Embargoed Until:
August 18, 2009
12:01 a.m. Eastern Time



Christopher Fleming

Are Americans Willing To Pay For Expanding Health Coverage?

Survey Results Suggest a Resistance to Increased Taxes to Pay for Health Reform;
Studies Also Examine the Ethics of Health Reform and Effects of Modifying the Medicaid Disproportionate-Share Hospital Program

Bethesda, MD -- Many Americans may support the idea of health reform, but only a minority are willing to pay much in higher taxes to accomplish it, according to one of three studies about aspects of the health reform debate published today on the Health Affairs Web site. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w917/DC2

In a January 2009 nationally representative online survey, researchers asked Americans whether they would be willing to pay the higher taxes necessary to cut the number of uninsured Americans by either a half or a quarter, through either Medicaid expansion or government subsidies to help low- and moderate-income people and their employers purchase insurance. Researchers also asked whether survey participants would pay higher taxes to support a government subsidy to help chronically ill people purchase health coverage. Respondents were told that this last option would have only a small impact on the overall number of uninsured people, but that it would help everyone else get insurance by subsidizing the sickest people in the market. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w917

Only the subsidy for chronically ill people received majority support, report Daniel Kessler, a professor in the graduate school of business and Senior Fellow at the Hoover Institution at Stanford University, and David Brady, a professor in the Department of Political Science and deputy director of the Hoover Institution at Stanford. Lower-income respondents were more supportive of the various reform options presented than their higher-income counterparts; Kessler and Brady suggest that this is "not surprising," since lower-income households stand to benefit more from the reforms than higher-income households while paying less in terms of increased taxes.

Reforming the Medicaid Disproportionate-Share Hospital Program. Congress and the Obama administration are considering redirecting federal spending on the Medicaid disproportionate-share hospital (DSH) program to help pay for expanding coverage to uninsured Americans. In a second paper published today on the Health Affairs Web site, Aaron McKethan and coauthors propose a new method of allocating Medicaid DSH payments. Their proposal could save the federal government more than $40 billion over 10 years without exposing hospitals to uncertain or across-the-board spending cuts, while also gradually reducing state variations in Medicaid DSH funding. Specifically, McKethan and his colleagues propose linking federal Medicaid DSH payments to state-level Medicaid enrollment or uninsured populations, or both. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w926

The Medicaid DSH program was enacted in 1981 to support hospitals serving a large number of Medicaid and uninsured patients, but states have used several mechanisms to draw down federal funds without providing the required level of state matching funds. These and other practices have led to rapid growth in federal Medicaid DSH spending and major variations in federal funding across states, as well as a lack of transparency in the Medicaid DSH program. "Given the importance of supporting safety-net hospitals and the need to ensure the integrity of federal spending, we believe that policymakers seeking to achieve federal savings from the Medicaid DSH program should also address these broader issues," say McKethan, a research director at the Engelberg Center for Health Care Reform at the Brookings Institution, and coauthors. The paper also proposes new steps to ensure that the Medicaid DSH program provides more direct aid to the vulnerable populations it was designed to support.

The Ethics of Health Reform. Three key ethical questions should inform the broader debate about health reform, Norman Daniels, Professor of Ethics and Population Health at the Harvard School of Public Health, and coauthors argue in the third study published today by Health Affairs: 1) Why pursue universal coverage? 2) Why is cost containment an ethical issue? 3) What is fairness in financing? http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w909

The authors say that the core ethical values underlying these issues – including expanding opportunity, sharing burdens equally, and respect for persons – limit the means that can be pursued in health reform. The authors assess the ethical implications of several proposals under consideration-- including the use of comparative effectiveness, regulations in the insurance market, and the implementation of a tax surcharge on high income earners. However, they also recognize that compromise is inevitable and that all ethical goals may not be fully realized. "Achieving ethical health reform will require a balance between a steadfast commitment to what is ethically important and pragmatic flexibility about the means of reaching those goals," Daniels and coauthors write.

After the embargo lifts, you can read the article by Kessler and Brady at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w917

You can read the article by McKethan and coauthors at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w926

You can read the article by Daniels and coauthors at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w909


Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.


©2009 Project HOPE–The People-to-People Health Foundation, Inc.