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January 2010 St@teside

New Brief Demonstrates that Impact of Health Reform Would Vary Significantly Among States

While the prospects of health reform may have been dealt a serious blow with the Massachusetts election, at this point in time some compromise between the House and Senate bills remains possible. It is critical to realize that the problems a reform bill would have begun to address still remain. In addition, the cost of failure for our nation’s economy is daunting.

Thus it remains important to show the effect of health reform on people in individual states. Because state coverage levels vary dramatically in the current system, any significant reforms would affect states differently. A new report, How Would States Be Affected by Health Reform?, produced by the Urban Institute, funded in part by State Coverage Initiatives, uses the recent Senate bill as a starting point to examine this variation and provide detailed state and regional data.

Key findings include:

  • A large share of those who would benefit live in Southern and Western states, because of the states’ low levels of Medicaid coverage, relatively large low-income populations, and higher  rates of uninsurance.
  • Overall, about 18.6 million people would become newly eligible for Medicaid under the Senate bill, disproportionately in Southern and Western states; another 22.8 million people are currently eligible for Medicaid/Children’s Health Insurance Program (CHIP) but not enrolled in those programs. Forty seven percent of the nation’s uninsured could potentially be covered through Medicaid once reform is in place.
  • Nine Southern states (West Virginia, South Carolina, Mississippi, Alabama, Louisiana, Kentucky, Arkansas, Oklahoma, and Texas) and three states in the West (New Mexico, Oregon, and Hawaii) would have more than 10 percent of their population newly eligible for Medicaid.
  • The population with incomes between 133 and 400 percent of the federal poverty level (FPL) – the main group potentially eligible for subsidies under the health reform proposals – account for 87 million Americans. Not all would receive subsidies because of restrictions for those with offers of employer-based coverage. 
  • 95.2 million people—or 37 percent of the non-elderly population—would not be eligible for subsidies because their family income exceeds 400 percent of the FPL.A larger share of a state’s population falls into this income group in the Northeast (e.g. over 50 percent in New Jersey, Connecticut, and Massachusetts) than in other regions, particularly the South (e.g., less than 30 percent in West Virginia, South Carolina, Mississippi, and Arkansas).

Read this brief.