Political and Economic Conditions Likely to Impact 2009 Activity

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In 2008, state activities to provide coverage to the uninsured continued to make headlines, most notably the Massachusetts efforts to implement a near-universal health coverage program. Massachusetts was able to decrease by half the state’s number of uninsured in 2007, resulting in 300,000 fewer uninsured residents. In fact, the Massachusetts efforts to implement universal coverage accounted for more than 20 percent of the decline in the nation’s number of uninsured last year.[i]

Almost half of states included coverage expansions for the uninsured in their proposed FY 2009 budgets, but those plans now appear to be in jeopardy. States may scale back these efforts or abandon them entirely as they struggle to close budget gaps and maintain current levels of coverage.[ii]  Furthermore, current economic conditions will increase pressure on states to contain costs. For many states, controlling costs may prove more difficult than expanding access.
Current economic conditions raise the specter of a recession more severe than the one in 2001, which had a long-lasting impact on states. Following that recession, unemployment hit a high of 6.3 percent, a figure this recession surpassed in the fall of 2008. Without the $20 billion in temporary federal relief provided to states in 2003, the impact of the 2001 recession would have been even harsher. Even now, forecasters suggest that a similar federal intervention may be needed—sooner rather than later.[iii]
Health care reform was a major issue in the national election. President Obama campaigned on the promise of a universal coverage plan that builds on the current system of private and public insurance. Some features of his proposed plan resemble the Massachusetts comprehensive reform plan. He has proposed that all employers, except small employers, either offer health insurance to their workers or contribute to the cost of coverage. His campaign proposal called for a National Health Insurance Exchange that would allow individuals without coverage to purchase a plan similar to that offered to federal workers. President Obama’s proposal also called for expanded eligibility under Medicaid and SCHIP.[iv]
To what extent the dramatically altered economic outlook will affect the President’s health care reform plans remains to be seen. He has signaled his intent to move quickly to repair the economy, starting with an economic stimulus package. At the same time, he has indicated that health care reform tops his agenda alongside clean energy, education, and tax relief for the middle class. Ambitious health care reform proposals may wait until after Congress addresses a stimulus package, although increased funding for SCHIP and other smaller agenda items with bipartisan support may see early action.[v]


Continue reading on: Uninsured in America: The Facts


[i] Holahan, J. and A. Cook. “The Decline in the Uninsured in 2007: Why Did It Happen and Can It Last?” Kaiser Commission on Medicaid and the Uninsured, October 2008.
[ii] The Fiscal Survey of States, National Governors Association, National Association of State Budget Officers, June 2008.
[iii] McNichol, E. and I.J. Lav. "State Budget Troubles Worsen," Center on Budget and Policy Priorities, October 24, 2008. Updated January 14, 2009.
[iv] Collins, S.R. et al. “The 2008 Presidential Candidates’ Health Reform Proposals: Choices for America,” The Commonwealth Fund, Vol. 100, October 2, 2008.
[v] Kaiser Daily Health Policy Report, November 10, 2008.