The Tattered Safety Net James G. Anderson, Ph.D. Purdue University

Number of Uninsured in the U.S.

Health Insurance Coverage for Children 1999

Health Insurance Coverage for Adults 1999

Health Insurance Coverage by Family Income Level 1999

SCHIP Enrollment

What is the Safety Net? Health providers who have a legal obligation to provide free or reduced-fee care to those who could not otherwise afford it.

Who are the Safety-Net Providers? Medicaid (40.6 million low income women, children, elderly and disabled in 1998). Safety Net Hospitals in 1997 (482 hospitals) Community and Migrant Health Centers (600 centers). Family Planning Clinics (4,000 clinics). Ryan White AIDS Program (136 projects). Health care for the homeless (129 projects). Public Health Departments. Rural Health Clinics (2,500 clinics).

Why Do We Need a Safety Net? 43.4 million (16%) of Americans without health insurance on any given day in From 1990 to 1994 U.S. population receiving insurance coverage through employers fell from 61% to 57%. A cap on Medicaid enrollment would result in 67 million (24%) of population uninsured by 2002.

Urban Public Hospitals ( ) Accounted for 7% of all hospitals. Provided 19% of all emergency room visits. Provided 18% of all outpatient visits. Nearly 50% of these patients were uninsured.

Who Pays for the Safety-Net? $89 billion federal funds for Medicaid in $69 billion in state funds from Medicaid in $17 billion federal funds for low-income hospitals in Medicaid costs consume 20% of state budgets. Local governments spent 17% of county budgets on health care in Hospitals provided $18.5 billion in uncompensated care in 1997.

Medicaid: The Insurance Safety-Net Provides coverage for 58% of those with incomes below the federal poverty line (2001: $8,590 individual; $17,650 family of four). Pays for 1 of 3 births. Provides coverage for 1 of 4 children. Provides coverage for 40% AIDS patients. Pays for 66% of nursing home care.

What Problems Do Safety net Providers Face? Marketplace pressures will make it difficult to make up losses. By 2002 hospitals will lose $20 billion in Medicaid; $14.4 billion in Medicare; $20 billion from private payers; $25 billion due to uncompensated care. Teaching and inner-city hospitals will operate at a loss; many will close. Providers will try to shift costs back to employers raising prices $1,000 per covered worker.

Strategies for Expanding Health Insurance Coverage Tax Credits. Expanding Public Programs (e.g., Medicaid, SCHIP) Combination of the two approaches.