Naomi Zewde

This study examines the equity implications of high-deductible health plans within the context of racial and ethnic wealth disparities. Using restricted data from the Medical Expenditure Panel Survey, authors evaluate the net worth (in 2011–2018) and financial assets (in 2011–2016) of families with private insurance and those in high-deductible health plans with and without an associated health savings account.

Findings: Results represent the first estimates of racial and ethnic wealth disparities within these populations. Results show that white households consistently held significantly more wealth than did Black and Hispanic households across income levels. In the lowest income quartile, privately insured white families had more than 350% more in financial assets than their Black counterparts. Low-income Black and Hispanic families with high-deductible health plans but no savings accounts had median financial assets ($2,200 and $2,000, respectively) that were well below the average family coverage deductible.

Study findings highlight the role of systemic racial wealth disparities, beyond that of income, to establish a unique pathway whereby high deductibles can exacerbate health care inequities.
 

“Public option” health plans, particularly as enacted in Washington State, have had difficulty meeting their goals of improving affordability for patients and reducing overall health care costs. Some states have instead created a Basic Health Program (BHP), an alternative form of coverage authorized by the Affordable Care Act that replaces marketplace coverage for residents with low incomes who are eligible for premium subsidies. This policy brief analyzes the evolution of Washington’s public option and policy changes made in other states in response to initial rollout challenges and compares these with the policy goals and outcomes of BHPs.

Findings: Washington’s public option initially struggled with provider network participation and price competitiveness. Without sufficient network participation and robust enrollment, public options have few means to improve affordability or lower health care costs. BHPs are unlikely to face the same challenges. They contract with safety-net providers at Medicaid-like rates to cover all households with incomes between 138 percent and 200 percent of the federal poverty level who would otherwise be eligible for marketplace subsidies. A BHP can provide robust affordability with minimal out-of-pocket spending at a low cost to states and the federal government.

Summary: Authors propose a new, nationwide program of monthly cash payments that would automatically begin when economic indicators signal a recession and continue until the national unemployment rate begins to decrease. Building upon the successful pandemic direct cash payments which dramatically decreased poverty, this policy would provide automatic, monthly payments to working-class families at the first sign of recession, staving off unemployment and stabilizing families and the American economy. The report outlines key design features of a timely, effective, and anti-racist automatic cash payments policy and provides estimates of its benefits for families by race and income.

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• Report: Direct Cash Payments in the Next Recession

Summary: Medicaid is the largest single provider of health care coverage in the United States, covering 1 in every 5 Americans. But over the past 25 years, this public health care program has been largely privatized. Today, 70% of Medicaid beneficiaries — approximately 54 million Americans — receive their Medicaid coverage from a private insurance company. The literature shows some reductions to medical spending, which is a primary supporting argument of the move, but these reductions tend to be driven either by reductions to providers’ fees or by reductions in medical utilization due to added administrative requirements on the authorization of care. Both avenues can hinder beneficiaries’ access to care. Moreover, these savings have been found to be absorbed by the private insurers themselves, yielding little to no evidence of a net fiscal benefit to the state. 

Findings: Authors argue that private insurers’ profits derived from the administration of Medicaid represent a transfer of wealth from the taxpayer, beneficiary, and safety net medical provider to the administrators and shareholders of private insurance. After examining this evidence, authors then review the modern political history of how this financing approach came to dominate Medicaid in the 1990s, and two state case studies from more recent history — one that recently embraced private insurance and another that has developed an effective public alternative.

 

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• External Publication: Reconsidering Medicaid Privatization: Weighing the Evidence and the Alternatives