Expanding kids’ coverage pays dividends

Iowa is one of 23 states receiving a children’s health program bonus for its performance in 2011.

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Andrew Cannon

Iowa has made a huge effort in recent years to expand health insurance coverage to children. Those efforts are paying dividends to the newly covered children and their families, of course, but also to the state.

The 2009 Children’s Health Insurance Program Reauthorization Act (CHIPRA) gave states new tools to make insuring kids easier. Many of these tools meant a reduced workload for state enrollment officials, and made it easier for families to obtain coverage for their children. CHIPRA also provided cash bonuses to states that implemented the tools and excelled in enrolling children in public health insurance programs.

On Wednesday, the U.S. Department of Health and Human Services announced that Iowa is one of 23 states receiving a CHIPRA bonus for performance in 2011. Iowa is one of just five states to have implemented nearly all of the CHIPRA enrollment tools. Iowa’s $9.5 million bonus can be used to further improve enrollment and eligibility processes or to offset the cost of increased enrollment.

In addition to streamlining the  Medicaid and hawki (Healthy and Well Kids in Iowa — the state’s CHIP program) enrollment process, Iowa has also increased enrollment beyond a baseline level, further increasing the size of the bonus. In November 2011, more than 34,000 children were enrolled in hawk-i, with 248,000 enrolled in Medicaid, compared to 22,300 and 219,000, respectively, in July 2009, just months after CHIPRA passed.

Undoubtedly, the effect of thousands of Iowa parents losing their jobs and health insurance has contributed to enrollment increases. Nonetheless, the tools CHIPRA made available, as well as Iowa’s implementation of many of them, made the process of enrolling kids in public health insurance programs less onerous for many parents at a time they most needed assistance.

Posted by Andrew Cannon, Research Associate

Thanksgiving thoughts on hunger

As we discuss and debate our fiscal future, proposals should be weighed by their effects on people, not with how well the line up with some ideological ideal.

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Andrew Cannon

Hunger will probably be the last thing on our minds this Thursday, as we enjoy Thanksgiving feasts.

But for thousands of our neighbors, hunger an everyday reality.

Each year, the U.S. Department of Agriculture (USDA) measures food security in the United States. Food security is defined as having adequate food and nutrition at all times for a healthy and active lifestyle.

An average of 12 percent, or 340,000 Iowans lacked adequate food and nutrition, or was food insecure, over a three-year period ending in 2010.

This is certainly not a new problem, but it is one that is on the rise in recent years.

Thousands of Iowans lost jobs or saw income drop as a result of the most recent recession. Food insecurity rates subsequently rose. But that number has been on the rise for much longer than just the past several years. In the mid-’90s, about 8 percent of Iowans were food insecure. By 2003, that figure had risen to 9.5 percent. By 2005, nearly 11 percent of Iowans were food insecure.

Solutions for problems as complex as food insecurity are never obvious. One thing, however, is obvious: Cutting food assistance programs will not help.

There’s an epidemic of budget-cut fever right now. Lost in the fiscal austerity discussions, however, are the effects such cuts would have on those who have been hardest hit by the recent recession, continuously rising food and fuel costs, and stagnant wages.

While some food assistance programs like the Supplemental Food Assistance Program or SNAP (formerly Food Stamps) are safe — for now — from cuts, many others, including free and reduced-price school lunch, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) and the Emergency Food Assistance Program (TEFAP), which distributes nutritious fruits, vegetables, meat and poultry and other foods to food banks and pantries, are at risk of severe cuts.

As we discuss and debate our fiscal future, proposals should be weighed by their effects on people, not with how well the line up with some ideological ideal.

I recognize that I have so much for which to be thankful. The adoption of that standard by lawmakers would only make me more grateful.

Posted by Andrew Cannon, Research Associate

New Census measure shows good policy reduces poverty

The new measure helps policymakers view the impact of public initiatives to alleviate poverty.

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Andrew Cannon

Working-family tax credits and food assistance are among ways public policy lifts millions of Americans out of poverty. At the same time, continued high unemployment rates and low wages have put more and more Americans into poverty.

Those are some of the inescapable conclusions from the Census Bureau’s latest information.

In order to better capture what poverty means and how public programs help (or fail) to alleviate it, the Census Bureau devised a new poverty measure.

The Supplemental Poverty Measure (SPM) does not replace the official poverty measure, which is used to determine eligibility for many public programs, but provides policymakers with another way of viewing the impact of public programs.

The SPM measures what it costs to maintain a minimal standard of living using average costs of necessities: food, rent, clothing, utilities, etc. In addition, SPM also accounts for the increase in overall well-being individuals experience as a result of public programs. Those include the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps), the Earned Income Tax Credit (EITC) and the Low Income Heating and Energy Assistance Program (LIHEAP), among others. It also accounts for the decrease in overall well-being an individual experiences through out-of-pocket medical costs, child care, child support, and other expenses.

Using the SPM, 49 million Americans, or 16 percent experienced poverty in 2010. The official poverty measure shows about 46.6 million or 15.2 percent in poverty. Among seniors, the difference is even more drastic: The official measure found 3.5 million seniors, or 9 percent in poverty in 2010; the SPM found 6.2 million or 15.9 percent in poverty.

Not all the results of the SPM are so grim, however. The SPM finds a lower rate of poverty among children than the official measure, 18.2 percent vs. 22.5 percent. As noted above, this is because the SPM accounts for the increase in income and living standard individuals experience when they benefit from public support programs.

Additionally, the SPM illustrates the effect public programs have on reducing poverty. For instance, SNAP keeps 5.2 million people, including 973,000 children, out of poverty. The EITC prevents about 6 million people, more than 1.1 million of whom are kids, from living in poverty.

On the other hand, medical out-of-pocket expenses, meaning everything from co-pays and deductibles to paying for medical services with cash or through debt, added about 10.1 million, or 3.3 percentage points, to the number of Americans in poverty.

Successful problem-solving requires that first the problem be understood. The Supplemental Poverty Measure is an important new tool for policymakers in alleviating poverty.

Posted by Andrew Cannon, Research Associate

One more data point in the public employee compensation debate

Public-sector workers provide services on which we all rely. If anything, they are undercompensated relative to similarly educated private-sector workers.

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Andrew Cannon

In the discussion of public workers and their compensation, let’s not lose sight of basic facts.

First, we rely on public workers every day. We may not see the public workers on a daily basis, but we certainly benefit from their work and services daily. Many of those services are such a normal part of our lives that we don’t even think about it.

So think about it for a minute. When you flush the toilet and the wastewater goes away but clean water comes out of your kitchen faucet, that’s the work of public-sector employees. The garbage and recycling you left on your curb Monday night did not magically disappear Tuesday morning; city sanitation workers collected that waste and took it away. Public employees educate our children in our elementary, middle and high schools and in our community colleges and universities. They protect our neighborhoods and respond to emergencies. They treat our ill or injured relatives in hospitals and clinics; they keep our roads in working order and ensure that traffic signals work properly; they work to protect kids in dire circumstances.

Second, the reality is that these workers are underpaid when you make a fair comparison to comparable private-sector workers. IPP’s “Apples to Apples: Private-Sector and Public-Sector Compensation in Iowa” report highlighted this reality last February. Most public-sector workers earn less than similarly educated private-sector workers. When benefits are included, the gap in Iowa narrows but still remains.

Ours was not the only report to issue such findings. Such findings have been replicated again and again, all over the nation. Some reports found that benefits erased the compensation gap or even gave public workers a slight “advantage”; others matched Iowa’s findings in that benefits narrowed the gap but did not completely eliminate it.

Well, here’s another data point. “Comparing Compensation: State-Local Versus Private Sector Workers,” written by Boston College researchers, echoes many of the findings of the IPP report (as well as reports from the Economic Policy Institute, the Institute for Research on Labor and Employment at UC-Berkeley, and the Center for State and Local Government Excellence studies).

The new Boston College report is notable for another reason, however. It examines assertions designed to undermine or call into question the findings of studies like IPP’s. Specifically, the report includes early retiree health benefits in the benefit package, adjusts for differences in pension/retirement packages between the two sectors, and examines the claim that public employees enjoy greater job security than private sector workers (when controlled for education level, they do not).

In sum, state and local government workers are paid about 9.5 percent less than private-sector workers. When benefit packages are included, the gap shrinks, but private-sector workers come out about 4 percent better.

Public-sector workers provide services on which we all rely. If anything, they are undercompensated relative to similarly educated private-sector workers. Should the debate around public employee compensation continue in coming months, let’s remember those two simple facts.

Better yet, let’s remind our family, friends, neighbors and elected representatives of those facts if the opportunity and need should arise.

Posted by Andrew Cannon, Research Associate

Health reform stakeholders should be careful what they wish for

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Andrew Cannon

Two thoughts as the 2012 legislative session nears: What is worth your time and attention? And, be careful what you wish for.

Both are vital reminders for all of us in our increasingly busy world. But as Iowa lawmakers again consider proposals for the competitive health insurance marketplace, or health insurance exchange, these reminders are relevant to health reform stakeholders.

Last legislative session, way back before the Fiscal Year 2012 budget gridlock, or the property tax debate, several lawmakers issued proposals for the creation of an exchange.

One proposal (which won the support of the health underwriters’  and insurance brokers’ lobby and no one else) seemed far more interested in protecting the insurance brokers than it was in creating an exchange that helps Iowans get affordable, quality coverage. Under that proposal, every purchase in the exchange would have been mediated by a broker, who, by law, would have received at 5 percent commission on each insurance sale in the exchange.

It’s worth remembering how the exchange is intended: Individuals, families, and small businesses will be able to quickly and easily compare health insurance plans — based on price, value, benefits and other relevant factors — and premiums will be based strictly on age, geographic area, and smoking status. Pre-existing conditions will be a thing of the past.

The exchange should permit small businesses to leverage some of the bargaining power of the larger employers. Many small businesses that offer employees coverage will be eligible for tax credits.

According to projections from the nonpartisan Congressional Budget Office, however, most exchange users will be individuals and families. Low- and moderate-income (up to 400 percent of the federal poverty level, or about $89,000 for a family of four) individuals and families who do not receive insurance through an employer will be eligible to receive sliding-scale premium assistance in the form of tax credits. Small businesses are likely to comprise a much smaller slice of the exchange-user pie.

This brings us back to the question this post opened with, what is worth your time and attention?

Do brokers really want to be involved in every purchase of health insurance in the exchange? Remember that most of these exchange customers won’t be HR folks, familiar with the ins and outs of insurance terminology. Most won’t be the proprietors of small businesses that have dealt with brokers in the past and know what sort of benefit and cost-sharing packages their employees have or haven’t liked.

Most exchange users are going to be members of ultra-small groups — families. Many will have moderate levels of income ($37,000 a year to about $89,000 a year for a family of four). For many, the terminology of health insurance terminology will be a new language. Deciding what benefit package they want or need will be a calculus as difficult as, well, calculus.

Is a bill like last session’s SF391 really the best use of a broker’s time and attention? I’m not a broker, so I’m in no position to say.

But it seems that rather than spending four hours describing insurance terms, benefits, and options to a family of four that has never purchased health insurance and earns $35,000 a year is a far less effective use of time than spending an hour on the phone with a seasoned HR rep from a business with 30, or even just 10 employees. And let’s not forget that many exchange users will end up not even purchasing insurance, but become enrolled in the newly expanded Medicaid.

Regardless of health reform implementation, there will be continued demand for the services of insurance brokers. They provide a valuable service, and are trusted by many small businesses and entrepreneurs. That won’t change.

But if brokers push for a repeat of last year’s offerings, they may just give themselves business that they don’t really want. Be careful what you wish (and lobby) for.

Posted by Andrew Cannon, Research Associate

Health premiums rise again; is there an end in sight?

Stagnant wages give health insurance premium increases more sting — and employers are requiring employees to contribute more toward premiums as they keep rising.

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Andrew Cannon

Anyone hoping for a reprieve from rising health insurance costs — everyone, in other words — won’t like the results of the Kaiser Family Foundation’s annual “Employer Health Benefits Survey.”

Heck, even those of us who were just hoping for premium growth near the inflation rate are disappointed.

The survey, in which more than 2,000 businesses are interviewed about the health insurance plans they offer (or in some cases, do not offer) to employees, revealed that premiums for singles increased by 8 percent while family premiums increased by 9 percent in 2011. The average premium for single coverage passed $5,400, while family coverage costs averaged $15,000.

Fifteen-thousand dollars. That’s more than the federal poverty level for a family of two. It is more, as Kaiser Family Foundation President and CEO Drew Altman noted, than the cost of a small car.

Stagnant wages give this spike even more sting. Increases in income are not offsetting these increases, and employers are requiring their employees to contribute more and more toward premiums as they continue to rise.

So, is there any end in sight? How long will premiums keep rising, and how high can they go?

It’s hard to say. Health care costs are driven by a number of factors and, as the Kaiser report illustrates, remain difficult to predict.

The health reform law, the Affordable Care Act, offers some hope for relief: Small businesses that offer health insurance to employees can receive tax credits, low- and middle-income households that do not receive insurance through an employer will be eligible for premium assistance, and the law features a number of pilot programs aimed at reducing costs.

Like any policy, however, it will require constant monitoring and occasional tweaking to meet its goals: making health care affordable and accessible for all.

Posted by Andrew Cannon, Research Associate

Census data suggests health reform is working

The new Census data offer promise that health reform may be working.

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Andrew Cannon

Despite disappointing increases in poverty and decreases in median income, new data released by the Census Bureau carried a glimmer of good news.

While the ranks of those lacking health insurance increased in almost every other demographic group, even seniors eligible for Medicare — the number and rate of uninsured young adults (aged 19-25) actually decreased (see Table 8 of this Census Report).

And even more startling: The decrease in the uninsured rate of uninsurance for young adults (1.6 percentage points) was larger than the percentage-point increases in uninsured rates among other adult cohorts.

What was the driving force in reducing uninsured rates among young adults?

Census data provide only a snapshot, and do not offer a definitive explanation.

However, there was one large policy change at the beginning of 2010 that might just help explain this change.

While young adults make up a small share of the overall population, they typically comprise a disproportionate share of the uninsured population. Health reform  — signed into law March 2010, sought to change that. The health reform law, or the Affordable Care Act, contained a provision allowing young adults through age 25 to remain on a parent’s health insurance plan if they did not receive an insurance offer through their employment.

Caution is warranted in ascribing a cause to the change in the uninsured rate among young adults. Nevertheless, reports seem to back up the notion that the change is at least partially due to health reform’s policy changes.

In other words, the new data offer promise that health reform may be working.

By Andrew Cannon, Research Associate