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Crowd Out. . . ?
TAKEN FROM CA HEALTHLINE E-NEWSLETTER
Study Finds Public Health Insurance
Programs Result in Only Small
Reduction in Uninsured 01/09/2002
A new study of public health insurance
programs in four states found that the
programs only led to a small reduction
in the number of uninsured residents
and enrolled a number of individuals
who could have received coverage from
private insurance, raising doubts
about the potential for a similar
program at the national level.
The study, conducted by Richard
Kronick and Todd Gilmer of the
University of California-San Diego and
appearing in the January/February
issue of Health Affairs, examined
public health insurance programs for
low-income adults who did not qualify
for Medicaid in Oregon, Washington,
Tennessee and Minnesota to determine
their "effect on the health insurance
status of low-income adults."
According to the study, the programs
had "partial successes," but about 30%
of low-income state residents still
lacked health insurance after the
states implemented the programs. Among
adults with incomes less than 100% of
the federal poverty level, the
programs reduced the number of
uninsured and led to only minor
"crowding out" -- the public coverage
of individuals who otherwise would
have private coverage. But among
adults with incomes between 100% and
200% of the federal poverty levels,
the programs did lead to crowding out;
combining the four states across this
population, 45% of the increase in
insured adults could be attributed to
crowding out of private coverage.
The study found that the Oregon
program had "virtually no crowding
out" of private health insurance and
"relatively little" crowd-out in the
program in Washington, where 80% of
enrollees would have lacked health
coverage without the program. However,
the study found that 42% of the
enrollment in Tennessee's program
resulted from crowding out of private
insurance and 100% of enrollment in
the Minnesota program resulted from a
decrease in private coverage, despite
the "greater explicit protections
against crowding out" in the latter
two states. It is also possible that
some of the enrollees in the state
programs might have been crowded out
of Medicaid.
As a result, the study concluded that
"there is much uncertainty about the
amount of crowding out we might expect
if similar programs were implemented
in other states."
The study also predicted that a
national public health insurance
program
similar to the programs examined in
the four states would only lead to a
small reduction in the number of
uninsured adults in the United States,
which currently stands at 31 million.
According to the study, only 5.7
million to 7.6 million adults would
likely
enroll in a national program similar
to the programs in the four states,
which would "still leave a sizable
problem." In addition, only about four
million to five million of the
enrollees in the national program
would have
lacked health insurance without the
program, "with most of the remaining
enrollees 'crowded out' of private
insurance."
The study concludes, "If expanded
programs of subsidized insurance for
low-income adults are to greatly
reduce the numbers of uninsured
persons,
they must be designed, implemented,
financed and marketed more
successfully than were the programs we
studied" (Kronick/Gilmer, Health
Affairs, January/February 2002). An
abstract of the study, titled
"Insuring Low-Income Adults: Does
Public Coverage Crowd Out Private?" | 
