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Interfacing national health insurance and income maintenance: why health and welfare reform go together.

The current debate on national health insurance has not given sufficient attention to the impact of various proposals upon income maintenance programs. Health and welfare benefits are difficult to coordinate and frequently work at cross purposes. Health care benefits are one of several in-kind forms of income that can affect the economic behavior and well-being of welfare recipients. As an in-kind form of income, subsidized health insurance for low income persons can undermine the objectives of public assistance, particularly the willingness to work, by making some individuals worse off when income rises. Five national health insurance proposals are analyzed to determine how each will interface with cash transfer programs. Most of these proposals perpetuate many of the benefit coordination problems that now exist with the Medicaid program. The article concludes by delineating some of the difficult policy decisions that must be made if health and welfare reforms are to be meaningful.

Aid to Families with Dependent Children↗

The relationship between retrospective health insurance claims and a health risk appraisal-generated measure of health status.

This research examined the relationship between a measure of health status (defined as the health index--the difference between actual and appraised ages) derived from a health risk appraisal and retrospective health insurance claims taken from one cooperating work organization. A model was defined consisting of 3-year retrospective medical claims as the criterion and age and the health index as predictors. Using a cube-root transformation of medical claims, a significant inverse relationship for age and the health index was identified for men. No relationships were found for women. It was concluded that, for men when age is held constant, a negative relationship exists between retrospective medical claims and a health risk appraisal-generated health status indicator, the health index.

Adult↗

Employer-based health insurance.

Employer-based health insurance (insurance that is purchased by employers for their employees and financed through employer or joint employer-employee contributions) is currently subsidized in part by the federal government through tax exclusions for employer contributions to employee health insurance plans. This subsidization costs the federal government close to 10 billion dollars a year in lost revenues. Many proposed national health insurance plans assign a key role to employer-based health insurance as a vehicle for financing health care. Federal subsidization of employer-based health insurance and plans that assign employers a key role in the administration of a national health insurance plan both assume that private industry acts to realize federal health policy goals-- particularly cost containment--in administering health insurance plans. Little is known, however, about how employers go about selecting the plans they offer their employees or about the incentives and disincentives regarding cost of care than are created by employer-based health insurance. Existing evidence suggests that rather than helping to contain health care costs, employer-based health insurance may be partly responsible for their present escalation. In addition, employer-based health insurance may not be the most equitable way to implement a national health insurance plan.

Blue Cross Blue Shield Insurance Plans↗