The Arkansas Times named its person of the year all the Arkansans who are newly insured. There was one vignette that stuck with me:
The average high school senior isn’t too worried about insurance coverage, but for Fairfield Bay native Crystal Bles, it was a priority.
When Bles began studying welding last fall at the University of Arkansas Community College at Morrilton, she was on the verge of aging out of ARKids, the state’s program covering low- to middle-income children. (ARKids is mostly paid for with federal dollars, but the funding streams are distinct from those fueling Obamacare.) While many young adults now rely on their parents’ insurance to stay covered until age 26 — thanks to another change created by the Affordable Care Act — Bles’ parents were uninsured….
She “most definitely” knew she needed coverage, she said, given her chosen area of study. “In welding, people tend to get injured.”…
For young Arkansans like Bles, the private option has already become a fact of life [my emphasis]— a vital government service, funded by taxpayers and provided for taxpayers, just like public schools and food stamps, highways and Pell grants, law enforcement and libraries.
There have been numerous liberal attempts to slowly build towards single payer and universal coverage (two very distinct issues that don’t need to relate) by proposals to lower Medicare eligibility age. The theory of change is that taking the most expensive people off of the private market (60 to 64.99 year olds) and moving them into Medicare with the lower reimbursement rate will save money systemically and not face significant opposition as employers and private insurers will want to dump their most expensive covered lives to someone else. From a system point of view, the biggest problem with American healthcare is pricing of services which leads to massive access problems as lots of people can’t afford to get good care. So anything that shifts people from the most expensive part of the covered system (employer sponsored insurance) to a less expensive part (Medicare) is a big win. The final part of the theory of change is that the change to Medicare for 60 year old individuals works well and is not too scary so the next slice of the salami can be pursued for 55 year olds and then repeat until their is universal coverage through a single payer scheme.
What if we are trying to cut the salami from the wrong end?
Kids are adorable, sympathetic and, after they start crawling, dirt cheap to cover. Kids use lots of low cost services but they are unlikely to need high cost services.
What if the Childrens’ Health Insurance Program (CHIP) was expanded to be the most probable insurance to every kid between the ages of birth and nineteen?
This would mean that every kid would be covered. Kids who are currently covered by their parents’/guardians’ employer sponsored coverage would be able to buy in at cost. Kids who on Medicare would be shifted over to CHIP. Kids who are on Medicaid would be shifted over to CHIP. Kids who are not covered would be automatically enrolled into CHIP with the assumption that CHIP is the pediatric payer of last resort. Every kid would be covered or be presumed to be covered. And it would create specialized knowledge on how to pay for care for kids.
It would be universal coverage of kids via multiple payers. Furthermore, CHIP insurance is good. It has an actuarial value in the high 90’s which is far better than most employer sponsored plans.
Politically, it may be an easier lift because insuring a kid is far cheaper than bringing the cost of healthcare of a 64 year old onto the books. On Exchange policies, a 64 year old is 4.5 times as expensive to cover as a 19 year old. The 3:1 age banding applies to 21-64. A 19 year old is more expensive than a 12 year old. Additionally, kids are innocent and the fun game of assigning people to deserving and undeserving of assistance is played at a far lower intensity when kids are involved. They don’t get to choose their parents.
This plan would have three major goals. The first is to get every kid covered with usable insurance. We’re almost there, but there are kids who are still uninsured and even more kids who are significantly underinsured.
The second is to continue to bend the cost curve. US employer sponsored insurance tends to pay providers the most per unit of service. Medicare and low cost Exchange programs pay significantly less than standard commercial rates. CHIP varies by state but CHIP tends to pay roughly Medicare to slightly below Medicare rates. Medicaid pays significantly less than Medicare. Moving kids from Medicaid to CHIP will lead to higher public expenditures as providers will see higher rates. However, this should open up networks and make appointment availability a much lower concern for kids on CHIP than if they were on Medicaid. The big system savings would be the reduction of provider payment rates from kids who are currently covered by employer sponsored insurance. It would shift a significant number of individuals from plans that pay 150% or 200% of Medicare rates to plans that pay 95% or 105% of Medicare rates. Employer groups would likely get on board with this as it reduces their covered life head count and their direct costs even if they are paying 100% of the cost of coverage for their employees’ kids. This would have a nice secondary effect of reducing job lock. Employers usually like job lock, but it is not a good thing from a social perspective.
The third goal is subtle. It is to establish long term facts on the ground. Teenagers would have always have been covered and insured without their parents worrying too much about taking them to the doctors. As they become young adults would just assume that they should have health insurance and that they should be covered at a reasonably price. As successive cohorts grow up with universal coverage and are thrown into the mess of the American healthcare system in their mid to late 20s after they age off of their parents ESI, they’ll be pissed and seek to get back what they had. And that is a powerful political force for universal coverage.