Surveying the Landscape

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Finding ways to expand coverage to the uninsured continued to dominate state policy agendas in 2008. The year saw a multitude of state efforts aimed at developing, legislating, and implementing reforms. While forecasters projected that 2009 would bring renewed energy to many states’ coverage efforts, the nation’s serious economic ills are causing an about-face such that state officials are now concerned whether progress by states can continue to be made.[i] Declining economic conditions have considerably darkened the outlook for 2009 and will perhaps thwart many states’ reform efforts.

During the current economic downturn, ordinary citizens will feel the crunch of high health care costs—for premiums, cost sharing, and the out-of-pocket cost of care. Health care reform consistently polled as one of the top three issues for voters in 2008, and, if the issue can be linked to economic worries, its relevance could increase even more.[ii] As states face tightly constrained budgets, they may need to respond to low- and middle-income voters who find themselves swamped by health care bills and worried about loss of coverage.
The national election attested to voters’ growing concerns with the economy and especially about the cost of health care. Wage growth has failed to keep pace with increases in out-of-pocket health care costs.[iii] In spring 2008, a Kaiser Health tracking poll found that more people reported difficulty in paying for health care than paying for food or housing. As new president and Congress respond to calls for relief by enacting a stimulus package, the poll data provide an important reminder that many Americans are seeking relief from a range of economic burdens.[iv] 
This section uses various data sources to explore the current landscape. Despite some variation in data across sources, the overall trend is consistent. Moreover, given that data sources typically lag current conditions by a year, the numbers (particularly the national rates of uninsurance) paint a rosier picture than the reality faced by many states. This section looks behind the numbers to project the potential impact of the nation’s altered economy on states—their budgets, public programs, and efforts to expand coverage to the uninsured.

Uninsured Decline in 2007, State Fiscal Conditions Darken, Medicaid Enrollment, Spending Set to Swell, Employer Coverage Continues Its Slow Erosion, Political and Economic Conditions Likely to Impact 2009 Activity

[i] Reichard, J. “Omens of Economic Ill: Medicaid Spending, Enrollment Turn Upward,” Washington Health Policy Week in Review, The Commonwealth Fund, October 6, 2008.
[ii] Altman, D. “Health In the Economy,” Kaiser Family Foundation, May 2008.
[iii] “Employer Health Insurance Costs and Worker Compensation,” Snapshots: Health Care Costs, March 2008.
[iv] Altman, D. op. cit.