“Cover All Pennsylvanians” Covers Very Few

Governor Rendell’s proposed “Cover All Pennsylvanians” claims to provide health insurance for an Administration-estimated 800,000 currently uninsured Pennsylvania adults at a cost of $1 billion dollars in just four years. However, “Cover All Pennsylvanians” falls short of reducing the number of uninsured, if at all.

According to projected estimates by the Commonwealth Foundation, even if “Cover All Pennsylvanians” (CAP) is fully implemented as proposed by Governor Rendell, the change in the number of uninsured Pennsylvanians in 2007 will range from between an increase of 70,000 and a growth of 170,000 by 2012.

(Click for full chart)

The chart above shows the estimated number of participants and costs of CAP, the anticipated increase in uninsured, and the net effect of CAP (both with and without “crowd out”). The conclusion is that CAP will not significantly reduce the number of uninsured in Pennsylvania from the estimated 800,000 today.

Explanation:

1. Cover All Pennsylvanians (CAP): Despite the dramatic increase in new spending of $1 billion in 2012, CAP does not approach covering 800,000 Pennsylvanians. In 2007-08, Governor Rendell estimates 97,000 new CAP enrollees, growing to about 198,000 in 2011-12 (excluding new Medicaid participants). This represents less than half those currently uninsured.
2. Increases in Uninsured: From 1999-2006, U.S. Census data found that the number of uninsured adults in Pennsylvania grew by an average of 6% annually (this in spite of, or because of, increases in those on government insurance programs). At this rate, the number of uninsured will climb by 270,000 by 2011-12.
3. Crowd Out: Many of those covered under CAP will be either (a) those currently insured dropping private insurance to go onto CAP, (b) those losing private insurance for other reasons and joining CAP, or (c) those not currently counted in insurance data. Several studies of “crowd out” estimate that 40% to 60% of enrollees in new government health care programs were previously covered by private insurance.

In contrast, reforms that would lower the cost of health care would reduce not only the number of uninsured, but would reverse the trend of individuals losing or dropping private coverage. These solutions include allowing families to purchase lower cost insurance from out of state providers, offering tax credits for Health Savings Accounts, reducing the number of mandates and allowing individuals to purchase basic insurance, and making health care costs more transparent.

These market-based reforms are more affordable for taxpayers and would do more to reduce the uninsured than expanding government programs. By reducing the costs of health care, such reforms would allow the uninsured to afford private insurance and would benefit the 11 million currently insured Pennsylvanians.

Click here for a printable version of “Cover All Pennsylvanians” Covers Very Few.

For additional information on Health Care and other issues, go to www.CommonwealthFoundation.org, or call 717.671.1901.

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The Commonwealth Foundation is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.