THE
COMMONWEALTH
FUND
Karen Davis
President
The Commonwealth Fund kd@cmwf.org
Invited Testimony
House Committee on Ways and Means
Subcommittee on Health
September 23, 2008
THE
COMMONWEALTH
FUND
1

THE
COMMONWEALTH
FUND
2

Military
(1%)
Uninsured
(15%)
Individual
(5%)
Medicaid
(10%)
Medicare
(13%)
Health Insurance Coverage
45.7 Million Uninsured, 2007
Employer
(55%)
Military
(1%)
Uninsured
(17%)
Individual
(6%)
Medicaid
(11%)
Medicare
(2%)
Employer
(62%)
Total population Under-65 population
Source: Authors’ estimates based on S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health
Insurance? The Current and Future Role of U.S. Companies in the Provision and Financing of Health Insurance
(New York: The Commonwealth Fund, Sept. 2007) and analysis of the Current Population Survey, March 2008, by Bisundev Mahato of Columbia University.
THE
COMMONWEALTH
FUND
3

Percentage of Uninsured Children Has Declined
Since Implementation of SCHIP While Uninsured
Working-Age Adults Have Increased, 1994–2007
Percent of population group uninsured
25
20
17.1 17.6
17.2
17.7
17.7
17.3
17.2
17.9
18.9
19.5
19.5
19.8
20.3 19.7
Nonelderly
Adults
(Ages 18–64)
4
15
10
13.1
12.7
13.6 13.6
13.9
12.5
11.6 11.3 11.2 11.0
10.5 10.9
11.7
11.0
Children
(Ages 0–17)
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: P. Fronstin, “Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2008
Current Population Survey” Issue Brief No. 321 (Washington, D.C.: Employee Benefit Research Institute, Sept. 2008).
THE
COMMONWEALTH
FUND

Uninsured Rates, by State,
Two-Year Average, 2006–07
MA
7.9%
TX
24.8%
7.9%–11%
11%–13.8%
13.8%–17.25%
17.25%–24.8%
Source: DeNavasWalt C, Proctor B, and Smith J. “Income, Poverty, and Health Insurance Coverage in the United States: 2007.” Washington: Census Bureau, 2008.
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COMMONWEALTH
FUND
5

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COMMONWEALTH
FUND
6

25 Million Adults Underinsured in 2007,
Up from 16 Million in 2003
Uninsured during the year
45.5
(26%)
Insured all year, not underinsured
110.9
(65%)
Uninsured during the year
49.5
(28%)
Insured all year, not underinsured
102.3
(58%)
7
Insured all year, underinsured
15.6
(9%)
2003
Adults ages 19–64
(172.0 million)
Insured all year, underinsured
25.2
(14%)
2007
Adults ages 19–64
(177.0 million)
*Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or more of income; medical expenses equaled 5% or more of income if low-income (<200% of poverty); or deductibles equaled 5% or more of income.
Source: C. Schoen, S. R. Collins, J. L. Kriss, and M. M. Doty, “How Many Are Underinsured? Trends Among U.S.
Adults, 2003 and 2007,” Health Affairs Web Exclusive, June 10, 2008. Data: Commonwealth Fund Biennial Health
Insurance Surveys (2003 and 2007).
THE
COMMONWEALTH
FUND

Almost Three-Fourths of Low-Income Adults
Ages 19–64 Are Uninsured and Underinsured, 2007
8
80
60
40
20
0
32
14
28
Total
72
24
Underinsured*
Uninsured during year
48
27
11
16
Under 200% of poverty 200% of poverty or more
* Underinsured defined as insured all year but experienced one of the following: medical expenses equaled
10% or more of income; medical expenses equaled 5% or more of incomes if low-income (<200% of poverty); or deductibles equaled 5% or more of income.
Data: 2007 Commonwealth Fund Biennial Health Insurance Survey (Schoen et al. 2008).
THE
COMMONWEALTH
FUND

An Estimated 116 Million Adults Were Uninsured,
Underinsured, Reported a Medical Bill Problem, and/or
Did Not Access Needed Health Care Because of Cost, 2007
9
Medical bill/debt problem
17.7 million
10%
Adequate coverage and no bill or access problem
61.4 million
35%
Medical bill/debt and cost-related access problem
54.4 million
31%
Uninsured anytime during the year or underinsured
17.6 million
10%
Cost-related access problem
25.9 million
15%
177 million adults, ages 19–64
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).
THE
COMMONWEALTH
FUND

Uninsured and Underinsured Adults Report
High Rates of Cost-Related Access Problems
Percent of adults ages 19–64 who had cost-related access problems in the past 12 months
75
50
25
31
19
46
54
45
20
Total
Insured all year, not underinsured
Insured all year, underinsured
Insured now, time uninsured in past year
Uninsured now 57
60
37
39
34
45
47
31
42
24 25
9
13
15
45
29
60
72 71
10
0
Did not fill a prescription
Did not see specialist when needed
Skipped medical test, treatment, or follow-up
Had medical problem, did not see doctor or clinic
Any of the four access problems
THE
COMMONWEALTH
FUND
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

Sixty Percent of Adults Who Were Underinsured or 11
Uninsured Reported Medical Bill Problems or Debt
Percent of adults ages 19–64
75 Insured, not underinsured Underinsured Uninsured during year
61 61
50
43
48
47
36
25
23
29
31
32
19
26
13
8 8
0
Not able to pay medical bills
Contacted by collection agency*
Had to change way of life to pay medical bills
Medical bills being paid off over time
Any medical bill problem or outstanding debt
THE
COMMONWEALTH
FUND * Includes only those individuals who had a bill sent to a collection agency when they were unable to pay it.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

Insured Adults with Less Comprehensive Coverage and Benefit
Limits Are More Likely to Face Medical Bill and/or Debt Problems
12
Percent of continually insured adults ages 19–64 with bill and/or debt problems
Has both Rx and Dental Coverage
Has neither Rx nor Dental Coverage
Deductible is less than 5% of income
Deductible is more than 5% of income
Annual premium is less than 10% of income
Annual premium is 10% or more of income
No expensive bills for services not covered
Had expensive medical bills for services not covered by insurance
MD did not charge more than insurance covered
MD charged more than insurance would pay; patient paid difference
Health plan does not limit total dollar amount
Health plan limits total dollar amount
0
Source: The Commonwealth Fund Biennial Health Insurance Survey, 2007.
22
29
44
33
53
30
59
65
24
56
27
43
25 50 75
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COMMONWEALTH
FUND
100

Underinsured Adults Report Higher Rates of Health Insurance 13
Plan Problems than Adults with Adequate Insurance
Percent of adults ages 19–64 who were insured all year and had problems with health insurance plan
75
All insured adults Insured all year, not underinsured Insured all year, underinsured
64
51
47
50 44
38
34
32
42
26
22
28
25
25
0
Had expensive medical bills for services not covered by insurance
Doctor charged more than insurance would pay and you had to pay difference
Had to contact insurance company because they did not pay a bill promptly or denied payment
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).
Any problem with health plan
THE
COMMONWEALTH
FUND

Prescription Drug Cost-Sharing, Average Copayments
Among Covered Workers, 2000–2007
$70
$60
$50
$40
$30
$20
$10
$0
$8
$11
2000
$15
2007
$25
$29
$43
$63
Generic Preferred Non-Preferred Fourth Tier
THE
COMMONWEALTH
FUND Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits ,
2007 Annual Survey.

Annual Outpatient Visits Coverage Among Workers 15 with Mental Health Coverage, 2006
>50
8%
No Limit
13%
31–50
14%
20 or Less
35%
21–30
30%
All Plans
Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits ,
2007 Annual Survey.
THE
COMMONWEALTH
FUND

75
Uninsured and Underinsured Adults with Chronic Conditions
Are More Likely to Visit the ER for Their Conditions
16
Percent of adults ages 19–64 with at least one chronic condition*
Total
Insured all year, not underinsured
Insured all year, underinsured
Insured now, time uninsured in past year
Uninsured now
62
64
50
46
43
33
33
26
32
25
15
19
0
Skipped doses or did not fill prescription for chronic condition because of cost**
Visited ER, hospital, or both for chronic condition
* Hypertension, high blood pressure; heart disease; diabetes; asthma, emphysema, or lung disease.
** Adults with at least one chronic condition who take prescription medications on a regular basis.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).
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COMMONWEALTH
FUND

THE
COMMONWEALTH
FUND
17

Employer Coverage Continues to Erode for Employees of Small Firms
Percent of firms offering health benefits
2000
100
80
76
75 69
60
57
50 45
2007
91
83
97
94
99 99
18
25
0
Total 3–9 workers
10–24 workers
25–49 workers
50–199 workers
200+ workers
Source: S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health Insurance? The Current and Future
Role of U.S. Companies in the Provision and Financing of Health Insurance (New York: The Commonwealth Fund,
Sept. 2007). Data: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits ,
2000 and 2007 Annual Surveys.
THE
COMMONWEALTH
FUND

Three of Five Workers with Any Time Uninsured Are
Self-Employed or in Firms with Fewer than 100 Workers
19
Don’t know/refused
7%
500 or more employees
19%
Self-employed/1 employee
12%
2–19 employees
30%
100–499 employees
15%
20–99 employees
17%
Full-time or part-time working adults ages 19–64 with any time uninsured, by employer size
(27.5 million)
THE
COMMONWEALTH
FUND
Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

Single Premium by Size of Firm,
Adjusted for Actuarial Value
Dollars
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
$3,383
$3,150
All small
(1-49)
All large
(50 or more)
$3,579
$3,354
$3,146
$3,205 $3,134
1-9
Employees
10-24
Employees
25-99
Employees
100-999
Employees
1000+
Employees
20
THE
COMMONWEALTH
FUND Source: J. Gabel, R. McDevitt, L. Gandolfo et al., “Generosity and Adjusted Premiums in Job-Based Insurance:
Hawaii Is Up, Wyoming Is Down,” Health Affairs, May/June 2006 25(3):832 –43.

Small-Firm Workers More Likely than Large-Firm
Workers to Contribute Large Share of Premium for Family Coverage
21
All Firms Large Firms
(200+ workers)
Small Firms
(3–199 workers)
28% 24%
63%
37%
72% 76%
Worker Contribution Firm Contribution
Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits ,
2007 Annual Survey.
THE
COMMONWEALTH
FUND

Deductibles Have Risen Sharply,
Especially in Small Firms, Over 2000–2007
Mean deductible for single coverage (PPO, in-network)
2000
$900
$750
$600
461
667
$450
$300
$150
$0
187
210
Total Small firms, 3–199 employees
2007
157
382
Large firms, 200+ employees
22
PPO = preferred provider organization. PPOs covered 57 percent of workers enrolled in an employer-sponsored health insurance plan in 2007.
Source: The Kaiser Family Foundation/Health Research and Educational Trust,
Employer Health Benefits , 2000 and 2007 Annual Surveys.
THE
COMMONWEALTH
FUND

$2,000
Deductible for Single Coverage by Plan Type and Firm Size, 2007
Large Firms Small Firms $1,596
$1,865
$1,500
23
$1,000
$500 $343
$0
HMO
$382
$667
$408
$751
PPO POS HDHP
THE
COMMONWEALTH
FUND Source: Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits ,
2007 Annual Survey.

People with ESI* Who Say That Employers
Do a Good Job Selecting Quality Insurance Plans
24
Percent
100
74
76
75 68
75
69 70
75
50
25
0
Total <200% 200%+
% FPL
<20 20–99 100–499 500+
Number of employees in firm
*ESI = employer-sponsored insurance. FPL = federal poverty level.
Note: Based on respondents age 1964 who were covered all year by their own employer’s insurance.
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND

THE
COMMONWEALTH
FUND
25

Individual Market Is Not an Affordable Option for Many People
26
Adults ages 19–64 with individual coverage or who thought about or tried to buy it in past three years who:
Found it very difficult or impossible to find coverage they needed
Found it very difficult or impossible to find affordable coverage
Were turned down or charged a higher price because of a pre-existing condition
Never bought a plan
Total
34%
58
21
89
Health
Problem
No
Health
Problem
<200%
Poverty
200%+
Poverty
48%
71
33
92
24%
48
12
86
43%
72
26
93
29%
50
18
86
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to Health
Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND

Adults with Employer Coverage
Give Their Health Plans Higher Ratings
Than Those in the Individual Market
Percent of adults ages 19–64 insured all year with private insurance
75
Very good
Excellent
53 54
50
31 32
34
25 20
22 22
14
0
Total ESI Individual
27
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to Health
Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Health Care Costs Concentrated in Sick Few—
Sickest 10% Account for 64% of Expenses
28
Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2003
1%
5%
10%
Expenditure
Threshold
(2003 Dollars)
24% $36,280
50%
U.S. population
49%
64%
$12,046
$6,992
97%
$715
Health expenditures
THE
COMMONWEALTH
FUND Source: S. H. Zuvekas and J. W. Cohen, “Prescription Drugs and the Changing Concentration of Health Care Expenditures,” Health Affairs , Jan/Feb 2007 26(1): 249 –257.

Risk Pooling and Employer Premium Contributions Lower the 29
Cost of Health Benefits for Adults with Employer Coverage
Relative to Those with Individual Market Coverage
Percent of adults ages 19–64 insured all year with private insurance
75 Annual out-of-pocket premium $6,000 or more
Annual out-of-pocket premium $3,000–$5,999
54
50
32
25 20
7
13
18
5
13
22
0
Total Employer Individual
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
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COMMONWEALTH
FUND

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COMMONWEALTH
FUND
30

Only Two Percent of Premiums in Medicare and
Medicaid Are Spent on Non-Medical Expenditures
31
Percent of premiums spent on non-medical expenditures
Non-group 25–40%
15–25% Small group
Large group
Medicaid 2%
5–15%
Medicare 2%
0 10 20 30 40 50
Source: K. Davis, B. S. Cooper, and R. Capasso, The Federal Employees Health Benefit Program: A Model for
Workers, Not Medicare, The Commonwealth Fund, November 2003; M. A. Hall, “The Geography of Health Insurance
Regulation,”
Health Affairs , March/April 2000 19(2):173
–84.
THE
COMMONWEALTH
FUND

Medicaid’s Spending on Health Services
Is Lower Than That of Private Coverage
Expenditures ($) on health services for people without health limitations in private coverage and Medicaid
32
1000
800
600
400
200
0
809
735
413
356
Private
400
221
Medicaid
279
198
352
215
Inpatient Office-based doctor
Outpatient/ER Prescription Dental/other
Source: J. Hadley and J. Holahan “Is Health Care Spending Higher Under Medicaid or Private Insurance?”
Inquiry, Winter 2003 40(4):323 –42.
THE
COMMONWEALTH
FUND

Percent Annual Per Enrollee Growth in
Medicare Spending and Private Health Insurance and FEHBP Premiums for Common Benefits
33
Percent
6
4
2
0
12
10
8
9.0
Medicare
10.1
9.6
Private Health Insurance
5.9
8.8
1969–2003 1999–2003
* FEHBP estimates are for 1969
–2002 and 1999–2002 from Levit et al., “Health Spending Rebound
Continues in 2002,” Health Affairs 23 ( January/February 2004):147 –59.
Source: Analysis by Office of the Actuary, Centers for Medicare and Medicaid Services, January 2005.
FEHBP*
10.7
THE
COMMONWEALTH
FUND

Medicare Extra Plan Would Lower
Annual Premiums for Individuals and Families
34
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Average Premium for Employer Coverage
Average Premium for Medicare Extra Plan
$4,479
$3,108
$12,106
$8,424
Single Coverage Family Coverage
Source: C. Schoen, K. Davis, and S. R. Collins, “Building Blocks for Reform: Achieving Universal
Coverage with Private and Public Group Health Insurance,” Health Affairs, May/June 2008 27(3):646 –57;
G. Claxton, “Health Benefits in 2007: Premium Increases Fall to an Eight-Year Low, While Offer Rates and Enrollment Remain Stable,” Health Affairs, September/October 2007 26(5):1407 –16.
THE
COMMONWEALTH
FUND

Medicare Beneficiaries Have Better Access to
Physician Services than Privately Insured People, 2005
35
Privately Insured Percent
100
80
74
67
60
83
Medicare
75
40
20
0
Routine care Illness/injury
Never had a delay to appointment
75 75
89
86
Primary care Specialist
No problem finding physician
THE
COMMONWEALTH
FUND
Source: MedPAC Report to the Congress: Medicare Payment Policy, March 2006, p. 85.

THE
COMMONWEALTH
FUND
36

Increases in Health Insurance Premiums
Compared with Other Indicators, 1988–2006
Percent
20
15
10
5
12.0
18.0
8.5
Health insurance premiums
Workers earnings
Overall inflation
National health expenditures per capita
12.9*
10.9*
13.9
^
11.2*
5.3*
8.2* 9.2*
7.7*
6.1*
37
0
0.8
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007, and Commonwealth Fund analysis of National Health Expenditures data.
* Estimate is statistically different from the previous year shown at p<0.05.
^ Estimate is statistically different from the previous year shown at p<0.1.
Note: Data on premium increases reflect the cost of health insurance premiums for a family of four.
Historical estimates of workers’ earnings have been updated to reflect new industry classifications (NAICS).
THE
COMMONWEALTH
FUND

Cumulative Changes in Annual National Health
Expenditures and Other Indicators, 2000–2007
Percent change
125
Net cost of private health insurance administration
Family private health insurance premiums
100
75
Personal health care
Workers earnings
91%
38
109%
65%
50
25
24%
0
2000 2001 2002 2003 2004 2005 2006* 2007*
Notes: Data on premium increases reflect the cost of health insurance premiums for a family of four/the average premium increase is weighted by covered workers. * 2006 and 2007 private insurance administration and personal health care spending growth rates are projections.
Sources: A. Catlin, C. Cowan, S. Heffler et al., “National Health Spending in 2005: The Slowdown Continues,”
Health Affairs ,
Jan./Feb. 2007 26(1):143 –53; J. A. Poisal, C. Truffer, S. Smith et al., “Health Spending Projections Through 2016: Modest
Changes Obscure Part D’s Impact,” Health Affairs Web Exclusive (Feb. 21, 2007):w242 –w253; Henry J. Kaiser Family Foundation/
Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 2000 –2007 (Washington, D.C.: KFF/HRET).
THE
COMMONWEALTH
FUND

Percentage of National Health Expenditures
Spent on Insurance Administration, 2005
Net costs of health insurance administration as percent of national health expenditures
39
10
8
6.9
7.5
5.6
6
4.8
4.2
4.3
3.9
4 3.3
2.8
2.3
1.9
2
0
Fi nl an d
Ja pa n
A us tr al ia d
K in gd om
U ni te
A us tr ia
C an ad a
N et he rla nd s
Sw itze rla nd
G er a 2004 b 2001
* Includes claims administration, underwriting, marketing, profits, and other administrative costs; based on premiums minus claims expenses for private insurance.
Data: OECD Health Data 2007, Version 10/2007.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008 m an y
Fr an ce
U ni te d
St at es
*
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COMMONWEALTH
FUND

Administrative Hassles Related to
Medical Bills and Insurance Are Serious Problems for More Than a Quarter of Adults
40
Percent reporting serious problems spending time on paperwork or disputes related to medical bills and health insurance in past two years
50
Serious problem
Very serious problem
40
40
30
28
22
26
20
18
18
10
18
10
8
0
Total Fair/Poor Health Excellent/Very
Good/Good Health
Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to
Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund,
September 2006.
THE
COMMONWEALTH
FUND

Concentration of Managed Care Enrollment,
1988–2000
Two-thirds of managed care enrollees are enrolled in the nation’s 10 largest managed care firms.
Percent enrolled in 10 largest firms
80%
65.0
66.5
60% 54.6
56.2
45.8
40%
20%
0%
1988 1991 1994 1997 2000
Note: The largest national managed care firms include Blue Cross and Blue Shield plans, Aetna US Healthcare,
Kaiser Permanente, United Health, and PacifiCare. HMO enrollment includes enrollees in both traditional HMOs and point-of-service plans.
Source: Centers for Medicare and Medicaid Services, CMS Chart Series, Table 1.17.
41
THE
COMMONWEALTH
FUND

Market Share of Three Largest
Health Plans, by State, 2002–2003
42
CA
OR
WA
ID
MT
WY
NV
UT
CO
AZ NM
VT
NH
ME
ND
SD
NE
KS
OK
MN
IA
MO
AR
WI
IL
MS
NY
MI
PA
OH
IN
TN
AL
KY
WV
VA
NC
SC
GA
RI
NJ
CT
MA
DE
MD
DC
TX
LA
FL
81%–100%
66%–80%
50%–65%
Less than 50%
Note: No data are available for Alaska and Hawaii.
Source: J. C. Robinson, “Consolidation and the Transformation of Competition in Health Insurance,”
Health Affairs, November/December 2004 23(5):11 –24.
THE
COMMONWEALTH
FUND

Year
2000
2001
2002
2003
Operating Earnings Margin in Largest
U.S. Health Plans, 2000–2003
WellPoint
(excluding
Anthem)
4.9
Anthem
8.5
6.6
7.1
5.1
6.6
8.1
7.8
UnitedHealth
Group
Aetna CIGNA
5.7
6.7
8.7
10.2
2.3
-0.8
3.2
7.7
3.6
8.0
5.9
8.9
43
Note: Operating earnings = earnings before interest and taxes.
Source: J. C. Robinson, “Consolidation and the Transformation of Competition in Health Insurance,”
Health Affairs, November/December 2004 23(5):11
–24.
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COMMONWEALTH
FUND

Massachusetts Connector Has Improved Choices and Lowered Premiums
44
Typical uninsured 37-year-old, pre- and post-reform
Monthly premium
Rx coverage
Deductible
Pre-reform
$335
None
$5,000
Post-reform
$184
$100 deductible
$2,000
THE
COMMONWEALTH
FUND Source: Jon Kingsdale, Executive Director, Commonwealth Health Connector,
“Design of Connector as an Element of NHI,” July 23, 2008.

FEHBP Enrollment by Type of Plan
Blue Cross/
Blue Shield (PPOs)
58%
2.3 million
Employee Organizations
(generally PPOs)
17%
0.7 million
45
Note: Excludes an estimated 4 million dependents.
Source: Mark Merlis, Personal communication, September 16, 2008.
HMOs
24%
1 million
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COMMONWEALTH
FUND

1.
A standard benefit adequate is defined and available to all
2.
Premiums to the enrollee for a standard plan are affordable regardless of income
3.
Enrollees have and use comparable information
4.
Marketing practices which mislead or discriminate against the sick are prohibited and strictly enforced
5.
Market rules on guaranteed issue and renewal, community rating
6.
Risk-adjustment of premiums
7.
Insurers compete on the basis of value-added they bring in fostering quality and efficiency
8.
Premiums are reasonable and have low administrative overhead
THE
COMMONWEALTH
FUND
46

Action is needed to guarantee affordable coverage. This should include:
• Health insurance premium assistance to low-income and modest-income families who can not afford family premiums that now average over $12,000 even under employer plans.
• Strengthening not weakening employer coverage
• Setting national rules for the operation of individual health insurance markets
• Creating insurance connectors, such as the one in
Massachusetts, that make affordable health insurance policies available to those without access to employer coverage
• Offering a public plan modeled on Medicare to small businesses and individuals would lower premiums by 30 percent and increase the stability of insurance coverage.
• Building on Medicare, Medicaid, and SCHIP to cover older adults, the disabled now in the Medicare two-year waiting period, and low-income adults as well as children. Private insurance markets do not serve these populations well.
THE
COMMONWEALTH
FUND
47