NCPA - National Center for Policy Analysis

Beware Siren Calls Of Universal Health Insurance

October 22, 1999

States that pass laws to increase access to health insurance for the uninsured too often only make matters worse, according to many health-care analysts.

  • A study last year by the Galen Institute revealed that 16 states had passed aggressive laws between 1990 and 1994 designed to increase access to health insurance for their uninsured populations.
  • But by 1996, those states had an average annual growth in the ranks of the uninsured eight times that of the other 34.

Tennessee led the way in adopting a radical reform -- known as TennCare. Here's how that controversial policy backfired:

  • The 1993 legislation was supposed to cover 800,000 poor people on state Medicaid, plus 400,000 uninsured and uninsurable -- for less money than Tennessee was spending on Medicaid.
  • It would do so, officials promised, by putting them all under managed care.
  • But costs skyrocketed because of an explosion of the number of uninsured people included on TennCare's rolls.
  • TennCare says it provides insurance for some 114,000 uninsurable people -- but high-risk pools in the other 27 states total only 100,000 uninsurables combined.

That number includes California's high-risk pool, which covers 21,400 people. Experts are asking how it can be that Tennessee -- which has one-sixth of the population of California -- has five times as many uninsurables.

Because the program now consumes one-quarter of the state's budget, lawmakers are seriously considering adopting a state income tax for the first time -- just to pay the medical bills.

Source: Editorial, "California Dreaming," Investor's Business Daily, October 22, 1999.


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