No employer mandate? 21 million uninsured - Employee Benefit Research Institute report on healthcare reform proposals - News & Trends

Business & Health, April, 1994

Health care reform that does not mandate employers to pay for coverage or employees to have it, and only offers tax subsidies to the uninsured, would leave about 21 million persons without health insurance, according to a report released last month by the Employee Benefit Research Institute in Washington.

The reason: Even with the tax subsidies, most of the 38.5 million uninsured would not be able to afford coverage or would make an "economically rational decision" not to purchase it, says William Custer, EBRI's chief health insurance analyst.

The institute assumed a sliding scale tax credit for health insurance costs for a those with incomes under 200% of poverty and full tax deductibility for those over 200% of poverty.

The institute also calculated that:

* An employer mandate would leave about 5.8 million Americans still uninsured. "To really reach everyone, you would have to overlay an individual mandate on the employer mandate," Custer says.

* The "pure" managed competition approach (without any mandates) proposed by Rep. Jim Cooper [D-Tenn.] would fail to "significantly decrease the numbers of Americans without health insurance coverage." This would be the case because Cooper's subsidies are not rich enough to help many low-income citizens purchase full coverage in community-rated purchasing pools.

* If firms with only 100 employees or fewer are allowed to participate in purchasing pools, 82 million Americans, or 32.7%, would be in such pools that exclude public-sector employees and the Medicaid population. If both those latter populations are enfolded into the pools, 128 million Americans, or 5 1 %, would get health insurance through the purchasing pools.

The report, "Health Reform: Examining the Alternatives," can be obtained from EBRI by calling 202/659-0670.