that cannot be justified by any amount
of federal savings.
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\8\ U.S. Department of Health and Human Services (HHS). (1999).
Mental health: A report of the Surgeon General. Rockville, MD: Author.
Available online at http://www.surgeongeneral.gov/library/mentalhealth/
home.html.
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As Twila Costigan, Manager of the Adoption & Family Support Program
at CWLA member agency Intermountain (Helena, MT) testified before the
U.S. House of Representatives Oversight and Government Reform Committee
on November 1, 2007, ``rehabilitative services are used to allow
program staff to go into therapeutic foster homes to model and teach
effective interventions to parents and children. Staff also work with
the child to help them develop personal skills to allow them to
identify and communicate their feelings to the adults in their lives--
rather than acting out these feelings of rage, sadness, fear,
humiliation, jealousy and anxiousness in destructive ways.'' Ms.
Costigan's testimony declares sadly that ``the loss of the Medicaid
Rehabilitative services has the likely consequence of eliminating
Therapeutic Foster and Group Home care for the Severely Emotionally
Disturbed children in Montana.''
CWLA also strongly advocates that rather than requiring a ``clearly
distinct'' billing method, States be afforded the discretion to define
therapeutic foster care as a single service and pay through a case,
daily, or appropriate mechanism. Packaged services allow the necessary
amount of time and attention to be spent on children suffering from
intense mental issues. The alternative imposes the significant
administrative burden of relegating activities into somewhat arbitrary
time blocks, which ultimately takes time away from the child and
reduces services' effectiveness and the child's progress.
CWLA also has concerns about soon-to-be released regulations
regarding the use of Medicaid Targeted Case Management. TCM allows
States to target a select population to receive in-depth case
management services--even across child-serving systems--thereby
assisting the child in accessing much needed medical and social
services. At least thirty-eight States employ the TCM option to provide
greater coordination of care for children in foster care and the
children who receive TCM services fare better in a wide array of areas.
Specifically, TCM recipients are more likely to receive physician
services (68% compared to 44%); prescription drugs (70% compared to
47%); dental services (44% versus 24%); rehabilitative services (23%
versus 11%); inpatient services (8% versus 4%) and clinic services (34%
compared to 20%). \9\
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\9\ Geen, R., Sommers, A., & Cohen, M. (August 2005). Medicaid
Spending on Foster Children. Available online at http://www.urban.org/
UploadedPDF/311221_medicaid_spending.pdf. Washington, DC: The Urban
Institute.
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Medicaid and its components, including EPSDT and the Rehabilitative
Services and Targeted Case Management options, must remain strong,
viable streams of care. Aggressive efforts must be made to thwart any
contrary actions so that Medicaid may fulfill its purpose of bettering
the health of some of our nation's most vulnerable children.
Access Concerns
Many of the challenges associated with the provision of health care
for children in out-of-home care relate to funding, specifically the
constraints posed by the Medicaid program. In many States, providers
report very low reimbursement rates and long waits for payment. In some
communities, providers have declined to continue to see patients who
have Medicaid as their health care coverage. As the number of providers
for children in out-of-home care decreases, access and choice diminish,
waiting lists become commonplace, and services are delayed. At the same
time, a number of States have mandated that children in out-of-home
care shift from fee-for-service Medicaid to Medicaid managed care.
These changes in the delivery and funding of health care services have
led to concerns that services for children in out-of-home care will be
rationed and that services that were already difficult to obtain under
the fee-for-service model, particularly mental health services, will
become even more difficult to access. \10\
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\10\ American Academy of Pediatrics. (2002). Health care of young
children in foster care: Committee on Early Childhood, Adoption and
Dependent Care. Pediatrics, 109, 536-541.
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In addition, health care providers often lack experience in
treating the physical and mental health problems that children in out-
of-home care experience. They may face serious obstacles in obtaining
accurate medical histories for children, including information about
current and prior medications. On the child welfare workforce end,
child welfare caseworkers are often young, have limited professional
experience, and are managing caseloads that far exceed recommended
standards--all of which likely contribute negatively to the timely and
appropriate provision of health care for children in foster care. Final
concerns include: distance to providers and lack of transportation,
placement changes while in out-of-home care, barriers to information
sharing between the health care and child welfare systems, and failures
to coordinate the child's health care and child welfare plans. \11\
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\11\ Child Welfare League of America (CWLA). (2007). Standards of
Excellence for Health Care Services for Children in Out-of-Home Care.
Washington, DC: Author.
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Youths Leaving Foster Care Due To Age
Certainly there is no group of America's youth more deserving of
Congress' attention than those in foster care or those who leave foster
care after turning age 18. Every year 20,000-25,000 young people exit
the foster care system. \12\ These young people leave care simply
because there is an age limit on federal funding. While some States may
extend this support beyond age eighteen and the Chaffee Independent
Living Program offers limited funding for transitional services to
these young people, all too often the end result is that foster
children find themselves on their own at age eighteen.
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\12\ Children who aged out of foster care are captured by the
AFCARS emancipation data element. Children who exit care to
emancipation are those who reached the age of majority; CWLA, Special
tabulation from AFCARS.
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Barriers to a Secure Adulthood
Adolescents constitute a major segment of the youngsters the child
welfare system serves. In 2005, 29 percent of children in care were 15
years of age or older. \13\ Most youth enter out-of-home care as a
result of abuse, neglect, and exploitation. Others have run away from
home or have no homes. Young people transitioning out of the foster
care system are significantly affected by the instability that
accompanies long periods of out-of-home placement during childhood and
adolescence. These young people often find themselves truly ``on their
own,'' with few, if any, financial resources, no place to live, and
little or no support from family, friends, and community. The
experiences of these youth place them at higher risk for unemployment,
poor educational outcomes, health issues, early parenthood, long-term
dependency on public assistance, increased rates of incarceration, and
homelessness. The resulting harm to the youth themselves, their
communities, and the society at large is unacceptably high.
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\13\ Adoption and Foster Care Analysis and Reporting System
(AFCARS) data submitted for the FY 2005, 10/1/04 through 9/30/05.
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Health Needs and Lack of Health Coverage
For the 20,000-25,000 youth who age out of care each year, many
times their health needs linger into adulthood. Foster care alumni
experience a disproportionate amount of both physical and mental health
issues, including post-traumatic stress disorder and major depression.
Compounding this problem is the fact that 33% of foster care alumni
lack health insurance--a rate almost twice as high as the general
population. \14\ The Chafee program allows States to extend Medicaid
coverage to former foster children between ages 18 and 21. Despite
Medicaid's tremendous advantage for youth in foster care, however, only
17 States had implemented the extension as of December 2006. \15\
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\14\ Pecora, P.J., Kessler, R.C., Williams, J., O'Brien, K., Downs,
A. C., English, D., White, J., Hiripi, E., White, C. R., Wiggins, T., &
Holmes, K. (2005). Improving family foster care: Findings from the
Northwest Foster Care Alumni Study. Available online at http://
www.casey.org/Resources/Publications/NorthwestAlumniStudy.htm. Seattle,
WA: Casey Family Programs.
\15\ Patel, S. & Roherty, M. (2007). Medicaid Access for Youth
Aging Out of Foster Care. Washington, DC: American Public Human
Services Association. Available online at http://www.aphsa.org/Home/
Doc/Medicaid-Access-for-Youth-Aging-Out-of-Foster-Care-Rpt.pdf.
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Legislative Steps
The Child Welfare League of America desires for all children in
foster care to receive coordinated, continuous, comprehensive, and
culturally competent health care services and supports legislation
working toward that goal. \16\ Services must be coordinated in terms of
providing cross-system training and continuity in service both while
the child is in State custody and after he or she leaves as a result of
reunification, placement with a relative, adoption, or aging out of
care. Because children in foster care experience a wide array of and
disproportionate amount of health needs, services must be comprehensive
and address children's medical, mental, dental, emotional, and
developmental needs. This is not just a goal or desire of CWLA, but it
is a necessary component to reducing the number of children in foster
care. Something we all seek.
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\16\ Child Welfare League of America (CWLA). (2007). Standards of
Excellence for Health Care Services for Children in Out-of-Home Care.
Washington, DC: Author.
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Proposed Medicaid Regulations that Would Restrict Access to Needed Care
Rather than making such sweeping changes to vital community-based
services such as Medicaid Rehabilitative Services and Targeted Case
Management through rulemaking, CWLA believes that these important
decisions should be debated thoroughly and done through the legislative
process. CWLA strongly supports long-term efforts to ensure that
Medicaid and its components remain financially supported, accessible
streams of care. In the immediate, CWLA urges Congress to pass a
moratorium on the proposed Rehabilitative Services regulation. Such a
moratorium--that would halt any Administrative action that restricts
coverage or payment under Rehabilitative Services until January 1,
2010--was included as Section 616 of the Children's Health Insurance
Program Reauthorization Act of 2007 (H.R. 3963). However, because the
fate of that reauthorizing legislation is currently uncertain, CWLA
would strongly support a similar moratorium in another legislative
vehicle.
Health Care for Youth Transitioning Out of Foster Care
The Medicaid Foster Care Coverage Act of 2007, H.R. 1376, has been
introduced by Representative Dennis Cardoza (D-CA-18). We support this
bill and commend Congressman Cardoza for introducing this bill. This
legislation which has bipartisan support including the support of five
members of this Subcommittee, addresses a critical issue for young
people leaving foster care, the fact that by some surveys 33% of foster
care alumni lack health insurance. Congressman Cardoza's legislation
would make sure that young people leaving the system due to their age
be assured that they will at least have the safety net of continued
Medicaid coverage until their twenty-first birthday. For this
population we need to do so much more including increasing our efforts
to prevent these young men and women from reaching the point of
``aging-out'' of the child welfare system. For now we can take this one
basic, minimum step of allowing them continued access to a doctor.
Conclusion
CWLA appreciates the opportunity to offer our comments to the
Subcommittee in regard to gaps in health coverage and the accompanying
growing challenges for vulnerable populations, including children and
youth in the child welfare and foster care systems. As this
Subcommittee moves forward, we look forward to a continued dialogue
with its members and all Members of Congress. We hope this hearing
serves as a building block for future efforts that work to ensure
coordinated, continuous, and comprehensive health care coverage for all
children--especially those at-risk of placement, those already in
foster care, and those transitioning out of the child welfare system
into adulthood.
Statement of Human Rights Campaign
On behalf of the Human Rights Campaign and our over 700,000 members
and supporters nationwide, I thank Representative McDermott for calling
this hearing on the impact of gaps in health coverage. As the nation's
largest civil rights organization advocating for the Gay, Lesbian,
Bisexual, and Transgender (``GLBT'') community, the Human Rights
Campaign strongly supports measures that will ensure health coverage
for all Americans.
GLBT families are faced with a particular challenge in the area of
health insurance. Families rely heavily on employer-provided health
insurance, a benefit that is increasingly offered to same-sex couples.
Recognizing that their lesbian and gay employees deserve equal pay for
equal work, and that they need a diverse workforce to compete in
today's economy, over one half of the Fortune 500 companies now offer
equal health benefits to their employees' same-sex domestic partners--
up from only one in 1992. Unfortunately, our tax system does not
reflect this advance toward true meritocracy in the workplace. Under
current federal law, employer-provided health benefits for domestic
partners are subject to income tax and payroll tax. As a result, a
lesbian or gay employee who takes advantage of this benefit takes home
less pay than the colleague at the next cubicle. Some families have to
forego the benefits altogether because of this unfair tax--adding them
needlessly to the millions of uninsured Americans in this country.
Here is an example of the inequity: In 2006 Steve earned $32,000
per year and owed $3,155 in federal income and payroll taxes. Steve's
employer also paid the monthly premium of $907 for Steve's family
health coverage, of which $572 the amount in excess of the premium for
self-only coverage. None of this coverage was taxable under current
law. Steve's co-worker, Jim, earned the same salary and had the same
coverage for himself and his partner, Alan. However, the value of the
coverage provided to Alan is subject to federal income and payroll
taxes. As a result, $6,864 of income is imputed to Jim and his federal
income and payroll tax liability increased from $3,155 to $4,710. This
represents nearly a 50% increase over Steve and Emily's tax liability.
For many families, especially those with modest incomes, the tax
hit is more than they can bear. In Steve and Alan's case, the
additional $1,555 in tax liability is beyond their means. Put simply,
taxing these benefits can exclude families from employer-provided
benefits. With over 40 million Americans uninsured, and Medicaid now
costing taxpayers $4,072 per individual, we should be working to
decrease the number of uninsured, not creating hurdles while corporate
America is attempting to provide equal benefits.
It is time for the federal government catch up with America's
leading corporations and to stop taxing domestic partner benefits. The
Tax Equity for Health Plan Beneficiaries Act, H.R. 1820, introduced by
Subcommittee Chairman McDermott, would eliminate the tax inequity and
render health insurance more affordable for gay and lesbian families.
\1\ This is a common-sense bill that brings our tax system up to date
with corporate best practices. We encourage Congress to support this
healthy proposal and work toward its passage.
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\1\ A similar bill has been introduced in the Senate--the Tax
Equity for Domestic Partner and Health Plan Beneficiaries Act (S.
1556).
Statement of National Association of Disability Examiners
Mr. Chairman and members of the Subcommittee, thank you for
providing this opportunity for the National Association of Disability
Examiners (NADE) to present a statement on the Impact of Gaps in the
Health Coverage on Income Security.
NADE is a professional association whose purpose is to promote the
art and science of disability evaluation. The majority of our members
work in the State Disability Determination Service (DDS) agencies and
thus are on the ``front-line'' of the disability evaluation process.
Our members feel that there is an area of critical importance to
the disabled population of our country that should be considered by
those involved with this hearing--the 24 month Medicare waiting period
for Title II disability claimants. While this Subcommittee oversees the
Title XVI program, the Medicare Waiting Period has an impact on a large
cross-section of the population and could serve to fill some of the
gaps in health coverage discussed at this hearing.
Most Social Security disability beneficiaries have serious health
problems, low incomes and limited access to health insurance. Many
cannot afford private health insurance due to the high cost secondary
to their pre-existing health conditions. Members of the National
Association of Disability Examiners (NADE) are deeply concerned about
the hardship the 24 month Medicare waiting period creates for these
disabled individuals, and their families, at one of the most vulnerable
periods of their lives.
In 1972, Congress passed Social Security legislation extending
Medicare coverage to persons who had been receiving disability cash
benefits for 24 consecutive months. Congress is to be commended for
providing these health care benefits for the disabled American
population. The original purpose of the Medicare waiting period was to
``help keep program costs within reasonable bounds, avoid overlapping
private insurance protection and provide assurance that the protection
will be available to those whose disabilities have proven to be severe
and long lasting.''
In the original 1972 legislation there was one exception to the 24
month Medicare waiting period. Individuals with chronic renal disease
would only have to wait three months before receiving Medicare
benefits. In 2000, Congress passed legislation, implemented in 2001,
that eliminated the Medicare waiting period for those individuals with
amyotrophic lateral sclerosis (ALS), commonly known as Lou Gehrig's
disease. In both of these situations, it was felt that the health of
the affected individuals warranted more timely access to Medicare
coverage.
Currently nearly six million disabled individuals receive Medicare
benefits, and Medicare plays a vital role in ensuring that these
individuals have access to appropriate and affordable health care. NADE
believes that requiring some disabled individuals to serve a waiting
period before receiving health care benefits and not requiring others
to do so is fundamentally unfair and causes a tremendous hardship for
individuals with disabilities at one of the most vulnerable periods of
their lives.
All Title II Social Security disability beneficiaries, except for
the two groups mentioned above, are required to serve a 24 month
waiting period before becoming eligible for Medicare benefits. The
Medicare waiting period begins with the first month of receiving Social
Security disability cash benefits which is five full months after the
onset of a disability. This means that the majority of Social Security
disability beneficiaries actually wait twenty-nine months after the
onset of their disability before becoming eligible for Medicare health
insurance benefits.
The majority of Social Security disability beneficiaries have
impairments that are severe and long lasting. Currently less than one
percent of Social Security disability beneficiaries have their benefits
terminated each year. Another four percent die during the Medicare
waiting period. Many beneficiaries suffer irrevocable physical and
mental deterioration while waiting for Medicare coverage and needed
health care services. Early intervention and provision of needed health
care services as soon as possible after the onset of disability, and at
a time when the individual needs it most, could improve both these
statistics and the quality of life for individuals with disabilities.
NADE supports the elimination or, at the very least a reduction, of the
24 month waiting period for Medicare benefits for all Title II
disability beneficiaries. This change is needed to ensure fundamental
fairness in the program and equity to all Social Security disability
beneficiaries.
Eliminating, or reducing, the 24 month Medicare waiting period for
Social Security disability beneficiaries would address the insurance
needs of a high-risk, high-need population and provide financial relief
and access to health care services at a time when health care needs are
especially pressing and few alternatives exist.
Social Security beneficiaries in the Medicare waiting period face
enormous problems. Research conducted by the Commonwealth Fund, in
conjunction with the Henry J. Kaiser Family Foundation and the
Christopher Reeve Paralysis Foundation, found that Social Security
disability beneficiaries reported ``skipping medications, putting off
needed care, feeling depressed and anxious about the future, and
believing they were not in control of their own lives'' during the 24
month Medicare waiting period.
Although some Social Security disability beneficiaries may
initially be found eligible for SSI (thereby receiving Medicaid
benefits), many lose that health care coverage when they complete their
five-month waiting period and begin receiving Social Security
disability cash benefits. Thus many disability beneficiaries are
without any health insurance for at least some portion of their 24
month Medicare waiting period. Without health care coverage,
individuals' health conditions cannot improve, nor can they return to
work, participate in their communities or stop depending on family
members and friends for their basic needs. Beneficiaries need better
access to health services before they can consider working again. Many
individuals with disabilities might return to work if afforded access
to necessary health care and related services.
NADE members, who work on the ``front-line'' of the disability
program, have first-hand experience with the hardships that the 24
month Medicare waiting period places on disabled beneficiaries. During
continuing disability reviews NADE members all too often see
individuals whose conditions, without proper health care coverage, have
markedly deteriorated and who are significantly worse than when they
were initially awarded disability benefits. The financial and emotional
toll this has taken on the disabled beneficiary and their families is
disheartening. Many individuals who could have been cured and/or found
to be no longer disabled continue to be disabled due to the lack of
access to needed health care services during the early stages of their
disability. Such medical care could, in many cases, have improved both
their disabling condition(s) and their overall situation in life.
The Medicare waiting period is an often insurmountable barrier for
individuals with disabilities. It offers frustration and emotional
distress to people and families who are already hurting. Individuals
with disabilities perceive the waiting period as being ``punitive'' and
inherently unfair. Some individuals feel that the government is ``just
waiting for'' people to die. Moreover, for many individuals, it will
cost more in the long run for health care and services as individuals'
conditions deteriorate because they are not receiving appropriate
treatment. NADE strongly believes that Social Security disability
beneficiaries and their families who are forced to deal with the trauma
of disability, should not then be forced to deal with deteriorating
health, financial pressures and emotional frustration caused by the
Medicare waiting period. Medicare coverage at the onset of an
individual's disability would relieve not only a significant financial,
but also a significant emotional burden for disability beneficiaries
and their families.
Most Americans with disabilities wish to lead active, healthy and
productive lives and believe that employment is an important key to
achieving this goal. Improvements in health care and early intervention
of needed medical services could increase rehabilitation successes,
provide greater employment opportunities and enhance the ability of
people with disabilities to be more active and productive. Early
interventions and access to needed health care services would provide
not only greater emotional and economic stability for disabled
individuals, it would decrease costs to the Social Security disability
program as well.
The Social Security Administration has proposed some new
demonstration projects under their Work Opportunity Initiative to help
overcome the barrier that the 24 month Medicare waiting period poses
for those disability beneficiaries and applicants who wish to work. The
demonstration projects provide supports, incentives and work
opportunities to people with disabilities at the early stages of the
disability determination process. Three of these proposed demonstration
projects provide immediate medical benefits to applicants for
disability benefits by offering comprehensive, affordable health care
coverage. This allows beneficiaries to receive needed medical services
early on in the onset of disability to enhance their vocational profile
to return to work. Such interventions are not only good business
practice from a financial standpoint, but from a humane and public
relations aspect as well. NADE fully supports all initiatives and
demonstration projects designed to assist disabled individuals in their
efforts to obtain needed health care, promote self-sufficiency and
return to work.
NADE members strongly believe that claimants and their families,
who are forced to deal with the onset of disability, should not then be
forced to deal with the lack of health care coverage. For both Social
Security and SSI disability, the definition of disability is the same,
the medical listings are the same, and the adjudicative procedures used
to process the claims are the same. However, the health care benefits
provided to those who are found disabled are not.
Disabled individuals who receive SSI disability benefits are
eligible to receive health care coverage under the Medicaid program
immediately upon being found eligible for SSI benefits. Because the SSI
disability beneficiaries can receive health care benefits immediately,
the perception clearly exists that the individual who has worked and
contributed to the nation's workforce and economy is penalized for
having done so! Most Social Security disability beneficiaries face a
daunting combination of low income, poor health status, heavy
prescription drug use and high medical bills. They spend their days
trying to survive and get their most basic human and health care needs
met. Access to the health care services provided by Medicare is crucial
if individuals with disabilities are to maximize their potential, avoid
far more costly hospitalizations and long-term institutionalization and
lead fuller and more productive lives.
Congress passed the Americans with Disabilities Act in 1990 with
the specific goals of ensuring equal opportunity, full participation in
society, independent living and economic self-sufficiency for
individuals with disabilities. Eliminating, or at least reducing, the
24 month Medicare waiting period would not only be an extremely humane
gesture for these disabled workers and their families, it is perfectly
aligned with the American with Disabilities Act and it is the ``right
thing to do!''
NADE recognizes that there are costs involved with eliminating the
24 month Medicare waiting period. Thus, our members would also support
an incremental approach to reducing this. Some of the costs could be
offset by a reduction in federal Medicaid expenditures. The Government
Accountability Office (GAO) stated in their report on transforming
government to meet the 21st century challenges that ``policymakers must
confront a host of emerging forces and trends shaping the United States
. . . and . . . accompanying these changes are new expectations about
the quality of life for Americans and . . . testing the continued
relevance and relative priority for our changing society'' of existing
federal programs is critical to ensure ``fiscal responsibility and
facilitating national renewal.'' NADE agrees with GAO and feels it is
time to change the Medicare waiting period to bring it into the 21st
century.
Statement of Matthew Melmed, Zero to Three
Chairman McDermott and Members of the Subcommittee:
My name is Matthew Melmed. For the past 12 years I have been the
Executive Director of ZERO TO THREE, a national non-profit organization
that has worked to advance the healthy development of America's babies
and toddlers for 30 years. I would like to start by thanking the
Subcommittee for its interest in examining the impact of gaps in health
coverage on income security. I would also like to thank the
Subcommittee for providing me the opportunity to discuss the
interaction between poverty, access to health care, and the healthy
physical, social-emotional, and cognitive development of our nation's
infants and toddlers.
For these youngest children, regular health care can spell the
difference between a strong beginning and a fragile start that leaves
them behind. In the battle of words and policies over who should
receive help in obtaining health insurance, and therefore better access
to health care, we often forget that there are some groups of people
who simply can't wait--and babies are one of them. We hope that
thinking about their needs can help spur action on behalf of all
children and families.
When we as parents think back to our children's earliest years, we
inevitably think of the many visits to the pediatrician. For many of
us, it is daunting to imagine having to pay out of pocket for all that
care or even worse, to imagine foregoing that care because of the
trade-offs it would require in other basic necessities of life. And to
contemplate the staggering medical bills for infants with the
complications of preterm birth or low birth-weight would be
overwhelming. Yet, many parents do face these circumstances as more
than one in ten infants and toddlers are without health insurance. \1\
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\1\ Annie E. Casey Foundation analysis of data from the 2007
Current Population Survey.
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The pool of very young children at-risk is even greater because we
know that a child's health and development are intricately related to
the conditions in which lower-income families live. Two out of every
five children under the age of three in America live in families
considered low-income (at or below 200% of the federal poverty level).
\2\ Very young children are more likely to be poor than children as a
whole, spending their critical early years developmentally in an
environment that impacts them more severely than other age groups.
Moreover, it takes only one event such as an accident, a baby requiring
expensive neonatal care, or the loss of a job and the health insurance
that may come with it to send a family spiraling down into the at-risk
population.
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\2\ Douglas-Hall, Ayona and Chau, Michelle. 2007. Basic facts about
low-income children: Birth to age 3. September 2007. http://
www.nccp.org/publications/pub_765.html (accessed September 20, 2007).
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For infants and toddlers, we cannot think of the developmental
domains in isolation. Infancy and toddlerhood are times of intense
cognitive, social-emotional, and physical development, and the
development in these areas is inextricably related. So poor health in a
very young child can lead to developmental problems in other areas and
vice versa.
Too often we ignore the early years of a child's life in making
public policy, failing to give children and families supports that
could make a difference in how their lives unfold. Yet, we spend a
great deal of time and money on needs identified later in life--for
example, gaps in cognitive development upon entering preschool or more
intensive special education services for problems that may have begun
as much milder developmental delays left undiagnosed and untreated in a
young baby.
Mr. Chairman, my message to you is that policymakers need to be
aware of the important foundations laid in the early years of life and
structure policies in such a way that they: 1) promote healthy
development of infants and toddlers, 2) prevent many of the devastating
physical, social-emotional, and cognitive impairments that these young
children face in the future, and 3) treat acute and chronic illnesses,
developmental delays, social-emotional problems, and learning
disabilities in a timely manner. Simply put, babies and their families
can't wait--we know that early intervention and prevention work best
and we know that living in poverty can increase parental stress and
compromise the healthy development of young children. We need policies
that support parents and other caregivers in providing young children
with the strong foundation they need for healthy development.
The Effects of Health Care Gaps on Infants and Toddlers
Like other children, infants and toddlers are not immune to the
growing health insurance gap in our country. Even though 52% of infants
and toddlers in low-income families have at least one parent who works
full-time, \3\ the economic reality of the labor force is that
employer-sponsored health insurance is becoming more and more of a
rarity. In fact, nearly 12% of children under the age of three--1.9
million infants and toddlers--lack health insurance. \4\
---------------------------------------------------------------------------
\3\ Ibid.
\4\ Annie E. Casey Foundation analysis of data from the 2007
Current Population Survey.
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The health insurance gap affects babies even before birth when one
considers the prenatal care to which their mothers may or may not have
access. The March of Dimes estimates that an American newborn has a
``1-in-5 chance of being born to a mother who lacks health insurance.''
\5\ Their mothers are therefore less likely to receive prenatal care,
including screenings and diagnostic tests, which can improve their
health as well as their babies' health.
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\5\ March of Dimes. 2006. Newest American baby faces health
challenges. http://www.marchofdimes.com/printableArticles/
15796_21848.asp, (accessed November 9, 2007).
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What does it mean for a baby or toddler to lack access to health
care? One likely consequence is missed doctor visits at which
preventive care or early screening would take place. The Academy of
Pediatrics recommends eight well-baby care visits with a pediatrician
in the first year of life, with five more by the time the child reaches
the age of three. These visits focus on preventive pediatric health
care, including vision, hearing, lead, and developmental screenings;
psychosocial/behavioral assessments; and promotion of proper oral
health care. \6\ These screenings and assessments are critical during
the birth to three period to detect impairments, developmental delays
and disabilities, and life-threatening disorders. If diagnosed early,
these delays and disorders can be successfully managed or treated to
prevent more severe and costly consequences later in life. In addition
to well-baby visits, those of us who are parents know families are
likely to find themselves in the pediatrician's office many more times
for childhood illnesses. For the family without health insurance,
paying for this number of visits can seem daunting indeed.
---------------------------------------------------------------------------
\6\ American Academy of Pediatrics and Bright Futures. 2007.
Recommendations for preventive pediatric health care. http://
aappolicy.aappublications.org/cgi/reprint/pediatrics;105/3/645.pdf
(accessed November 9, 2007).
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The result is not just a matter of conjecture. Research shows that
without adequate health insurance, infants and toddlers fall victim to
a host of poor health outcomes. In fact, uninsured children are almost
five times more likely than insured children to have at least one
delayed or unmet health care need. \7\ Uninsured infants and toddlers
are also less likely to have a regular pediatrician or medical home.
\8\ As a result, they are less likely to obtain preventive care or be
diagnosed and treated early for illnesses, instead waiting until
conditions are no longer manageable before seeking care in the
Emergency Room (ER) of their local public hospital. In fact, in the
last 50 years, the number of visits to ERs has increased more than 600%
in the United States, \9\ with children 0-18 accounting for over 31
million visits to the ER every year. \10\ Children under the age of
three represent the largest proportion of medically and injury-related
ER visits in the country. \11\
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\7\ American Academy of Pediatrics. 2007. Children's health care
coverage. http://www.aap.org/advocacy/washing/
ChildrensHealthCareCoverage.pdf (accessed November 9, 2007).
\8\ American Academy of Pediatrics. 2004. Overcrowding crisis in
our nation's Emergency Departments: Is our safety net unraveling?
Pediatrics 114 (3): 878-888. http://aappolicy.aappublications.org/cgi/
reprint/ pediatrics;114/3/878.pdf (accessed November 9, 2007).
\9\ Ibid.
\10\ American Academy of Pediatrics. 2001. Care of children in the
Emergency Department: Guidelines to preparedness. Pediatrics 107 (4):
777-781. http://aappolicy.aappublications.org/cgi/reprint/
pediatrics;107/4/777.pdf (accessed November 9, 2007).
\11\ Ibid.
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Emergency Rooms are the safety net of the United States health care
system, but they are not a substitute for routine care, nor should they
be. ERs are overcrowded and overburdened, leaving less staff and
resources for those who truly need emergency care. For example, asthma,
the leading cause of pediatric hospitalizations and missed school days,
\12\ is a chronic condition, but one that is manageable with proper
attention and medication. By waiting until an attack is imminent rather
than controlling environmental triggers on an ongoing basis, care
becomes much more expensive and difficult to obtain. Yet, uninsured
families and those living in poverty often do not have a choice as
access to regular health care is unreachable.
---------------------------------------------------------------------------
\12\ Ku, Leighton, Lin, Mark, and Broaddus, Matthew. 2007.
Improving children's health: A chartbook about the roles of Medicaid
and SCHIP. Center for Budget and Policy Priorities. http://
www.cbpp.org/schip-chartbook.pdf (accessed November 9, 2007).
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Infants and toddlers also require 20 doses of vaccines before they
are two years old to protect them against 12 preventable diseases. \13\
Vaccines are cost-effective public health measures that have decreased
the incidence of several childhood diseases in the United States,
including diphtheria, measles, mumps, rubella, and meningitis by 99%
and completely eradicated polio. \14\ Not so long ago, these diseases
caused death and paralysis among the most vulnerable youth. While the
majority of our nation's infants and toddlers do receive the full range
of recommended immunizations, nearly 18% of infants and toddlers do
not. \15\ Because uninsured children and those living in poverty are
less likely to have a regular pediatrician, they are also less likely
to receive the full range of recommended immunizations, thereby
threatening not only their health, but the public's health as well.
---------------------------------------------------------------------------
\13\ American Academy of Pediatrics. 2007. Immunizations. http://
www.aap.org/advocacy/washing/Immunizations.pdf (accessed November 9,
2007).
\14\ Ibid.
\15\ American Academy of Pediatrics. 2007. Statistics. http://
www.aap.org/advocacy/washing/Statistics.pdf (accessed November 9,
2007).
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The Cost of Extraordinary Care
Even if uninsured families are able to pay for routine visits, a
serious health condition can push them over the edge financially. The
high costs of hospital care for premature or low-birthweight infants,
in particular, can be overwhelming for parents without health
insurance. One factor leading to these conditions is a lack of prenatal
care, which as noted above, is more likely to be a factor for women who
lack health insurance, creating a devastating chain of events for
mother and baby. The March of Dimes estimates that, in 2005, preterm
births ``cost the United States at least $26.2 billion, or $51,600 for
every infant born preterm.'' \16\ A 1999 study of neonatal intensive
care found that the median treatment cost for all infants in the study
was $49,457 (in 1994 constant dollars) while costs at the 90th
percentile was $130,377. The lowest birthweight infants had a higher
median cost at $89,546. \17\
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\16\ March of Dimes. 2006. Premature birth: The economic costs.
http://marchofdimes.com/printableArticles/ 21198_10734.asp. (accessed
November 9, 2007).
\17\ Rogowski, Jeannette. 1999. Measuring the cost of neonatal and
perinatal care. Pediatrics 103 (1): 329-335. http://
pediatrics.aappublications.org/cgi/content/full/103/1/SE1/329 (accessed
November 9, 2007).
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For parents who have jobs that do not provide health insurance,
such medical bills must seem insurmountable. In a study of families
that had filed for bankruptcy, caring for premature infants and
chronically ill children was a common theme. \18\ Sometimes it is the
loss of a job when the parent must care for the child that is the final
straw.
---------------------------------------------------------------------------
\18\ Himmelstein, David U., Warren, Elizabeth, Thorne, Deborah, and
Woolhandler, Steffie, 2005. Illness and injury as contributors to
bankruptcy. HEALTH AFFAIRS--Web Exclusive http://
content.healthaffairs.org/cgi/reprint/
hlthaff.w5.63v1?maxtoshow=&HITS=10&hits=10
&RESULTFORMAT=&author1=Himmelstein&andorexactfulltext=and&searchid=1
&FIRSTINDEX=0&resourcetype=HWCIT (accessed November 9, 2007).
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The Impact of Poverty on the Healthy Development of Infants and
Toddlers
I would like to focus in on lower-income children, who are at
greater risk for a variety of poorer outcomes and vulnerabilities than
middle-income infants and toddlers, including health impairments,
social-emotional problems and diminished school success. \19\ The
health-related experiences of infants and toddlers on the lowest rungs
of the income ladder and their developmental consequences illustrate
that lacking support for good health care does not just mean missing a
few doctor visits. These experiences also give us a sense of the trade-
offs families must sometimes make in choosing among essentials for
their families.
---------------------------------------------------------------------------
\19\ Shonkoff, Jack and Phillips, Deborah. From neurons to
neighborhoods: The science of early childhood development. Washington,
DC: National Academy Press.
---------------------------------------------------------------------------
Of the 12 million infants and toddlers living in the United States,
21%--a staggering 2.6 million infants and toddlers--live in poor
families (defined as families with incomes at or below the federal
poverty level or $20,650 for a family of four). \20\ When one takes
into account those families who are classified as low-income (at or
below twice the federal poverty level or $41,300 for a family of four),
the percentage and number of infants and toddlers living in dire
economic conditions jumps to 44% or 5.4 million. \21\ While the number
of children of all ages living in poor families has increased over the
past several years, the number of infants and toddlers living in poor
families has increased at an even faster rate (16% vs. 11%). \22\ What
is particularly troubling, in addition to the rise of childhood
poverty, is the fact that very young children are disproportionately
impacted by economic stress--that is, the negative effects of poverty
are likely to be more severe when children are very young and their
bodies and minds are still developing.
---------------------------------------------------------------------------
\20\ Douglas-Hall, Ayona and Chau, Michelle. 2007. Basic facts
about low-income children: Birth to age 3.
\21\ Ibid.
\22\ Ibid.
---------------------------------------------------------------------------
Gaps in health coverage and access to adequate health care are
costly, not just for the affected infants, toddlers, and families
themselves, but to all of society. Poverty, itself, raises direct
expenditures on health care by $22 billion per year. \23\ It is
important to keep in mind, however, that it is not just those families
living in poverty or near poverty who are at-risk, but there are many
more families who are susceptible to poor health outcomes. In fact, in
2006, almost 23% of the uninsured in the United States reported having
household incomes above $50,000 a year, a 2% increase from the previous
year. \24\ All it takes is a terrible accident, the loss of stable
employment (and any health coverage which might go along with it), or a
mental health disturbance to send a family reeling.
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\23\ Holzer, Harry J., Schanzenbach, Diane W., Duncan, Greg J., and
Ludwig, Jens. 2007. The economic costs of poverty in the United States:
Subsequent effects of children growing up poor. Institute for Research
on Poverty Discussion Paper no. 1327-07. http://www.irp.wisc.edu/
publications/dps/pdfs/dp132707.pdf (accessed November 9, 2007).
\24\ U.S. Census Bureau. 2007. Income, poverty, and health
insurance coverage in the United States: 2006. http://www.census.gov/
prod/2007pubs/p60-233.pdf (accessed November 9, 2007).
---------------------------------------------------------------------------
Health Impairments
One health issue facing low-income children is food insecurity--
lacking adequate resources to meet basic food needs. \25\ In the United
States, there are 12.6 million households that are considered food
insecure, with 12.4 million children affected. \26\ Nearly 17 percent
of U.S. households with children younger than six are food insecure.
\27\ Choosing between adequate food and adequate health care may be one
of the dilemmas facing families without health insurance.
---------------------------------------------------------------------------
\25\ Parker, Lynn. 2007. Food insecurity and obesity. ZERO TO THREE
JOURNAL 28 (1): 24-30.
\26\ Ibid.
\27\ Ibid.
---------------------------------------------------------------------------
Not only do food insecure households purchase less food in general,
but they are also more likely to purchase low quality food or skip
meals altogether. Access to fresh fruits and vegetables is often
limited or priced out of reach, causing low-income parents to purchase
higher-calorie, less nutritious, and energy-dense foods in order to
maximize their caloric intake while they have the resources to buy food
at that particular moment. \28\ Reliance on less nutritious foods and
limited physical activity has resulted in an explosion of childhood
obesity. In 2000, 10.4% of children between the ages of two and five
were considered obese. \29\ Not surprisingly, children from lower
socioeconomic families are more at-risk for obesity than more affluent
children. \30\ Of course, this is important because children who are
obese and/or live in food insecure households face a number of health
impairments that can have devastating lifetime effects. Because food
insecure and obese children often have compromised immune systems, they
are less able to resist illnesses and, therefore, are more likely to be
hospitalized. \31\ In fact, children from food insecure households are
90% more likely to suffer from poor or fair health and experience 30%
higher rates of hospitalization. \32\ Long-term consequences may
include development of juvenile diabetes, hypertension, asthma, anemia,
sleep apnea, and several social-emotional problems and cognitive
deficiencies discussed below. \33\
---------------------------------------------------------------------------
\28\ Ibid.
\29\ Milano, Kim. O. 2007. Prevention: The first line of defense
against childhood obesity. ZERO TO THREE JOURNAL 28 (1): 6-11.
\30\ Ibid.
\31\ Parker, Lynn. 2007. Food insecurity and obesity.
\32\ Ibid.
\33\ Ibid.
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Social-Emotional Problems
Families who struggle to make ends meet are often stressed to the
limit, looking for any way possible to help mitigate the effects of
poverty for their children. Yet, the very fact that parents may be
spending more time working to earn the money to feed their children
means they are less available for their children. Early relationships
are the active ingredient for healthy social-emotional development in
very young children. These early relationships form the foundation upon
which all subsequent relationships will be formed. Important
behavioral, physiological, and emotional regulation systems are being
formed during these critical years. \34\ Parents or caregivers who are
absent, physically or mentally, cannot bond as strongly with their
babies, creating a higher likelihood that parents and very young
children will face a host of poor social-emotional outcomes.
---------------------------------------------------------------------------
\34\ Shonkoff, Jack and Phillips, Deborah. From neurons to
neighborhoods: The science of early childhood development.
---------------------------------------------------------------------------
The existence of maternal depression and other adult mental health
disorders, for example, can negatively affect children if parents are
not capable of providing consistent sensitive care, emotional
nurturance, protection and the stimulation that young children need.
\35\ Maternal depression, anxiety disorders, and other forms of chronic
depression affect approximately 10 percent of mothers with young
children \36\--this number is even higher for families in poverty. In
fact, findings at enrollment from the Early Head Start Research and
Evaluation Project indicate that 52 percent of mothers reported enough
depressive symptoms to be considered clinically depressed. \37\ Not
surprisingly, lack of health insurance can add to parental stress. An
analysis of data from the 2000 National Survey of Early Childhood
Health found that ``mothers with uninsured children and those with
children with missed or delayed care were both significantly more
likely to be in poor mental health.'' \38\
---------------------------------------------------------------------------
\35\ Cohen, Julie, Onunaku, Ngozi, Clothier, Steffanie, and Poppe,
Julie. 2005. Helping young children succeed: Strategies to promote
early childhood social and emotional development. Washington, DC:
National Conference of State Legislatures and ZERO TO THREE.
\36\ O'Hara, Michael W. 1994. Postpartum depression: Causes and
consequences. New York, NY: Springer-Verlag Inc.
\37\ U.S. Department of Health and Human Services, Administration
for Children and Families. 2003. Early Head Start Evaluation and
Research Project, Research to practice: Depression in the lives of
Early Head Start families. Washington, DC. http://www.acf.hhs.gov/
programs/opre/ehs/ehs_resrch/reports/dissemination/research_briefs/
research_brief_depression.pdf (accessed May 10, 2007).
\38\ Mistry, Ritesh, Stevens, Gregory D., Sareen, Harvinder, De
Vogli, Roberto, Halfon, Neal, 2007. Parenting-related stressors and
self-reported mental health of mothers with young children. American
Journal of Public Health 97(7): 1261-1268.
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Early and sustained exposure to parental stress and depression can
influence the physical architecture of the developing brain, preventing
babies and toddlers from fully developing the neural pathways and
connections that facilitate later learning. Young children can sense
the stresses their parents or caregivers are experiencing, which in
turn, can affect the behavior and mental health of children themselves.
Children, particularly those who are from food insecure families, are
at higher risk of developing aggression, anxiety, depression, and
hyperactivity than food secure children. \39\ According to the Fragile
Families and Child Wellbeing Study, food insecure families were much
more likely to experience mental health problems in mothers and
behavioral problems in their three-year-olds than food secure families.
\40\ As children grow older, these behavioral problems continue to be
prevalent. Children from food insecure families were not only more
likely to receive mental health counseling, but were also more likely
to fight with their peers and steal than their more affluent peers.
\41\
---------------------------------------------------------------------------
\39\ Parker, Lynn. 2007. Food insecurity and obesity.
\40\ Ibid.
\41\ Ibid.
---------------------------------------------------------------------------
Diminished School Success
Health impairments and social-emotional problems also directly
affect later school success. Children who are sick or hospitalized miss
more days of school and have trouble learning, resulting in lower
grades and test scores and poorer cognitive development, school
readiness, and success. \42\ Children who start behind, stay behind.
When developmental delays and health impairments are detected and
treated early, however, children have a much better chance of school
success. In fact, a study of California's Children's Health Insurance
Program found that after one year of enrollment in the program,
children were more attentive in class (57% after vs. 34% before) and
more likely to keep up with their school activities (61% after vs. 36%
before). \43\ Without early and effective treatment, costs increase to
all of society as special education costs are estimated at about $4
billion per year. \44\
---------------------------------------------------------------------------
\42\ Ibid.
\43\ Ku, Leighton, Lin, Mark, and Broaddus, Matthew. 2007.
Improving children's health: A chartbook about the roles of Medicaid
and SCHIP.
\44\ Holzer, Harry J., Schanzenbach, Diane W., Duncan, Greg J., and
Ludwig, Jens. 2007. The economic costs of poverty in the United States:
Subsequent effects of children growing up poor.
---------------------------------------------------------------------------
Shifting the Focus from Treatment to Promotion and Prevention
As outlined above, the economic costs to society for poor physical,
social-emotional, and cognitive development of our nation's infants and
toddlers is absolutely staggering. The good news is that we can do a
lot to lower those costs by shifting the focus from treatment to
promotion and prevention. ZERO TO THREE's recommendations include:
Ensuring Access to a Medical Home for Every Child in the U.S.
Every child in the United States should have access to a medical
home--a regular pediatrician they see for ongoing care and follow-up.
The American Academy of Pediatrics calls for ``accessible, continuous,
comprehensive, family centered, coordinated, compassionate, and
culturally effective care.'' \45\ A regular pediatrician would
facilitate all aspects of pediatric care, including supervision of
care; patient and parent counseling about health, nutrition, safety,
and mental health; and the importance of well-child visits,
immunizations, and screenings and assessments. He or she should also
refer a child to early intervention services when appropriate and
coordinate care with other early childhood programs. \46\ By relying on
a single consistent health care provider, lower-income families can
avoid unnecessary and more expensive treatment in ERs, walk-in clinics,
and urgent care facilities, thereby reducing costs to all of society.
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\45\ American Academy of Pediatrics. 2002. The medical home.
Pediatrics 110 (1): 184-186. http://aappolicy.aappublications.org/cgi/
reprint/pediatrics;110/1/184.pdf (accessed November 9, 2007).
\46\ Ibid.
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Providing Adequate SCHIP Coverage for All Eligible Infants and Toddlers
The State Children's Health Insurance Program (SCHIP) has also
dramatically improved the health and well-being of our most vulnerable
children. Since SCHIP began in 1997, the percentage and number of low-
income uninsured children has fallen by more than one-third. \47\ This
is particularly important as publicly-insured children (those enrolled
in SCHIP and Medicaid) are more likely to have chronic conditions
requiring ongoing care, such as asthma, learning disabilities, and
health conditions. \48\ By insuring these children, we can safely and
effectively manage conditions rather than relying on the nation's
safety net for more expensive urgent care. Furthermore, children in
SCHIP are more likely to receive well-child visits, immunizations,
screenings, dental care, and other forms of preventive care, further
reducing the need for more costly interventions later. \49\
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\47\ Ku, Leighton, Lin, Mark, and Broaddus, Matthew. 2007.
Improving children's health: A chartbook about the roles of Medicaid
and SCHIP.
\48\ Ibid.
\49\ Ibid.
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Expanding Access to Comprehensive Early Childhood Programs
Comprehensive high quality early learning programs for infants and
toddlers, such as Early Head Start, can help to protect against the
multiple adverse influences that may hinder their development across
all domains. Research from the Early Head Start Research and Evaluation
Project, and its companion follow-up results, concluded that the
program is making a positive difference in areas associated with
children's access to health care, children's success in school, family
self-sufficiency, and parental support of child development. For
example, 28 months after enrollment in the Early Head Start program,
95% of infants and toddlers had received one or more well-child exams,
99% had received immunizations, and 69% had received screenings tests
(41% for hearing and 28% for lead). \50\ Early Head Start also produced
statistically significant, positive impacts on standardized measures of
children's cognitive and language development. Early Head Start
children demonstrated more positive approaches to learning than control
group children. \51\ Early Head Start also had significant impacts for
parents, promoting family self-sufficiency and parental support of
child development. Early Head Start children had more positive
interactions with their parents than control group children--they
engaged their parents more and parents rated their children as lower in
aggressive behavior than control parents did. Early Head Start parents
were also more emotionally supportive and less detached than control
group parents and provided significantly more support for language and
learning than control group parents. \52\ By expanding access to
quality early learning programs, we can reach children early in life
when we can have the greatest chance to improve future success.
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\50\ U.S. Department of Health and Human Services, Administration
for Children and Families. 2006. Health and health care among Early
Head Start children. http://www.acf.hhs.gov/programs/opre/ehs/
ehs_resrch/reports/health_care/health care.pdf (accessed November 9,
2007).
\51\ U.S. Department of Health and Human Services, Administration
for Children and Families. 2002. Making a difference in the lives of
infants and toddlers and their families: The impacts of Early Head
Start. http://www.acf.hhs.gov/programs/opre/ehs/ehs_resrch/reports/
impacts_exesum/impacts_execsum.pdf (accessed October 23, 2006). U.S.
Department of Health and Human Services, Administration for Children
and Families. 2006. Research to practice: Preliminary findings from the
Early Head Start prekindergarten followup. http://www.acf.hhs.gov/
programs/opre/ehs/ehs_resrch/reports/prekindergarten_followup/
prekindergarten_followup.pdf (accessed October 23, 2006).
\52\ Ibid.
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Increasing Investments in Family Income Supports and Nutritional
Programs
Finally, income supports and nutritional programs help low-income
families improve the healthy physical, social-emotional, and cognitive
development of their children. Child tax credits, the Earned Income Tax
Credit, and a meaningful minimum wage are key to helping families
obtain self-sufficiency. In addition, federal nutrition programs such
as the School Breakfast, School Lunch, After School Snacks, and Summer
Food Service Programs provide nutritionally-balanced foods for low-
income children. The Food Stamp program helps low-income families
purchase more food and improve their diets. The Child and Adult Care
Food Program provides funds for meals and snacks for children in child
care and Head Start/Early Head Start programs. And, the Supplemental
Nutrition Program for Women, Infants, and Children (WIC) Program
provides low-income nutritionally at-risk pregnant, breastfeeding and
postpartum mothers, infants, and children under the age of five with
food, nutrition education, and health care referrals. All of these
programs provide economic supports to struggling low-income families in
an effort to improve outcomes for their children.
Conclusion
During the first three years of life, children rapidly develop
foundational capabilities--physical, social-emotional, and cognitive--
on which subsequent development builds. These areas of development are
inextricably related. When young children do not have access to health
care because they are uninsured (or for other reasons), every aspect of
their development can suffer. These years are even more important for
infants and toddlers living in poverty. All young children should be
given the opportunity to succeed in school and in life. We must ensure
that infants, toddlers, and their families living in poverty have
access to quality, accessible, consistent, and culturally appropriate
health care and insurance. We must also ensure that low-income children
have access to developmentally appropriate early learning programs such
as Early Head Start to help ensure that they are ready for school. And,
finally, we must ensure that families struggling to make ends meet
receive income supports and nutrition assistance to ensure that their
infants and toddlers grow up healthy, happy, and ready to learn.
Providing supports to low-income at-risk families will have a trickle
down effect on our youngest children and thereby have even more
positive long-term benefits in our efforts to break the
intergenerational cycle of poverty.
I urge the Subcommittee to consider the very unique needs of babies
living in poverty as you address the impact of gaps in health coverage
on income security. Too often, the effect of our overall policy
emphasis is to wait until at-risk children are already behind
physically, emotionally, or cognitively before significant investments
are made to address their needs. We must change this pattern and invest
in at-risk infants and toddlers early on, when that investment can have
the biggest payoff--preventing problems or delays that become more
costly to address as the children grow older.
Thank you for your time and for your commitment to our nation's at-
risk infants, toddlers and families.
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