Impact of Gaps in Health Coverage On Income Security: Hearing

IMPACT OF GAPS IN HEALTH COVERAGE
ON INCOME SECURITY
HEARING
BEFORE THE
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
OF THE
COMMITTEE ON WAYS AND MEANS

U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
NOVEMBER 14, 2007
Serial No. 11065

Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS

CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California
JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan
WALLY HERGER, California
JIM MCDERMOTT, Washington
DAVE CAMP, Michigan
JOHN LEWIS, Georgia
JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York
PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee
JERRY WELLER, Illinois
XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri
LLOYD DOGGETT, Texas
RON LEWIS, Kentucky
EARL POMEROY, North Dakota
KEVIN BRADY, Texas
THOMAS M. REYNOLDS, New York
STEPHANIE TUBBS JONES, Ohio
PAUL RYAN, Wisconsin
MIKE THOMPSON, California
ERIC CANTOR, Virginia
JOHN B. LARSON, Connecticut
JOHN LINDER, Georgia
RAHM EMANUEL, Illinois
DEVIN NUNES, California
EARL BLUMENAUER, Oregon
PAT TIBERI, Ohio
RON KIND, Wisconsin
JON PORTER, Nevada
BILL PASCRELL JR., New Jersey
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
JANICE MAYS, Chief Counsel and Staff Director
BRETT LOPER, Minority Staff Director
SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT

JIM MCDERMOTT, Washington, Chairman
FORTNEY PETE STARK, California
ARTUR DAVIS, Alabama
JOHN LEWIS, Georgia
MICHAEL R. MCNULTY, New York
SHELLEY BERKLEY, Nevada
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
JERRY WELLER, Illinois

WALLY HERGER, California
DAVE CAMP, Michigan
JON PORTER, Nevada
PHIL ENGLISH, Pennsylvania
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records
of the Committee on Ways and Means are also published in electronic form. The printed
hearing record remains the official version. Because electronic submissions are used to
prepare both printed and electronic versions of the hearing record, the process of converting
between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process
is further refined.
ii
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CONTENTS
Page
Advisory of November 7, 2007, announcing the hearing ......................................
WITNESSES
Sherena Johnson, former foster youth from Morrow, Georgia ............................
Sara R. Collins, Ph.D., Assistant Vice President, Program on the Future
of Health Insurance, The Commonwealth Fund, New York, NY .....................
Ron Pollack, Founding Executive Director, Families USA, Washington, DC .....
Bruce Lesley, President, First Focus, Alexandria, VA .........................................
Brian J. Gottlob, Senior Fellow, Milton and Rose D. Friedman Foundation,
Indianapolis, IN ...................................................................................................
60
79
114
63
158
SUBMISSIONS FOR THE RECORD
Business Coalition for Benefits Tax Equity, statement .......................................

Child Welfare League of America, Arlington, Virginia, statement .....................
Human Rights Campaign, statement ....................................................................
National Association of Disability Examiners, statement ....................................
Zero to Three, Matthew Melmed, statement .........................................................
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IMPACT OF GAPS IN HEALTH COVERAGE

ON INCOME SECURITY
WEDNESDAY, NOVEMBER 14, 2007
U.S. HOUSE OF REPRESENTATIVES,

COMMITTEE ON WAYS AND MEANS,
SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m., in
room B318, Rayburn House Office Building, Hon. Jim McDermott
(Chairman of the Subcommittee), presiding.
[The advisory announcing the hearing follows:]
(1)
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ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
FOR IMMEDIATE RELEASE
November 07, 2007
CONTACT: (202) 2251025
McDermott Announces Hearing on Impact of

Gaps in Health Coverage on Income Security
Congressman Jim McDermott (DWA), Chairman of the Subcommittee on Income
Security and Family Support, today announced a hearing on the impact of gaps in
health coverage on income security. The hearing will take place on Wednesday,
November 14, 2007, at 10:00 a.m. in room B318 Rayburn House Office
Building.
In view of the limited time available to hear witnesses, oral testimony at this
hearing will be from invited witnesses only. However, any individual or organization
not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.
BACKGROUND:
The Census Bureau has found that, in 2006 (the most recent year in which data
is available) roughly 47 million people did not have health insurance in this nation,
an increase of nearly 2.2 million over the previous year. After falling modestly in
the late 1990s, the number of people without health insurance has increased by approximately 8.6 million since 2000.
Research suggests that the combination of declining share of employees being covered by employers and rising health costs have placed more moderate- and middleincome families at risk of becoming uninsured. Between 2000 and 2004, the share
of non-elderly working-age adults covered by employer-sponsored insurance declined
by five percentage points, from 66 percent to 61 percent, according to the Kaiser
Family Foundation. While government programs, such as Medicaid, provide health
coverage to certain low-income individuals, many other low- and middle-income individuals and families do not have a health safety-net available to them. As a result,
many are completely without health insurance or experience gaps in coverage.
Studies have found that those who are uninsured face difficulty managing chronic
conditions, are much less likely to get preventative care, and experience an overall
decline in their health. The uninsured are three times more likely than those with
coverage to cut back on basic needs to pay for care and, among low-income uninsured parents, are more likely to report a loss of time at work because of an illness.
The absence of health insurance and gaps in coverage undermine the ability of these
families to increase their overall economic well-being.
In announcing the hearing, Chairman McDermott stated, We know its increasingly difficult for the middle class to obtain quality, affordable health
care. The Subcommittee will explore the growing challenges facing the
American people, especially the unemployed, the disabled, and vulnerable
youth. There is much we can learn by examining the leadership role the
federal government currently plays in the provision of health care to find
ways to fill the widening gaps in our health care system.
FOCUS OF THE HEARING:

The hearing will focus on how gaps in health care coverage affect the income security of Americans.
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3
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee
website and complete the informational forms. From the Committee homepage,
http://waysandmeans.house.gov, select 110th Congress from the menu entitled,
Hearing Archives (http://waysandmeans.house.gov/Hearings.asp?congress=18). Select the hearing for which you would like to submit, and click on the link entitled,
Click here to provide a submission for the record. Once you have followed the online instructions, completing all informational forms and clicking submit on the
final page, an email will be sent to the address which you supply confirming your
interest in providing a submission for the record. You MUST REPLY to the email
and ATTACH your submission as a Word or WordPerfect document, in compliance
with the formatting requirements listed below, by close of business November 28,
2007. Finally, please note that due to the change in House mail policy, the U.S.
Capitol Police will refuse sealed-package deliveries to all House Office Buildings.
For questions, or if you encounter technical problems, please call (202) 2251721.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee.
The Committee will not alter the content of your submission, but we reserve the right to format
it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response
to a request for written comments must conform to the guidelines listed below. Any submission
or supplementary item not in compliance with these guidelines will not be printed, but will be
maintained in the Committee files for review and use by the Committee.
1. All submissions and supplementary materials must be provided in Word or WordPerfect
format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official
hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing.
Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material
not meeting these specifications will be maintained in the Committee files for review and use
by the Committee.
3. All submissions must include a list of all clients, persons, and/or organizations on whose
behalf the witness appears. A supplemental sheet must accompany each submission listing the
name, company, address, telephone and fax numbers of each witness.
Note: All Committee advisories and news releases are available on the World
Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons with disabilities.
If you are in need of special accommodations, please call 2022251721 or 202226
3411 TTD/TTY in advance of the event (four business days notice is requested).
Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.
Chairman MCDERMOTT. The Subcommittee will come to order.

You want me to put my microphone on?
Mr. Herger is here and we will begin. Unfortunately, family
problems for Mr. Weller have kept him away today, so we will
start. The number of Americans that go without health insurance
is growing. We all know it. I am not giving you any big news here.
It is now up to 47 million who are without health insurance. Presumably, these numbers are by the Census Bureau, this reflects
the people who are uninsured for an entire year. It comes as no
surprise that medical bills are also the leading cause of bankruptcy.
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People, when they get a big medical bill that tips them over very
often in this society, because everybody is so stretched out financially anyway. Were involved because the gaps in the provision of
affordable health care impact populations that concern this Subcommittee. I am really not looking at the whole thing, but I am
looking at this thing because we have some very specific groups
that are affected. I will talk both about them and about the larger
issue.
The disabled, the unemployed, the low and moderate-income
families, and youth who are aging out of foster care are groups that
are affected by this lack of health insurance.
A recent CBO report found that after becoming unemployed,
nearly 40 percent of workers lacked health insurance. Applicants
for SSI could wait as long as two and a half years for a final determination by the Social Security Administration that they qualify
for SSI. What happens to them in that two and a half years?
What do the disabled people do to obtain health care during this
period, how did they pay for it, and what impact does any delay
have on their mental status, and their health status and long-term
medical costs? Forty percent of uninsured Americans with medical
burdens are unable to pay for necessities such as food, heat and
rent.
How does the living standard of these families with these challenges compare with families who receive TANF, food stamps or
housing assistance? When a foster child becomes 18, he or she loses
their entitlement to Medicaid.
How does an 18-year-old obtain health insurance in todays economy, and what impact does that have on their long-term health
status? This spring, this Subcommittee learned about the disproportionate number of homeless youth that were coming from the
child welfare system. We then passed a resolution declaring November as National Homeless Youth Awareness month. But we
really need to do more to raise consciousness in this society.
Why should we make an 18-year-old choose between housing,
continuing education and health care? It really is an unfortunate
set of questions to be asking. The problems confronting our health
care system reach beyond this Subcommittees jurisdiction. There
is a slide which shows something I think we need to talk about.
Why does the Federal Government impose an income tax on
health benefits received by a domestic partner, is a question for the
full Committee. Another one concerns globalization. We have a system where almost 65 percent of non-elderly individuals obtained
health insurance through employment, but this Subcommittee
learned in a March hearing that globalization means that workers
should expect to change jobs and careers more often than in the
past. Without health care reform, we can expect globalization to
translate into larger gaps in health care and more vulnerable families.
As we consider ways to fill the gaps of our current health care
system, it is important to understand what we have today and the
role the government already plays in the purchase of health care.
We have heard recently around the debates on SCHIP, the term
if we do any more for children in this country, we will somehow
have socialized medicine, as though that were some kind of shib-
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boleth that we couldnt deal with. Now, I put that chart up for you.
The government already spends50 percent of the dollars on
health care come from the Federal Government, when you talk
about spending and the tax breaks involved.
This vital role may impact the price and quality of health care
purchased privately. Most private insurance plans operate off of
what the government pays, some relationship to what is paid by
Medicare or Medicaid.
I thank todays witnesses for being with us and sharing their
knowledge. They bring a commitment to this issue that is very important in the coming months. I know some of you from the past,
and I know where you have been and what you have been doing.
Some of you are new, but nevertheless you all have a long-term
stake in what happens in this issue. I expect this issue will be the
number one domestic issue in the 2009 session of the U.S. Congress. I think we are going to have to do something about it.
Whether we get it done or not, and how we get it done remains to
be seen. I will now yield to Mr. Herger, who will make an opening
statement.
Mr. HERGER. Thank you Mr. Chairman. Unfortunately, ranking
member Jerry Weller is not able to attend the hearing today. On
his behalf, I would like to thank all the witnesses for being here
today, and I ask that Mr. Wellers opening statement be inserted
in the record. The goal of ensuring that all Americans have adequate health care is one that we all share. Just how we reach that
goal has been an issue in hearings before many Committees for
quite some time here in Congress.
Todays hearing will add to that list. Mr. Wellers statement explores how dropping out of high school leads to low wages, or unemployment for too many young adults. For purposes of todays
hearing, dropping out of high school leads to far higher chances
that adults, and their families, will lack health insurance coverage.
That is despite the fact that many are covered under Medicaid, and
other public programs.
I certainly agree with Mr. Weller that this is one of many reasons why this Congress, and the nation, should be doing everything
we can to improve the chances that young people finish at least
high school. That is the only way they can obtain the skills needed
to hold down good jobs that either offer workers health coverage,
or that pay enough for them to purchase coverage on their own.
I look forward to the hearing, and the witness testimony today,
and I yield back the balance of my time.
[The prepared statements of Mr. Herger and Mr. Weller follow:]
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Chairman MCDERMOTT. Thank you very much. We have before

us today
Mr. CAMP. Mr. Chairman, if I could just for the record.
Chairman MCDERMOTT. Sure.
Mr. CAMP. I wanted to put in that this hearing covers issues
normally not under the jurisdiction of this Committee. I am ranking member of the Health Subcommittee, and there are a couple of
non-partisan reports that I wanted to put in the record with unanimous consent.
One is the Congressional Budget Office report called, The LongTerm Outlook for Health Care Spending Sources of Growth and
Projected Federal Spending on Medicare and Medicaid. The second
one is one of a series of reports from the Congressional Research
Service on health insurance coverage, on health insurance coverage
of children and spending by employers on health insurance.
With unanimous consent, if these reports could become part of
the hearing record.
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[The information follows:]
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[The CRS reports follow:]
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Chairman MCDERMOTT. I appreciate your comments. The fact
is that I talked with Pete Stark about this and when you look at
the health care issue, one of the problems we have in dealing with
it as a Congress, is it is fractured into a thousand pieces. I think
part of our effort in Congress, to deal with this ultimately, is we
are going to have to bring some of these pieces together.
The Subcommittee on Social Security has part of this issue. The
health Subcommittee has part of this issue. We have part of this
issue. The Commerce and Energy Committee has part of the issue.
So, it really is very hard to talk about it. I appreciate your being
here, and being on both Subcommittees will help us in the long
run. Our witnesses today, the first witness is Sherena Johnson.
She is from Georgia. Mr. Lewis, would you like to introduce her?
Mr. LEWIS. Thank you very much, Mr. Chairman and good
morning. Mr. Chairman, thank you so much for holding this important hearing, I am so proud to introduce an extraordinary young
woman from the State of Georgia, who is testifying before our Subcommittee today. Ms. Sherena Johnson lives in Morrow, Georgia,
and has an associates degree in social work.
She is currently attending Clayton State University, majoring in
psychology and human services, and is an intern at the State Department on Human Resources in downtown Atlanta. She plans to
become a licensed clinical social worker, and to work with organizations that help young people transition from foster care after graduation. She is a member of the Georgia Empowerment Group, a
statewide youth leadership and advocacy group, for current and
former foster youth. She was a member of the 2006 Jim Casey
Youth Opportunities Initiative Leadership Institute Class.
Most recently, Sherena completed a 12-week internship with the
National All Star Foster Club, making her the youngest person
from Georgia to earn this honor. She is highly sought after as a
youth speaker, and is an active member of the Metropolitan Atlanta Youth Opportunity Initiative. Ms. Johnson has bravely come
before us today to share her difficult story, and I commend her for
being here as a voice for other children in foster care, and those
aging out of foster care. Ms. Johnson, thank you for being here, and
we all look forward to your testimony, welcome.
Chairman MCDERMOTT. We welcome you to the Subcommittee,
and I would say to you and to all the members of the panel, we
have received your testimony and it will all be entered in the
record in its completeness. So, we would like you to try and stay
within 5 minutes of the presentation that you make here today.
So, Ms. Johnson.
STATEMENT OF SHERENA JOHNSON,

FORMER FOSTER YOUTH FROM MORROW, GEORGIA
Ms. JOHNSON. Good morning Chairman McDermott, ranking

member Weller and members of your Subcommittee, I would first
like to thank you for giving me this opportunity to appear before
you on behalf of my brothers and sisters that are currently aging
out of the foster care system today.
Mr. Lewis just gave a great introduction of myself, and I would
like to start off by saying that a lot of people would consider my
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story to be a success story, given my background and where I came
from.
To add on to what Mr. Lewis said, my mother deceased when I
was 5 months old, and she was 21 at the time. I went on to live
with my grandmother, and I was taken away from her and put in
foster care, because she didnt have the necessary resources to care
for me at the time. I spent about 8 years in foster care, only to age
out at age 18, with limited to no resources. The most significant resource that I lost was my health care insurance. I didnt know at
the time, how important it would be to lose health care, because
I was currently an athlete and hardly ever sick. So, I didnt know
the impact that it would make on my life.
In my sophomore year of college, I was diagnosed with an illness
that could cause infertility if it continued to be undetected or fixed.
As a young woman, it is very significant to be able to get yearly
exams. Because I didnt have health care insurance, I couldnt go
to the doctor regularly to receive those exams.
So, the condition continued and I didnt really have anybody to
go to, or talk about it to, and I just got really depressed. As the
illness began to grow, I began to be very nauseated, depressed. I
would get sick to my stomach. It got to the point where I didnt
even want to get out of bed at times.
Because I didnt go to class, because I was depressed and really
sick, I ended up getting suspended because my GPA dropped. As
you can imagine, it just started this ripple effect. When my GPA
dropped, I was suspended from school and I had to sit out for two
semesters. I was originally supposed to graduate this semester, but
because I was suspended back in last spring, I would be graduating
in spring 2008.
It was hard for me, because living in the Atlanta Metro area, it
is a very busy area, and the health clinics there were difficult to
treat me at the time, because they would have a limited number
that they could see, due to them not having the appropriate number of staff.
So, I would get up at 6 a.m. in the morning to try to beat the
line and get there at 8. When I would get there, because they didnt
have enough nurses on staff, they would tell me that they could
only see the first five people with my condition.
Of course, with the line being so long even though I arrived there
at 6:15 a.m., I was not one of the five people. I had to drive an hour
and a half outside of the area that I was residing to finally seek
medical attention at a health clinic that I attended when I was getting my associates degree. Even though I went to that health clinic, because it is a health clinic, there is only certain procedures
that they can do. So, they would still continue to send me on to
other places for lab work.
As you can see, this just was an ongoing condition. It was a lot
for me to have to deal with, aging out of foster care at 18 with no
parents, nowhere to live. I was struggling during school, because
staying at the dormitories you had to leave around the Thanksgiving and Christmas holidays. So, I was already dealing with
enough, and on top of that to not be able to get my medical condition treated, I sort of lost hope.
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To be honest, I stopped going to class, because the medical condition was so bad that I thought it was going to end up being cancerous. I just really thought I wasnt going to be able to make it
through the semester anyway. So, I though why continue to go to
class.
To this day I still do not have health care, and I am 22 years
old. With me being 22, I am not standing here for myself, because
despite the odds I was still able to make it. But there is a lot of
youth in foster care right now today that are aging out of foster
care with no insurance. I thought this was just an issue in the
State of Georgia, but this is a national issue for youth and foster
care.
For one thing, we are considered to suffer post-traumatic stress
disorder at twice the rate of U.S. war veterans. If you think about
it, they are getting shot at and everything else, and if you dont
have medical insurance, you cant even go see a counselor or a licensed psychologist to get those problems taken care of.
My recommendation to this Committee would be for Congress to
mandate States to exercise the Medicaid option of the Chafee Act,
to allow you to have medical coverage until age 21 as we transition
from foster care. The State of Georgia was my parent for many
years. Consequently, it would help youth transition from foster care
so much if my parents, the State of Georgia, stepped up to the
plate and assumed its parental role.
Medicaid until age 21 will be the first step to helping former
youth and foster care, young people like me become healthy, selfsufficient, productive individuals as we receive help we need for
physical and emotional problems. Still, a more comprehensive approach is also needed to address the health care needs of young
adults who remain uninsured.
So, with that being said, I would just like to thank you guys once
again, for allowing me to be able to share my story with you.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Sherena Johnson,

Former Foster Youth From Morrow, Georgia
Chairman McDermott, Ranking Member Weller, and members of this Subcommittee, thank you for allowing me to appear before you today on behalf of my
brothers and sisters in foster care who need your help to make health care available
for youth in foster care so they can make a successful transition to adulthood.
My name is Sherena Johnson. I am 22 years old and live in Morrow, Georgia, a
suburb of Atlanta. I am a senior at Clayton State University, majoring in Psychology and Human Services. Ive been very involved with the Metropolitan Atlanta
Youth Opportunities Initiative, which is a site of the Jim Casey Youth Opportunities
Initiative, a national foundation that helps States and communities assist youth in
foster care make successful transitions to adulthood. Ive served on the youth advisory board, and Im an Opportunity Passport? participant. After my mother died and
my grandmother no longer could care for me, I spent eight years in the Georgia Foster Care system only to be emancipated at age 18 with limited to no resources. The
most significant resource that I lost was Medicaid.
When I left foster care, I did not realize the impact that not having health insurance would have on my life. During my sophomore year of college, I was diagnosed
with a serious medical condition that left untreated could have caused infertility.
As a young woman, it is critical that you receive yearly physical exams. In my case,
because I had no medical insurance coverage, I was not able to afford the cost of
yearly exams. During the time that my condition went undetected, I experienced
nausea, pain in my stomach, and high fevers often due to my undetected medical
condition. I became so depressed because of my condition and not knowing who to
ask for help, I stopped going to college regularly. I was not focused in school any-
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more because I was very much preoccupied with my medical condition. I imagined
that the condition would ultimately be diagnosed as cancerous or worse. If this was
the case, I concluded (in my fearful state of mind) that I might not be around at
the end of the semester.
As expected, my negative state of mind started a ripple effect. My GPA dropped
below a 2.0. I was suspended for a semester and placed on academic probation. It
was not until I finally broke down and told some very special people at the Georgia
Department of Human Resources (where I worked as an intern at the time) that
I finally had the courage to divulge exactly what was going on. The journey to find
help was difficult. Some of the members of this team of dedicated social workers
drove me across numerous different counties in an attempt to find a doctors office
that would see me at an affordable rate. But all attempts proved to be unsuccessful.
We tried the local health department but were unsuccessful in obtaining an immediate appointment and were told that I would have to be placed on a waiting list.
We attempted to be seen at another health department in a surrounding county. In
order to be seen there, I would need to arrive at the clinic no later than 7:00 a.m.
due to limited availability of appointments. This clinic had a limited number of staff
and because of this could only take the first five people in line. There were so many
people in line when I arrived at 6:15 a.m. that I immediately became discouraged.
I was not one of the five.
I finally received medical attention from a health clinic that was an hour and thirty minutes outside of the county where I resided. Even still there was only so much
that could be done for me because I had waited so long to get medical attention for
my condition. I had to yet again be referred to another clinic for lab work. Though
I was still frustrated, I did schedule an appointment for the lab work. After numerous clinic visits, help from many concerned, supportive adults in my corner, to this
day I continue to have a medical condition that needs to be treated. There is a possibility that this condition may indeed require surgery. So, here I am back at the beginning, right where I started from two years ago. I have no health insurance, no
means of affording insurance, no parents insurance that will cover me.
My recommendation to this Subcommittee would be for Congress to mandate
States to exercise the Medicaid option of the Chafee Act to allow youth to have medical coverage to age 21 as we transition from foster care.
The State of Georgia was my parent for many years. Consequently, it would help
youth transitioning from foster care so much if my parentthe State of Georgia
stepped up to the plate and assume its parental role. Medicaid until age 21 would
be a first step to helping former youth in foster care, young people like me, become
healthy, self-sufficient, productive individuals as we receive the help we need for
physical and emotional problems. Still, a more comprehensive approach is also needed to address the health care needs of young adults who remain uninsured.
Thank you.
f
Chairman MCDERMOTT. Thank you very much for coming and

telling us your story. Your giving of details really made it live, so
thank you very much.
Mr. Lesley is the president of First Focus from Alexandria, VA.
First Focus is an organization, as I understand it, that focuses on
children and families, which try to be our first focus. Mr. Lesley.
STATEMENT OF BRUCE LESLEY, PRESIDENT,

FIRST FOCUS, ALEXANDRIA, VIRGINIA
Mr. LESLEY. Thank you, Mr. Chairman. Good morning Mr.

Chairman, and Congressman Herger, Camp and Lewis. I am Bruce
Lesley, as the Chairman noted, president of First Focus, a bipartisan organization dedicated to making children and families a priority in Federal policy and budget decisions. I would like to thank
the Subcommittee, and its members, for bringing the important
voice of children and foster care youth to this discussion and also
for your recent hearings on the health care needs of children in the
foster care system, and child welfare system.
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I appreciate the opportunity to testify today about the financial
problems confronting children and families in the health care system and to suggest possible policy solutions to help these families.
Nowhere are families more vulnerable, than when it comes to access to health care. Unfortunately, the trends are alarming on this
front.
First, the number of uninsured children in this country is on the
rise, after almost a decade-long reduction in the number of uninsured children due to the passage of SCHIP. The Census Bureau
found that in 2006, the number of uninsured has risen to 8.7 million, or 11.7 percent of the nations children are now without health
insurance.
The number of uninsured children had declined by a third since
the creation of SCHIP a decade ago, but has in the past 2 years
reversed course and has increased by one million children. While
the national trend is certainly alarming, a State by State look at
the insurance status of children reveals trends that are, perhaps
even of more concern.
In 39 States and the District of Columbia, the percentage of children without insurance was higher in 2006 than it was in 2004,
and in 29 States the rate increased by a full percentage point or
more.
Second, middle class families are not able to afford the rising cost
of health care. The drop in employer-sponsored insurance for children suggest that dependent coverage is declining more rapidly
than the individual employee coverage. According to data from the
Kaiser Family Foundation Health Research and Education Trust
survey of employer sponsored health benefits, the average annual
cost for single and family coverage in 2007, is $4,479 for the individual and $12,106 for a family.
Thus, the average cost for family coverage is 2.7 times the cost
for individual coverage. However, employers subsidize individual
workers for coverage to a much greater extent than they subsidize
family coverage. As a result, the average premium cost paid by
workers for family coverage is 4.7 times the cost of individual coverage.
Thus, family coverage is far more expensive, and it is becoming
harder for families to absorb. Rising health care costs lead to financial instability, and the underinsured account for the majority of
bankruptcy filings. Between 2001 and 2007, health care premiums
have increased 78 percent, while inflation increased by 17 percent
and worker wages increased by 19 percent.
Health care premiums have therefore, increased at four times the
rate of worker wages. Consequently, families are increasingly faced
with a triple threat to their financial security in the form of a limited family budget confronted with large annual increases in premiums, increases in other forms of cost sharing such as copayments, deductibles and health benefit limitations.
With fewer employers offering coverage, families are facing the
ultimate threat to financial security, having no insurance at all, or
being forced to pay out of pocket for exorbitant health care costs.
It is estimated that 16 percent of families spend more than 5 percent of their income on health care, and between eight and 21 per-
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cent of American families are contacted by collection agencies about
their medical bills on an annual basis.
Of the 3.9 million people involved in personal bankruptcy filings
in 2001, it is estimated that 1.3 million, or one-third of them were
children.
To assess the impact of rising health care costs to middle-class
families across America, First Focus analyzed the 12 communities
that are closest to the districts represented by members of this
Subcommittee. Analysis is in Appendix B of my testimony, and
shows that families who are in the median income in 11 of the 12
communities are left with no money, after taking into account the
average cost of housing, food, child care, transportation, other necessities, taxes and health care cost.
Health care, which is unaffordable for families with special needs
children and unavailable for mental health services. I would like to
highlight the particular problems facing families with children with
special health care needs. These children, by definition, have
health care costs that are three times greater than the costs of children without special health care needs. These children face problems including discontinuity of coverage, inadequate coverage of
needed services, inability to obtain referrals through appropriate
specialists because of insurance plan limitations and inadequate
provider payment levels and thereby, access to care.
Doctors Alex Chen and Paul Newacheck have found that the proportion of families with children with special health care needs who
reported parents needing to stop work, or cut back on work, in
order to care for their children was 30 percent. The overall proportion of families who reported having financial problems due to their
childs care was 21 percent. A large percentage of families in this
country are having huge financial difficulties with respect to health
care costs.
With respect to mental health, I think that issue is highlighted
by the very fact that the National Alliance for Mental Health did
a survey, and found that 23 percent of parents with children exhibiting behavioral disorders reported being instructed to relinquish
custody of their children, in order to ensure they receive appropriate mental health care treatment. No family should face such a
decision.
I know I am out of time, so I will quickly say that I also think
that issues that have been raised by the previous panel member
really speak to the need to pass legislation like H.R. 2188, the Kinship Care giver Support Act. Sherena was in the care of her grandmother, and her grandmother could not take care of her financially.
The Kinship Care giver Support Act would help families of kinship
care be provided in this country, so that is not a situation that occurs.
In conclusion, First Focus would like to make the following recommendations. We believe that the solution to health care is going
to require a lot of different efforts, including expansion of public
programs like Medicaid and SCHIP, premium support, tax credits
and personal responsibility; it is going to take all those things to
really tackle this problem.
Congress should take no action that would limit or restrict the
ability of States to address their uninsured or under-insurance
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problems, and if nothing else, we hope that Congress will not take
negative actions to roll back that coverage. Congress should also
take leadership in a variety of areas involving children, particularly children with special health care needs, by passing mental
health parity laws that I know the Chairman has been very strongly supportive of, and legislation such as the Keeping Families Together.
In addition, since 62 percent of all children in this country who
are uninsured are eligible but un-enrolled for Medicaid or SCHIP,
Congress should take up the Presidents challenge when he ran for
reelection to cover millions of these children by working with
States to conduct extensive outreach and enrollment efforts,
streamlining application and enrollment procedures and making
more extensive use of other needs-based public programs to enroll
children. This is legislation called Express Lane Eligibility.
Finally, Congress should focus on the most disadvantaged youth
in our Nation and address gaps in coverage, health care coverage
for foster care children including access to care, the needs of youth
aging out of the child welfare system and kinship care issues.
Thank you very much.
[The prepared statement of Mr. Lesley follows:]
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Chairman MCDERMOTT. Thank you very much.

Sara Collins is here with the Commonwealth Fund. As vice president in charge of future health insurance, Commonwealth Fund
79
has been at the table here, and in many places in the 20 years that
I have been in Congress. We welcome your testimony.
STATEMENT OF SARA COLLINS, ASSISTANT VICE PRESIDENT,

PROGRAM ON THE FUTURE OF HEALTH INSURANCE, THE
COMMONWEALTH FUND
Ms. COLLINS. Thank you Mr. Chairman, and Members of the

Committee, for this invitation to testify on the impact of gaps in
health coverage on income security. As rising health care costs and
premiums are making it more difficult for employers, particularly
small firms, to provide affordable health insurance to their workers, increasing numbers of people under age 65 are finding themselves without access to employer-based coverage, and ineligible for
enrollment in public insurance programs like Medicaid, and the
State Childrens Health Insurance Program. Or Medicare, in the
case of those too disabled to work. With its high premiums and underwriting, the individual insurance market, which covers just 6
percent of the under 65 population, has proven to be an inadequate
substitute for employer or public coverage.
Who is most at risk for lacking coverage? Low and moderate income families. More than 60 percent of uninsured people under age
65 are in families with incomes of under 200 percent of poverty.
The majority of people without coverage are families where someone works full-time, but the likelihood of low and moderate-income
families having coverage through an employer has always been
lower than that of higher-income families, and has declined over
the past 6 years. Small firm and low wage workers, workers who
are employed in firms with fewer than 15 employees are less likely
to have coverage through an employer.
Lower wage workers in small firms are at a particularly high
risk for not having benefits. Non-standard workers, those who are
self-employed, or in temporary part-time or contract positions, are
at high risk of not having coverage, about 24 percent are uninsured. More than 13 million young adults, ages 19 to 29 are uninsured. Employer health plans often do not cover young adults as
dependents after 18 or 19 if they dont go on to college.
Medicaid and the State Childrens Health Insurance Program, as
weve just heard, we classify all teenagers as adults on their 19th
birthday. Consequently, there is a dramatic increase, an actual
doubling of uninsured rates after age 19, children turning 18 to 19,
particularly among young adults and low-income families.
Minorities are also at very high risk of lacking health insurance,
as are people who are unemployed. Despite the availability of
COBRA coverage, over half of unemployed adults under age 65 are
uninsured. Lower wage workers are far less likely to be eligible for
COBRA than higher wage workers. Even COBRA eligible low-income workers who leave their jobs are much more likely to be uninsured than our higher wage workers who are COBRA eligible.
There are an estimated 1.7 million people with disabilities in the
waiting period for Medicare. In a Commonwealth Fund survey of
older adults, more than two of five disabled Medicare beneficiaries
between the ages of 50 and 64, said that they had been uninsured
just prior to entering Medicare.
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What are the consequences of gaps of health insurance coverage?

Significantly higher rates of cost related problems getting needed
health care, and problems paying medical bills. People without coverage confront profound spending tradeoffs in their budgets, as
Chairman McDermott pointed out. A Commonwealth Fund survey
found that 40 percent of uninsured adults with medical bill problems were unable to pay for basic necessities, and nearly 50 percent had used up all their savings to pay their bills.
The Institute of Medicine estimates that uninsured people collectively lose between $65 billion to $130 billion each year, in lost capital and earnings from poor health and shorter lifespans. It is essential on both moral and economic grounds that the United States
move forward to guarantee affordable, comprehensive and continuous health insurance coverage for everyone.
In the absence of universal coverage, there are several policies
that would help fill the gaps in the existing system, by building on
existing public and private group insurance, and also create an essential foundation for universal coverage as we move forward.
We should build on, for example public and private group insurance, to extend coverage to vulnerable age groups and the disabled.
For example, we should allow States to extend eligibility for Medicaid and SCHIP coverage beyond age 18. The Foster Care and Dependence Act, which allows States to extend Medicaid to children
in foster care up to age 21, should be taken up by all States and
could be expanded to all children in the Medicaid program.
Seventeen states have already redefined the age at which a
young adult is no longer a dependent for purposes of insurance.
Other states should follow their lead. We should allow older adults
to buy into the Medicare Program, and Medicares 2-year waiting
period for coverage of the disabled.
We should also build on public and private group to extend coverage to low income workers and families, expand Medicaid to
cover everyone under 150 percent of poverty and consider providing
Federal matching funds for sliding scale premiums at higher income levels. We could require employers to finance COBRA coverage for up to 2 months or longer, for employees who lose their
jobs, and the Federal Government could provide COBRA premium
assistance for COBRA premiums.
Finally, we could connect public and private group insurance to
realize efficiencies from pooling large groups of people, create a national health insurance connector, as Massachusetts has led the
way on. Based on the Federal employees health benefits program,
or Medicare with sliding scale premium subsidies, restrictions
against risk selection on the part of carriers, and Federal reinsurance. Thank you.
[The prepared statement of Ms. Collins follows:]
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113
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Chairman MCDERMOTT. Thank you very much for your testimony.
Mr. Pollack, since 1993 at least. It is good to have you here
again. He is the founding executive director of Families USA.
STATEMENT OF RON POLLACK,

FOUNDING EXECUTIVE DIRECTOR, FAMILIES USA
Mr. POLLACK Thank you Mr. Chairman, and thank you members of the panel for inviting me here today, I appreciate it. I want
to just start with a contextual comment. You started, Mr. Chairman, by talking about a number of people who are uninsured in
the latest Census Bureau numbers from the Current Population
Survey, and it tells us that 47 million were uninsured in 2006.
Now, there is a dispute among policy analysts as to what this
means. The literal question asked was, were you uninsured
throughout the course of the year.
Some policy analysts, many policy analysts actually, interpret
the data as telling you how many people were uninsured at the
time the survey was undertaken. But under either interpretation,
it doesnt tell you how many people were affected by being uninsured at some point over the course of a year.
By the way, 47 million sounds like an unascertainable number,
and people cant put their hands around it. The way I like to talk
about it is 47 million is more than the aggregate, underscore the
word aggregate, population of 24 States plus the District of Columbia; that is extraordinary. The number of people who are uninsured almost exceeds the population of half the States in the
United States. But, as bad as that is, it doesnt reflect how many
people go in and out of being uninsured.
For that reason, we have submitted to the Committee a recent
report that Families USA released, that is based on other Census
Bureau data, to look at how many people were uninsured at some
point over the last 2 years. The number is astounding. The number
of people who were uninsured at some point over the last 2 years
was 89.6 million people. This is not double counting people who
were uninsured 1 year and then a second year these are separate,
people who were uninsured at some point over the course of the
last 2 years.
Mind you, most of these people were uninsured for periods that
you cant consider trivial. Over half were uninsured for more than
9 months in the 2-year period. Almost two-thirds were uninsured
for at least 6 months in that 2-year period. So, this is rather substantial, and obviously it is likely to get worse because the cost of
insurance premiums is rising faster than wages.
There are a variety of impacts that this created, and I guess this
is the heart of what you wanted me to talk about. There are health
care impacts for the persons who are uninsured, which reflects
their limited incomes. Then there are other impacts, even for people who are insured. So, let me just talk about some of the health
impacts for people who are uninsured.
The uninsured are far less likely to have a usual source of care
outside the emergency room. Uninsured adults are almost seven
times more likely than insured adults to consider the emergency
room as their usual source of care. The uninsured are more likely
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to go without screenings and preventive care. Uninsured adults are
30 percent less likely than insured adults to have had a check-up
in the past year. They are more likely to be diagnosed with a disease in an advanced stage.
The uninsured are likely to delay, or forgo, needed care. Fifty
percent of insured adults, in fair or poor health, reported that they
needed care in the last year, but were unable to see a physician
because of cost. One in three uninsured adults did not fill a drug
prescription in the past year because they couldnt afford the cost.
Uninsured Americans are more likely to be sicker and to die earlier. Of course you know the Institute of Medicine statistic that
18,000 people are estimated to die annually because of their uninsured status. Uninsured children admitted to a hospital due to injuries were twice as likely to die while in the hospital as their insured counterparts.
Now, all of this has some very significant economic impacts, even
for those people who are insured. We issued a report, not too long
ago, that looked at what the impact is on those of us who purchase
insurance to pay for the uncompensated care of those who are uninsured. In 2005, the premium add-on to pay for the uncompensated cost of the uninsured for family health coverage was $922.
Today, I suspect, when we do an update on this, we are likely to
find that people are paying $1,000 or more as an add-on to their
insurance premiums to pay for the uncompensated care of the uninsured.
More than one out of three who were uninsured were contacted
by a collection agency in the past year, and 3 out of 5 uninsured
have reported problems with their medical bills. Let me end by saying that clearly, dealing with this growing problem, of people who
are uninsured, deserves top priority attention. Rather than going
through a list of things that we believe should be done, let me just
close by saying that I think for us to finally address this problem,
we are going to have to do business differently than we have ever
done before.
It means we are going to have to address this in a bipartisan
fashion. We are going to have to transcend ideology. There are
groups of what, I guess, some people generally call strange bedfellow organizations that have been working together. They transcend ideology, they transcend partisanship, and my hope is that,
come 2009, if this Congress truly wishes to address this problem
in a serious way, that we will be able to come here with a proposal
that can earn the support of people on both sides of the aisle. So,
I thank you, Mr. Chairman.
[The prepared statement of Mr. Pollack follows:]
Prepared Statement of Ron Pollack,
Founding Executive Director, Families USA, Washington, DC
Families USA thanks the Subcommittee on Income Security and Family Support
of the House Committee on Ways and Means for the opportunity to present testimony on the impact of gaps in health coverage on income security. This testimony
focuses on the issue of the uninsured more broadly, as well as the effects of the crisis of the uninsured on the uninsured themselves, people with insurance, and the
U.S. economy.
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I. Magnitude of the Problem

Every year, the U.S. Census Bureauin its Current Population Survey (CPS)
reports the number of people who are uninsured. This widely quoted number is intended to offer an estimate of how many people did not have any type of health insurance for the entire previous calendar year. In August 2007, the CPS reported
that there were 47.0 million uninsured people in the United States in 2006. This
represents an increase of nearly 2.2 million people over 2005. The number of uninsured is also now larger than the combined population of 24 States plus the District
of Columbia.
There are many people, however, who are uninsured for a portion of a year but
not for the entire year. These individuals are not reflected in the widely quoted Census Bureau number, but they may be profoundly affected by their uninsured statusin terms of both their physical and their economic well-being. To understand
the scope of the problemto know how many Americans are directly affected by a
lack of health insurancewe need to broaden our sights and include those who are
uninsured for a portion of the year.
A recent analysis by Families USA reveals that 89.6 million people under the age
of 65more than one out of every three non-elderly Americanswent without
health insurance for all or part of 20062007. In addition, we found that the number
of uninsured people increased dramatically over our study period: Between 1999
2000 and 20062007, more than 17.0 million Americans under the age of 65 joined
the ranks of the uninsured.
Our findings demonstrate that the crisis of the uninsured affects a diverse array
of people. Americans from every income group, every racial and ethnic group, and
nearly every age group are uninsured. In addition, as previous research has demonstrated, the vast majority of the uninsured are from working families. Four out
of five individuals who were uninsured during 20062007 were from working families, and 70.6 percent of the uninsured were from families with one or more people
employed full-time. Moreover, the majority of people who are uninsured remain uninsured for substantial periods of time: Over one-half (50.2 percent) were uninsured
for more than nine months, and almost two-thirds (63.9 percent) were uninsured for
more than six months. The effects of being uninsuredeven for a period of a few
monthscan be devastating, both financially and physically. Furthermore, as the
duration of time without health insurance increases, so do the chances of facing catastrophic financial and health problems.
II. What the Crisis of the Uninsured Means for the Uninsured
Being uninsuredeven for a period of a few monthscan have profound effects
on an individuals physical and economic well-being. Without insurance to cover the
costs of routine health care, the uninsured often go without screenings or preventive
services. Uninsured adults are more than 30 percent less likely than insured adults
to have had a checkup in the past year. Even when uninsured adults do receive preventive care and know they have a chronic condition, they are less likely to receive
proper follow-up care. For example, uninsured patients with high blood pressure are
less likely to have their blood pressure monitored and controlled, and they are less
likely to receive disease management services.
In addition, people without insurance are more likely to delay or forgo necessary
medical care. When sick, uninsured adults are more than three times as likely as
insured adults to delay seeking medical care. And uninsured children are nearly five
times more likely than insured children to have at least one delayed or unmet
health care need.
The consequences of going without necessary care can be dire. Uninsured Americans are sicker and die earlier than those who have insurance, and consistently report that they are in poorer health than people with private insurance. Lower levels
of self-reported health status, in turn, are a powerful predictor of future illness and
premature death. In fact, uninsured adults are 25 percent more likely to die prematurely than adults with private health insurance coverage, and the deaths of
18,000 people between the ages of 25 and 64 each year can be attributed to a lack
of health insurance.
Without the protection of insurance, uninsured Americans are also at financial
risk when faced with the need for health services. Three out of five uninsured adults
under the age of 65 reported problems with medical bills. And, over the course of
a year, more than one out of three uninsured people are contacted by a collection
agency about outstanding medical bills. When the burden of health care costs becomes too great, the consequences can be catastrophic. Faced with medical debt,
families often have no choice but to consider drastic changes in lifestyle and, eventually, bankruptcy. Since 2000 alone, 5 million American families have filed for bank-
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ruptcy following a serious medical problem. In all, approximately half of bankruptcies are due, at least in part, to medical expenses.
III. What the Crisis of the Uninsured Means for the Insured
What happens when the uninsured are sick and need health care? Certainly, the
uninsured are much less likely to receive health care, and many never do. Those
who seek care, however, struggle to pay as much as they can. Even after making
tremendous personal sacrifices, the contributions made by the uninsured toward
their medical bills cover an estimated 35 percent of the cost of care they receive
from doctors and hospitals. The remaining amount is primarily paid by two sources:
Roughly one-third is reimbursed by a number of government programs, including
Medicaid and Medicare Disproportionate Share Hospital (DSH) payments from the
federal government and state and local programs, and two-thirds is paid through
higher premiums for people with health insurance.
Families USA estimates that almost $29 billion worth of unpaid care received by
the uninsured in 2005 was financed by higher premiums for privately insured patients. As a result, the cost of private insurance was, on average, 8.4 percent higher
in 2005 than it would have been if everyone in the United States had health insurance. This translates into $341 more a year for the average individual premium and
$922 more a year for the average family premium.
How does the cost of care for the uninsured end up being passed on in the form
of higher private health insurance premiums? The cost of care not directly paid for
by the uninsured or by government programs or philanthropy is built into the cost
base of physician and hospital revenue. Providers attempt to recover these uncompensated care dollars through various strategies. One key strategy is to negotiate
higher rates for health care services paid for by private insurance. The extent to
which providers can do this varies from State to State; nonetheless, the rates always
reflect a significant amount of uncompensated care. Given that most health care
providers are not driven to bankruptcy and our health care system survives from
year to year, we can say with certainty that those with health insurance finance
the residual two-thirds cost of care for the uninsured provided by hospitals and doctors. Ironically, this increases the cost of health insurance and results in fewer people who can afford insurancea vicious circle.
IV. What the Crisis of the Uninsured Means for the U.S. Economy
The crisis of the uninsured also has consequences for the nations economy as a
whole. While the microeconomic effect of going without health insurance on the individual has been studied extensively and is cited frequently, the macroeconomic effect of so many Americans going without health insurance is less frequently discussed. Economists estimate that between $65 and $130 billion of productivity is
lost each year due to people going without health insurance in America.
Access to health insurance at every age is vital to the productivity of a nations
workforce. Ensuring that children have a healthy start sets the foundation for future productivity and helps kids reach their full potential. Insured children are less
likely to have developmental delays that may affect their ability to learn. In addition, improving health increases educational attainment and raises earnings potential by 10 to 30 percent.
Once a worker is in the labor force, consistent access to quality health coverage
is critical. Studies have shown that insured employees are healthier, and better
health, in turn, is related to increased productivity. In fact, one study showed that
providing health insurance alleviates one in 10 days missed for illness. Three in four
employers believe that health benefits are extremely, very, or somewhat important
for improving employee productivity. In addition, providing health insurance ensures that employees have access to primary and preventive care that keeps them
healthy and productive in the long-run.
Moreover, health insurance reduces turnover. The cost of hiring and training new
employees drains business productivity. Many studies show that workers with
health insurance change jobs less frequently. Nearly three-quarters of workers said
that health insurance was a very important factor in their decision to take or keep
a job. While the importance of health insurance to the individual is clear, these data
demonstrate the significance of health insurance in ensuring a healthy, productive
labor force. The current epidemic of the uninsured places not only American families, but also businesses, and our nations economic vitality at risk.
V. Why is the Number of Uninsured on the Rise?
Millions of people are currently uninsured, and this problem has grown substantially over the last few years. One of the primary factors driving the increase in the
uninsured is health insurance premium increases. Between 1999 and today, premiums have risen rapidly, increasing by double-digit amounts every year between
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2001 and 2004. Moreover, these rising premiums have far outstripped increases in
worker earnings. Between 2000 and 2006, premiums for job-based health insurance
increased by 73.8 percent, while median worker earnings rose by only 11.6 percent.
As premium costs outpace wages, more people end up without health insurance: For
each percentage point increase in health care costs relative to income, the number
of uninsured people increases by 246,000.
Faced with the rising cost of health insurance premiums, employers must make
difficult decisions. Some employers, particularly small businesses, have concluded
that they can no longer afford to offer health insurance to their workers and have
dropped coverage, further increasing the number of uninsured Americans. Other
employers continue to offer health insurance, but they now ask their employees to
pay a greater share of the premiums. In addition, a growing number of employers
seek to hold down costs by offering thinner coveragecoverage that offers fewer
benefits and/or charges higher deductibles, copayments, and co-insurance.
Working families must contend with a set of difficult decisions. Even if someone
in the family has an offer of coverage, he or she is likely to be required to pay more
for fewer benefits than in the past. Between 2000 and 2006, the employee share of
family insurance premiums increased by 78.2 percent. As a result, more and more
working families are being priced out of job-based insurance.
Workers without an offer of job-based coverageand those who cannot afford to
purchase their employers planmay seek coverage on their own. Finding an individual insurance plan that meets their needs and their budget is likely to be extremely challenging. One recent survey found that nine out of 10 people who sought
individual coverage never purchased a planeither because they couldnt find an affordable plan, they were rejected for coverage, or they were offered a plan that excluded coverage for the very care they were most likely to need. Without the availability of affordable, quality coverage, more American families are at risk of becoming uninsured and suffering the economic and physical consequences that are likely
to follow.
VI. Conclusion
As this testimony demonstrates, the current crisis of the uninsured detrimentally
affects not only the uninsured themselves, but also people with health insurance
and the economy as a whole. Ensuring that all Americans have access to quality,
affordable health insurance coverage is imperative to protecting the economic and
physical well-being of all Americans. Moreover, popular support for reforming health
care is evidenced by the fact that health care has become the top domestic issue
in recent polls and public option surveys. Families USA is glad to see that presidential and other candidates are making health care a central issue of their campaigns. The challenge for the upcoming months and years will be for our nations
leaders to move from debate to actionmaking health care a top budget and issue
priority, and ensuring that every American has reliable and continuous access to
high-quality, affordable health coverage.
f
[The Families USA report follows:]
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Chairman MCDERMOTT. Thank you very much for your testimony.

Mr. Gottlob, who is a senior fellow at the Milton and Rose Friedman Institute Foundation.
158
STATEMENT OF BRIAN J. GOTTLOB, SENIOR FELLOW,

MILTON AND ROSE D. FRIEDMAN FOUNDATION
Mr. GOTTLOB. Thank you, Mr. Chairman. I have not been here
before so it is indeed an honor and a privilege for me to be able
to testify today.
The Friedman Foundation encourages greater economic opportunity and security by supporting research activities and increased
educational opportunities for children from all socio-economic backgrounds.
Among my research activities for the Friedman Foundation is I
have attempted to monetize or place some dollar values on some
of the public or social costs that are associated with dropping out
of high school. For too long the costs of dropping out of high school
have been assumed to be primarily fall on an individual and primarily in terms of the earnings impact on an individual over their
lifetime.
But there are significant costs to society, and among those and
among the most significant are the problem that youre here today
to address, and that is the lack of health insurance coverage and
also increases in Medicaid enrollment and Medicaid caseloads.
Theres been a lot of reforms that have proposed to fundamentally change the way we provide health care, the way we ration it
or the way we pay for it. What I would like to do today is argue
for policies that focus on increasing educational attainment and reducing high school dropout rates across the country as an effective
means for dealing with these issues.
There is no doubt that increasing high school graduation rates
will increase health insurance coverage, and at the same time provide powerful other benefits to society while at the same time presenting no fundamental risks to our health care system.
I do want to talk a little bit about the number that youve been
presented with today: 47 million uninsured individuals. While that
is troubling and it demands your best efforts to address, before concluding that we need to make basic, fundamental changes to our
health care system, I think we ought to understand a little bit
more about that population of 47 million.
Included in that group is 10.2 million individuals who are not
U.S. citizens. It includes about 11 million who chose not to participate in employer-sponsored health plans that were available to
them. A lot of those are young workers who, thinking as I did once
that I was immortal, dont opt to participate in those plans. Almost
half, 49 percent or 23 million, are of African-American or Hispanic
origin. I didnt include this in my testimony, but theres also a
large number, probably several million who would qualify for Medicaid and have insurance, but they havent applied for it.
Looking at the most recent year, because that number is also
troubling, or the most recent 6 years: an 8 million increase and
about a third, 2.57 million, are not U.S. citizens. More recently, in
the last year of the 2.1 million increase in uninsured population,
38 percent are not U.S. citizens. 4.5 million are of Hispanic origin,
both citizens and non-citizens, 1 million African-Americans, about
45 percent or 3.7 million have family incomes above 75,000. That
truly is a problem with the fundamental nature of our health care
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system. Theres been virtually no increase in the uninsured among
individuals and households making less than $25,000.
I dont cite those figures to stereotype the population and I certainly dont want to engage in the already overheated debate on
immigration, but what I think the data suggests is that theres a
tremendous heterogeneity among the population of the uninsured.
That does not lend itself to blanket prescriptions to address the
problem.
I see in the data an overrepresentation of individuals from demographic groups that are characterized by lower levels of educational
attainment and higher levels of high school dropout rates. Others
can see different things in the trends, but we cant escape the notion that the data suggests that there are a variety of factors, including many outside of the health care system, that are characterizing the lack of health insurance among our population.
Lower levels of educational attainment and higher dropout rates
reduce health insurance. About 40 percent of the working age high
school dropout population are not in the labor force, so they cant
get health insurance from their employer. Dropouts comprise 12
percent of the working age, 20 to 64 population, but make up 30
percent of the working age uninsured. Dropouts are twice as likely
to be receiving or having someone in their family receive Medicaid
benefits.
Employer provided health insurance is still the dominant source
of coverage, but when someone drops out, they cannot avail themselves of that. If all working age dropouts in this country, and
theres about 20 million of them, if all of them had been high school
graduates and we applied those same percentages, about 4 million
would be covered by private insurance. If you add independents, it
would be at least 10 million who would be covered, an additional
10 million. The cost of dropouts to the Medicaid program is about
an additional 3.5 million Medicaid beneficiaries every year and a
cost of about $7 billion.
If everyone graduated, no one dropped out, we wouldnt eliminate
that, but we would reduce it. We would reduce it by that 3.5 million and $7 billion in costs. Attacking the problem of high school
graduation rates with the same figure that we want to attack, the
health care issue, I think will yield not only benefits in the health
care side, but also substantial other public benefits and societal
benefits. Just because you are on the Committee on Ways and
Means, I have to point out that the lost earnings impact of high
school dropouts in this country is almost $200 billion and a tax cost
of about $31 billion.
What can be done to address the problem? Well, there is no one,
single solution. I believe theres a lot of innovative practices that
are being attempted and more will follow. I personally believe that
the educational system in the country contains far too much segregation of students and families according to income and educational attainment of parents. This segregation has profound impacts on the differential, educational opportunities of children. No
matter how much we increase funding for education, there maintains a separate tacit but equal structure to educational opportunities in this country. The result is a lot more separation and a lot
less equality.
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In conclusion, some of the most effective means of reducing the
number of uninsured individuals in this country do not involve fundamental changes to our health care system. In addition, they confer benefits outside of the health care and health insurance arena.
I suggest that some of the factors that are contributing to the lack
of health insurance are not simply fundamental flaws of the health
care system to maximize public benefits while addressing declines
in health insurance. We ought to look to opportunities to create
those synergies; and, increasing high school graduation is one way
to dramatically reduce the future incidence of individuals without
health insurance.
Thank you.
[The prepared statement of Mr. Gottlob follows:]
Prepared Statement of Brian J. Gottlob, Senior Fellow,

Milton and Rose D. Friedman Foundation, Indianapolis, IN
Mr. Chairman and Members of the Committee:
Thank you for inviting me to testify on the important issue of health insurance
coverage and income security in the United States. The Friedman Foundation encourages greater economic opportunity and security by supporting research and activities that increase the educational opportunities and achievement of children
from all socioeconomic backgrounds.
In addition to my work with the Friedman Foundation, I am a principal in an
economic research and consulting firm. My testimony today is based on my work
for the Friedman Foundation, but some of my comments may also reflect personal
views rather than the views of the Foundation.
Among my research activities for the Friedman Foundation I have attempted to
place dollar values or monetize several of the public or social costs associated with
the low high school graduation rates that are characteristic of many school districts
across the country. The impact of dropouts is especially apparent in the low rates
of private health insurance and in the higher Medicaid enrollments among dropouts.
In addition, the higher percentage of uninsured among dropouts can raise the cost
of private health insurance when the cost of health services for the uninsured is not
paid and must be recovered by raising prices on all other payers.
For too long the costs of failing to obtain a high school diploma have been expressed primarily in terms of the cost to individual dropouts. These private costs,
typically expressed in terms of lost annual earnings and over a lifetime, are large.
My research indicates, however, that the cost to the public in terms of higher government expenditures and lower revenues are no less dramatic.
Many reforms have been proposed to the way we provide, ration, or pay for health
care in this country. To increase the percentage of the population that is covered
by health insurance I want to instead argue for policies that focus on increasing
educational attainment and reducing high school dropout rates across the country.
The benefit of this approach is that we know that the failure to obtain a high school
diploma is strongly related to the lack of health insurance as well as with higher
utilization of government provided health insurance and associated health care expenditures. There should be no debating that higher graduation rates will increase
health insurance coverage with no risk of unintended consequences to the health
care system.
The benefit to individuals and to society of focusing on policies that reduce high
school dropouts extend well beyond health insurance coverage. Even modest increases in graduation rates will have a clear and dramatic impact on future rates
of health insurance coverage at the same time it increases government revenues and
reduces government expenditures.
Overview
The uninsured population in this country has risen by more than 8 million since
the year 2000, to a total of just under 47 million in 2006. That number is troubling
and demanding of our best efforts to reduce it, but before concluding that the basic
structure of our nations health care system must be revamped it is prudent to look
more closely at trends in the incidence of health insurance coverage and more
broadly at the factors that have contributed to them.
Using the same U.S. Census Bureau data on trends in the population without
health insurance that, in part, have prompted this hearing, I will highlight some
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of the more significant trends in insurance coverage that can be overlooked with a
focus on the aggregate numbers.
The 47 million estimated by the Census Bureau to be uninsured include: 1
10.2 million who are not U.S. Citizens.
About 11 million who chose not to participate in an employer sponsored health
plan that was available to them. Young adult workers are especially prone to
decline participation in employer-sponsored health plans.
Almost one-half (49% or 23 million) who are African-American or of Hispanic
origin.
The troubling increase of over 8 million uninsured in the United States between
2000 and 2006 includes the following trends:
Almost one-third (2.57 million) are not U.S. Citizens. More recently, among the
2.1 million increase in the uninsured population between 2005 and 2006, 38
percent are not U.S. Citizens.
Almost 4.5 million are of Hispanic origin (both citizens and non-citizens.)
Just over 1 million are African-American.
About 2.3 million (or 27%) are Non-Hispanic white individuals.
About 45% or 3.7 million have family incomes of $75,000 or more.
Virtually no increase in the number of uninsured (44,000) among individuals in
households making less than $25,000.
Highlighting the above data and trends from the Census Bureau in no way minimizes the very real concerns over the decline in health insurance coverage or to
stereotype the population or characteristics of the uninsured, or discount or minimize their plight. Finally, neither I nor the Friedman Foundation has any interest
in fanning the flames of an overheated heated debate on immigration policy.
If anything, these data highlight heterogeneity among the population of the uninsured that does not lend itself to blanket policy prescriptions to increase the number
of those with health insurance coverage. Rather, I believe the data suggest that a
broader set of policies should be considered to increase health insurance coverage
in our country.
At the risk of being accused of seeing what I know rather than seeing what the
data are revealing, I see in the data an overrepresentation of individuals in demographic groups that are characterized by lower overall levels of educational attainment and elevated levels of high school dropout rates. Others may see the trends
differently but we cannot escape the fact that the data suggest that a variety of factors, including many outside of the characteristics of our health care system, appear
to greatly influence the size of the population without health insurance. Thus efforts
to increase health insurance should examine policies outside the sphere of our
health care system that may exert a large or a larger influence on the size of the
uninsured population.
Aside from the impact of educational attainment, the rise in the number of uninsured individuals among households with annual income of $75,000 is perhaps the
most revealing trend in health insurance coverage. The trend likely reflects a decline in the number of employers providing health insurance, changes in cost sharing arrangements between employers and employees that results in fewer employees
opting to participate in employer provided plans, or some combination of the two.
An increase in the self-employed who have traditionally had lower rates of health
insurance coverage is also a contributor.
The decline in employer provided health insurance is a complex phenomenon that
is affected by many variables such as cost shifting to private payers, the impacts
of coverage mandates and regulations, medical service cost inflation, demographics
and many other factors. As a result, reversing the declining trend of employer provided insurance will be among the most challenging avenues for increasing insurance coverage.
The Impact of Dropouts on Health Insurance Coverage
Lower levels of educational attainment and higher dropout rates reduce health insurance coverage and increase government expenditures.
Almost 40% of working-age high school dropout ages 2064 are not in the labor
force. Less than one-quarter of dropouts receive employer-provided health insurance coverage.
1 Data on health insurance coverage and trends are from the U.S. Census Bureau analyses
available
at
http://pubdb3.census.gov/macro/032007/health/h09_000.htm
and
http://
www.census.gov/hhes/www/hlthins/hlthin00/hi00ta.html
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Dropouts comprise about 12% of the working age (2064) population but make
up almost 30% of the working-age uninsured.
Dropouts are nearly twice as likely as high school graduates (38.5% to 21.1%) 2
to be receiving Medicaid benefits or to have someone in their household (dependent children) receiving benefits.
Figure 1Dropouts Represent About 12% of the Working-Age (2064)
Population but 27% of Medicaid Recipients
2 These data are from my analysis of the 2006 and 2007 March Supplement of the U.S. Census
Bureaus Current Population Survey.
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Data from the 2006 and 2007 March Supplement of the Census Bureaus Current
Population Survey indicate that there are approximately 20 million high school
dropouts ages 2064 in this country. The low rate of private insurance coverage
among the population of dropouts increases the demand for government provided insurance such as Medicaid (Figure 1).
Employer provision of health insurance is still the dominate source of coverage
for Americans and the higher rates of employment of high school graduates compared to dropouts mean that reductions in dropout rates would dramatically reduce
the number of uninsured. If all working age high school dropouts somehow were
transformed into high school graduates, with the same patterns of insurance coverage as exist among current high school graduates, then the number of uninsured
working age adults would drop by almost 4 million. In addition, an increase of 4
million insured would result in additional coverage of many dependents and would
likely mean that at least 8 million, and quite possible more, individuals would have
health private insurance coverage.
Similarly, increasing high school graduation rates will lower government expenditures for health care by reducing Medicaid beneficiaries by an estimated 3.5 million.
At an average annual beneficiary cost of $2,000 (not including the elderly and disabled who have much higher annual costs) Medicaid expenditures would be reduced
by $7 billion annually (Table 1).
Even if the dropout rate were reduced to zero, however, a large number of individuals would still be without health insurance coverage and the number receiving
Medicaid benefits would not decline by the entire number of Medicaid beneficiaries
among the dropout population. Nevertheless the problem would be more manageable and it would be more directly attributable to problems in the health care system rather than artifacts of other economic, demographic, and social factors.
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30,805,745
10,413,640
3,957,896
Bachelors
Masters
Prof/Ph.D
Sfmt 6620
3 Ibid.
17.2%
3.9%
4.9%
6.8%
12.6%
15.5%
21.1%
38.5%
% On or W/
Child on
Medicaid
28,386,419
154,358
510,268
2,094,791
1,926,491
5,133,128
10,789,836
7,777,547
# On or W/
Child on
Medicaid
$56,772,837,426
$308,715,888
$1,020,536,720
$4,189,581,320
$3,852,982,224
$10,266,255,740
$21,579,671,364
$15,555,094,170
Total Cost = # Avg.

Cost
Difference (Annual Medicaid Cost of Dropouts):
164,921,930
15,289,612
AA. Degree
Total
33,116,954
51,136,662
HS Grads
Some Coll. No Degree
20,201,421
# 2064
Table 1: Annual Medicaid Expenditures Attributable to Dropouts 3

(Note: Does Not Include Elderly and Disabled)
Dropouts
3,515,047
24,871,371
154,358
510,268
2,094,791
1,926,491
5,133,128
15,052,336
# On Medicaid if All
Graduated
$7,030,094,508
$49,742,742,918
$308,715,888
$1,020,536,720
$4,189,581,320
$3,852,982,224
$10,266,255,740
$30,104,671,026
$0
Total Cost = # Avg.

Cost
163
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Pursuing policies that increase high school graduation rates as a strategy for increasing health insurance coverage will allow state and local governments to partner with the federal government and to play a prominent role in addressing this
important issue.
Attacking the problem of low high school graduation rates with the same vigor
and attention we give to low health insurance coverage rates will yield large benefits outside of the health care system. One reason why health care and health insurance command so much of our efforts and attention is that we understand the significance these issues have to each of us. In contrast, the dropout problem that so
significantly impacts health insurance coverage, commands far less public and policy
maker attention because it is incorrectly assumed to have only a limited impact on
a majority of the population.
By documenting some of the public as well as private costs of dropouts, my research seeks to bring the same public concern for the problem of high school graduation rates that is evident in concerns over health insurance. Public costs such as
higher rates of crime and incarceration, poorer health, higher unemployment rates,
lower productivity, economic growth, and government revenues, as well as higher
government expenditures for health care and public assistance are all consequences
of low high school completion rates.
Impact of Dropouts on Government Revenues
It is well documented that high school graduates have much higher earnings than
do high school dropouts. The impact of the lower earnings of dropouts on government revenues is less well documented. Table 2 shows that the lower average annual earnings of 20 million working-age dropouts implies wage and salary earnings
in the U.S. that are $194 billion lower than if all dropouts had obtained a high
school diploma. 4
Table 2: Earnings Impact of Dropouts Age 2064 5
Avg.
Wages &
Salary
Total Earnings
If Dropouts Were HS
Grads
Dropouts
20,201,421
$13,078
$264,186,103,270
$0
HS Grads
51,136,662
$22,682
$1,159,866,426,485
$1,618,068,997,181
Some Coll. No Degree
33,116,954
$24,954
$826,393,846,725
$826,393,846,725
AA Degree
15,289,612
$31,449
$480,841,478,827
$480,841,478,827
Bachelors
30,805,745
$46,331
$1,427,245,568,723
$1,427,245,568,723
Masters/Prof./Ph.D
14,371,536
$69,578
$999,944,168,962
$999,944,168,962
164,921,930
$31,278
$5,158,477,592,991
$5,352,494,060,417
Difference
$194,016,467,426
Total
5 Analysis
of 2006 and 2007 Current Population Survey March Supplement data
In addition to the increase in the annual earnings of residents and a reduction

in Medicaid and other government expenditures, increasing graduation rates would
yield large increases in tax revenue. We used the tax simulation model (TAXSIM)
of the National Bureau of Economic Research to model the income tax impacts attributable to the population of working age dropouts in the U.S. 6
4 This estimate is appropriate to illustrate the earnings impact of educational attainment, but
it does not consider the equilibrium effects that would occur in the labor market if all dropouts
actually did graduatethat is, the ways in which the larger economy, employment, and wage
rates might be affected in response to such a increase in high school graduation rates.
6 We had to make some simplifying assumptions in calculating tax liabilities. Most important,
because we had no data on spousal income for the population of high school dropout taxpayers,
we treated all taxpayers as if they were filing as single taxpayers, We calculated tax liabilities
for taxpayers with zero to three dependent child exemptions and weighted the number of returns according to the percentage of dropouts with and without dependent children, as gleaned
from the CPS. Because there are a number of additional tax deductions, exemptions or credits
that can apply to taxpayers age 65 and older, we limited our tax analysis to residents under
the age of 65. The complexities of individual tax filings could not be captured when trying to
model more than 20 million tax returns of working-age dropouts, but our results provide a rea-
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In combination, the lower earnings and decreased tax payments of high school
dropouts, along with the higher cost of tax credits attributable to dropouts, results
in an income tax cost of $31 billion attributable to dropouts (Table 3). The secondary
revenue impacts that would result from increased earnings and expenditures from
a reduction or elimination of dropouts are not documented here but would yield additional federal and state revenues equal to or greater than those highlighted here.
Table 3: Estimated Income Tax Cost of Dropouts 7
Estimated 2007 Tax Liability
Wage &
Salary Income
0 Child
1 Child
2 Children
3 or More
Children
HS Grads
$22,682
$1,730
$358
$2,990
$4,027
Dropouts
$13,078
$446
$2,686
$4,845
$4,845
Difference
$1,284
$2,328
$1,855
$818
12,141,799
3,455,105
2,940,309
2,447,059
20,201,421
$15,590,069,916
$8,043,484,440
$5,454,273,195
$2,001,694,262
Grand Total:
$31,089,521,813
Dropouts
(Age 2064)
7 Earnings
data from the Current Population Survey. Tax liabilities were estimated using the National Bureau
of Economic Research TAXSIM model.
What Can be Done to Increase Graduation Rates

There are a number of initiatives that show promise for increasing high school
graduation rates and innovations are being tested on a small scale all the time.
There is no single best solution and I believe that innovation and new initiatives
should be encouraged. Based on the numbers I have discussed here, even modest
increases in graduation rates should yield fiscal benefits capable of supporting additional efforts to reduce dropouts by State and local governments while significantly
reducing the number of uninsured in the process. As importantly, these benefits will
be realized without risk of unintended consequences to our health care system.
I believe that the educational system in this country contains far too much segregation of students and families according to income and educational attainment
of parents. This segregation has profound impacts on the differential educational opportunities available to children. No matter how much we have increased funding,
education that maintains a tacit separate but equal structure to educational opportunities seems to have succeeded only in separation while failing at equality. The
result is that the long-term economic opportunities for many are greatly limited. Restricting educational opportunities to assigned schools maintains the inherent segregation in education along income and parental education lines and will assure the
continuation of segregation in our education system and likely maintain existing differences in educational opportunity.
That said, regardless of what policies to increase graduation rates are instituted,
it is most important to acknowledge the critical role that increasing educational attainment can play in reducing the percentage of our population that lacks health
insurance coverage, at the same time increasing graduation rates will yield additional public benefits and reduce public costs.
Increasing graduation rates is a forward looking policy prescription. We cannot
retroactively increase graduation rates for the 20 million working-age dropouts in
our population but by increasing high school completion rates we can increase future revenues and lower future public expenditures in a way that allows for more
attention and resources to be directed at those for whom the future is now and the
past cannot be changed.
Conclusion
Some of the most effective means of reducing the number of uninsured individuals
in this country do not involve fundamental changes to our health care system. Other
than as a citizen I have no stake in maintaining any aspect of our current system
of health care or health insurance but even a cursory review of the data on health
insurance coverage suggests that some of the major factors contributing to the lack
sonable estimate that is likely to be within a few percentage points of the true income-tax cost
associated with the earnings differential between high school graduates and dropouts
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of health insurance are not simply the result of fundamental flaws in our health
care system. To maximize public benefits while addressing declines in health insurance we ought to look for opportunities to provide more than insurance to the individuals who lack coverage.
Increasing high school graduation rates is one way to dramatically reduce the future incidence of individuals without health insurance, at the same time it will increase economic opportunities for individuals, increase public benefits and reduce
public costs.
Chairman MCDERMOTT. Thank you very much, Mr. Gottlob.

Perhaps youre a good segue into what my real question to this
panel is. You say lets increase the number of people who finish
high school. That will knock off x millions of people off the 47
million, or whatever the number is, that are uninsured. We really,
Im sure, dont know what the number is, but lets say, some 4.7
million. Then I look at Ms. Collins report here, Dr. Collins. They
say, well lets allow States to extend eligibility to Medicaid; and let
17 States redefine the age at which a young adult is no longer dependent, and they want older people to buy into Medicare and the
2-year waiting period and other SSI. To me, what Im hearing is
bandaids here.
Now, how many, if you took all those people, and Ill let you, Dr.
Collins, be the one to start. If you took all the people that you suggested we do, all the things you suggested we do, these bandaids
of these various parts of the system, how many people would we
take out of the 47 million who are uninsured?
Ms. COLLINS. How many people? I mean, I think the State
Childrens Health Insurance Program and the Medicaid program
are good examples of what happens when you just cover certain
parts of the population. You have a lot of people that drop off, because they dont re-enroll, that dont know that theyre eligible. So,
you really do need more of a universal system where people are
automatically enrolled through the tax system, for example. So, I
think the bandaids that we suggest are in absence of a more universal system, but I think the most efficient approach would be to
put everybody into the system. But I think the bandaid approach
is an alternative to build in that direction.
Chairman MCDERMOTT. I mean, if youre taking these people
and trying to cover the ones, you would keep the Medicaid system
separate from Medicare and just keep adding into each of the systems. How do you look at that? Is that the best way to do it?
Ms. COLLINS. I think the best way to do it is to cover everybody. I think if were thinking in terms for budgetary reasons, for
political reasons of building toward universal coverage, you could
start on these public insurance programs that work so well: the
Medicaid program, the Medicare program, the State Childrens
Health Insurance Program. Bring in the employer system as a
piece of this and build toward universal coverage over time.
Alternatively, we could do what others have proposed and expand the Medicare Program to everybody. I think the analysis that
the Commonwealth Fund has done has really shown that this is
the most efficient way in terms of saving overall health care costs,
insuring everyone so they dont lose coverage, that they have stable
coverage over their lifetime. But if youre looking toward building
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toward universal coverage at an incremental way that moves toward universal coverage, these are suggestions for that.
Chairman MCDERMOTT. In a public policy way, which one of
these would you do first?
Ms. COLLINS. You know, its so hard to say, because people are
so much in need in each of these groups. Young adults, an example
that Ms. Johnson gave about her life, is just extraordinary to listen
to. So, how can you decide which vulnerable group you ensure first.
Chairman MCDERMOTT. You dont think a 59-year-old auto
worker who retires and is in the retiree program is more important
than Ms. Johnson?
Ms. COLLINS. I think its hard to decide that. I think thats why
it would be more equitable to ensure everyone at the same time.
Mr. POLLACK Mr. Chairman, I think theres a general misunderstanding about the scope of public coverage, and Im not suggesting that everything be achieved through public coverage
changes. There is going to have to be some accommodation of both
public and private sector coverage.
I want to go over, however, what I think is a mythology about
public coverage. Theres an assumption that anyone whos poor is
going to have health care coverage, because we have a safety net,
such as Medicaid. Its just a fallacious assumption. We treat people
very differently based on their family relationship status. Take
three different groups as an illustration: children, the parents of
those children, and non-parental adults.
For children, we cover children in virtually every state, if their
family incomes are below 200 percent of the Federal poverty level.
At least theyre eligible. They may not be enrolled, but they are eligible for coverage in virtually every State, if they are in families
with incomes below 200 percent of povertyroughly $34,000 in income for a family of three, $41,000 for a family of four. Some States
go higher, and, obviously, there is a debate about how high it
should go.
With respect to parents, the median income eligibility standard
for the safety net Medicaid program is today 69 percent of the Federal poverty level. It is one-third of what it is for children.
For non-parental adults, such as the person you were talking
about if that person is single or doesnt have any dependent children right now, the situation is most problematical. In 43 States,
you literally can be penniless and you are ineligible for public coverage. So for a lot of people and families that are poor and need
help and need a safety net, they currently do not have alternatives,
because theyre ineligible for public coverage.
Then you get to the question of enrolling people who are eligible,
but you have today a system of eligibility, which actually has its
roots, believe it or not, in the 16th Century Elizabethan poor laws
of England where they said in order to get welfare you had to be
poor and to also meet some deserving category.
We have that today with respect to Medicaid. As a result, people
who are poor, if they dont fit one of these deserving categories, are
ineligible for safety net coverage. That should be changed. That
should be a high priority.
Ms. JOHNSON. I just want to say this on behalf of youth and
foster care, and this is me just pouring out my heart. Your health
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to become a success is very important to become a successful adult;
and, there are already so many negative statistics that are placed
on youth and foster care.
When I was traveling over the summer as a foster club all star,
I learned that when they did research last year that 27 percent of
youth in foster care end up incarcerated. 52 percent end up homeless; 35 percent end up pregnant. Me being a former foster youth,
knowing why, I committed. A lot of people wouldnt believe it, but
I got in a lot of trouble. I wouldnt call it criminal, because I never
was arrested. But part of the reason was because I didnt get to
seek the counseling that I needed for the traumatic experiences
that I experienced.
So, as not giving myself an excuse, but as an outlet, I did things
that were horrific, or things that werent great. But I had no outlet
and I was told I couldnt go see a counselor and I couldnt talk to
anyone, because you had to pay for it. I didnt have Medicaid, so
I couldnt pay for it. Even some of my peers now are getting pregnant, because when they get pregnant, its almost like putting
themselves back into the system, because they know that even
after they have their baby for a certain amount of time, they can
still have medical coverage or medical insurance. Thats one of the
things that they talk about that Ive witnessed them talk about
while being pregnant: Well, at least I have medical coverage. So,
my question to them was, okay. Youre pregnant now as a way for
you to still continue to keep medical coverage after you had this
child.
I feel like all the statistics that are already placed on my population are feeding into each other. Like, if I dont get the counseling
that I need for the stress disorder and everything else that I have,
I am liable to commit a crime. Because I am liable to drop out of
high school and if I am homeless and I am not in school, of course
I am not working. I am unemployed. So, there go all those negative
statistics back on my population again. I feel like for me, I was
very vulnerable.
Of course, I was taken away from my grandmother and put into
foster care. I was young at the time and I didnt have any choice.
I feel like now that Ive aged out of care, I am paying that price.
I feel like its not fair that I cant qualify for health care and I cant
say anything. Youth that do have their biological parents, they are
allowed to stay on their parents health care insurance until age
24, as long as theyre still in college. I feel like the State became
my parent, so shouldnt I be provided with the same equal benefits
as youth that have their biological parents?
Im not 24. Im 22, and I still cant get health care. Im still sick
to this day from the condition that I stated earlier, because it lingers on for so long as a result of me not having medical insurance.
You know if youre sick and it lasts so long, it starts to damage
other things. Thats why Im still sick to this day, because its a
long process of healing the condition that I have, because I waited
so long to get it treated, because I did not have medical insurance.
I was told, why dont you just be like regular people and go get
on insurance? Okay. Im a college student. Nobody is helping me.
I dont have any parents. I cant call home like most people and
say, Im sick, or I need this. I have to do it for myself, so do you
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honestly think I can afford to pay that high deductible? Ive tried,
because I dont want to be the one to bring myself back into the
system after I have already exited it.
So, I have tried other means. I work. So, I have tried to go to
the doctors office and pay the amount there is to pay, but I found
myself having to pay like $250 that I did not have just to go to the
doctor. So, I found myself doing what most people do, just dont get
it treated. Because the bills at the emergency room are just so expensive, and I know that I cannot afford them. So, I just allow this
illness to linger on, because I had no way to pay for it. I feel like
we are very deserving of this help, because we have been through
so much already and there is nobody there to help us once we age
out of care. There is nobody there.
Chairman MCDERMOTT. Thank you.
I am going to move to Mr. Herger. Ive gone way over my time.
So, Mr. Herger, you are open.
Mr. HERGER. Thank you, Mr. Chairman.
Chairman MCDERMOTT. We wont turn the clock on just yet.
Turn the clock off.
Mr. HERGER. I want to thank each of our witnesses this morning. Ms. Johnson, I particularly want to thank you.
All of us on this panel that are in this room are very much aware
of the percentages and what they are against someone in your position that grew up in your circumstances. To see you out there, even
though you are struggling, obviously you are by every standard definition, you are on your way to being a successful person. You really are right now, and I want to commend you for what youre doing.
I also want to commend you for being a role model. I commend you
for going out and being this all-star and talking to others and doing
what youre doing. I want to encourage you to continue on the path
you are and bringing this to our notice.
Its a big challenge we have, as each of you know. It is a big challenge. I think each and every one of you have brought up some
very important points47 million Americans without health care.
What do we do about it? There is a big move to perhaps, we said,
socialize it completely. Everybody has health care. I mean, this is
ideal, but in reality, we cant pay for what we currently have, as
we are aware.
Medicare is going broke now, faster than social security; and, so
how do we get to where all of us agree we need to be? But from
a practical standpoint in a nation that is in debt, how do we get
there and get there efficiently, and how do we have a system that
works? Weve seen socialized medicine around the world. We see
the Canadians. We see the long lines they wait in and how they
come down here. That, I dont think, is the answer. I dont have
the answer here, and Mr. Pollack I appreciate what you said, I
think that we have to have a combination of both the safety nets
that would help the individuals like Ms. Johnson and others who
dont have it, or the 59-year-old person that the Chairman was
talking about.
Yet the private sector can help pay for it where we can. One of
the ways to do that, I think, is a problem that you pointed out, Mr.
Gottlob, is if someone doesnt have the education. You are in the
process of getting that education Ms. Johnson, and the road you
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are going down, eventually you will get it. Probably most of us on
this Committee, if not every one of us, has been somewhat where
you are going through school, being broke, struggling, working
hard, investing today for getting something tomorrow, the American dream type of thing that you are in the process of living right
now.
You will be getting the dividends down the line and giving an example how to do that. I think the real problem, one of the major
problems, is getting our young people through high school. Because
if you dont get through high school, then you are thrown into the
system that you were describing where there is virtually no hope.
People wont hire you. Its tough enough to be hired if you have a
high school education, let alone not a high school education at all.
If we are looking at first steps or some of the most important first
steps, I believe this idea of at least getting our young people, and
those who do not have the blessing that have the parentsit
sounds like you have a grandmotherhow do we help you get
through high school and how do we make sure that you have the
health care you need in the process?
Mr. Gottlob, in your studies, have you seen any programs or suggestions on how we can ensure that others like Ms. Johnson that
are in that position can make it through the first step of high
school, and then maybe college, but for sure at least high school?
Mr. GOTTLOB. I think that there are a number of programs that
are proving their worth in reducing the dropout problem. I categorize, basically, two broad categories. Theres the very big kind
of reforms, the broad categorical reforms, which include things like
early intervention in young peoples lives, even at the preschool
age. Those programs take a long time to evaluate and study. We
really havent gotten to the point yet that, you know, theres definitive studies, but I think those are very encouraging.
Theres other activities providing different kinds of alternative
education charter schools that open up alternative ways for people
to obtain an education who might not fit into the very narrow
structure of many of our public schools. When you look at the population of dropouts, however, one of the things that you see is that
there are many reasons why people drop out. Theres a tremendous
variety of reasons, so I think that theres a lot of tactical programs
that are proving very successful.
There are things like, one of the things that is very much associated with dropouts is lack of success in the ninth grade, the very
first year of high school. A lot of school districts are instituting
what are called academies that are basically smaller schools within
a larger school environment, makes it feel like a smaller school.
Students within that ninth grade are allowed to choose which of
the academies. It functions in a way that makes kids successful in
that initial first year. Thats proven very successful.
You know, vocational education has gotten a bad name in a lot
of ways. Everybody is striving for a higher education and beyond,
and thats a noble goal. So vocational education has seen a decline,
and one of the things that thats done is I think it has pushed a
lot of what I like to call kids at the margin out of our schools who
in my State, where a lot of our population of dropouts are young
males who are marginally attached to their school, who because of
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low unemployment rates in my State, see an $8 an hour job as a
great opportunity to leave school. Well, $8 at age 16 doesnt look
so good when youre 30 and youve got children.
Those students at the margin, if they had the opportunity to
maintain some attachment to the labor force within a program of
vocational education that allowed them to learn some trades, some
occupations, along with a core academic curriculum I think has
proven successful in the limited instances where its been instituted.
Those are just a couple of examples. There are many. The key
message is that I think that the ways in which we will accomplish
this goal will be as varied as the characteristics of the population
that is dropping out, but there are real opportunities.
Chairman MCDERMOTT. Thank you. Mr. Lewis will inquire.
Mr. LEWIS. Thank you very much, Mr. Chairman.
Again, I want to thank each of you for being here. Ms. Johnson,
thank you for your testimony. Thank you for pouring out your
heart and telling your story. I dont understand when someone discovers a health condition and you dont have the money; how do
you pay for seeing a doctor? What was it like? What do you get the
resources from? Or you just didnt go and see a doctor?
Ms. JOHNSON. Actually, I just go give you a brief note of how
it happened. Like I said, when I first realized that I was sick was
my sophomore year of college. You know, it was something that
was so simple when I finally figured out what it was. If I had been
going to get the yearly physical exams, then they would have been
able to detect it a lot earlier.
What made it stressful was actually figuring out who to reach
out to and tell them what was going on with me, because like I
said, I didnt have an adult or somebody in my life at that time I
could call it, Hey look, this is whats wrong with me. What do I
do? Once I reached out to the Georgia Department of Human Resources, there was some ladies that worked with me. Once I
reached out to them and told them what was going on, Okay,
they said, the next step is to figure out how we can get you taken
care of.
So, Grady is a well-known hospital in Atlanta. We contacted
Grady and they told me that they could put me on a waiting list
to be seen. I was like, okay, so I did sign up for the waiting list
to receive the appointment. But I never got it, I guess because of
them just having so many people on the waiting list.
I contacted some local OBGYN clinics right there in the county
which I lived in, and the payment just to come in for that one day
was so much. Thats where I got the estimate of around $250, because thats how much they wanted just for that 1 day. At the time
I was in between transition in school, so I wasnt working as much.
So, I didnt have the money.
So, the next step was to try to find a local health department.
The one in Clayton County, which is where I live now, where Im
going to school at Clayton State University, was the one where I
would literally have to get up early in the morning at like six.
Someone from the Georgia Department of Human Resources would
come and pick me up, because I didnt have a car at the time, and
take me to that facility. There were already, believe it or not, they
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didnt believe it when I told them that there were already people
there waiting at seven, that early in the morning, so they took me
themselves so that they could see that that was the issue.
We got there and there were literally already a lot of people
waiting to get into this particular health department. I went three
times, and all three times I was not able to be seen. They would
tell me that they didnt have enough nurses there that day for
what I needed. They couldnt do it. So I was turned away then.
So, then I realized that when I was getting my associates degree,
there was a health department there. It was an hour and a half
away from which I lived. So, I finally called them. They were like,
Ms. Johnson, we know you dont live in our county, but just go
ahead and come in. If youre that sick, just go ahead and come in.
When I came in, it was the most embarrassing experience of my
life, because the doctor looked at it. She was like, How could a
person get this sick? How could you let your condition wait this
long until where you are this sick?
That was the most embarrassing day of my life. They gave me
almost every antibiotic you could think of, and I still had the problem. I didnt know how to explain to this lady that I didnt have
health insurance and that I didnt know who to go to. Then I tried
to contact all the places around me, and nobody was helping me.
I didnt have the money, and finally the State of Georgia did pay
for me to go. But even they were still having problems with getting
me the medical attention. This was the Georgia defects that I
reached out to that even they could testify to was that it was still
difficult getting me treated without their health care insurance.
I tried to even reapply to see if I was still qualified for Medicaid,
and I couldnt. I even tried to reapply at 19, and they said I was
still ineligible. Right now, the Jim Casey Youth Opportunity Initiative Program called the Metro Atlanta Youth Opportunity Initiative, they have a door opener called Kaiser Permanente where you
can pay $20 a month for full coverage. When I first came to the
Atlanta Metro area, they had a freeze on the program because they
had already accepted so many people into the program, so at that
time I could not get in. But they have now reopened Kaiser
Permanente. They offer backup, and Im now in the process of applying for that.
The only thing is since Ive had the reoccurring condition for so
long, thats one of their requirements, that you not have a condition
that youve already had long-term before enrolling. So, then, there
I go again, back into where I started from.
Mr. LEWIS. Well, thank you, Ms. Johnson. My time is running
out. Before you leave, we should get your number to one of my staff
persons and well try to do what we can in Atlanta, and Clayton
County ought to be of help to assist you.
Mr. Chairman, could I just ask another question?
Chairman MCDERMOTT. Yes.
Mr. LEWIS. Not of Ms. Johnson, but thank you so much.
Mr. Pollack, thank you so much for this unbelievable data that
you provided in your testimony and also in your report. It is my
hope that maybe in 2009, or someplace down the road, that you
would come back and testify again, and we could maybe get the
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ball rolling toward some comprehensive health for all of our citizens.
I happen to believe that health care is a right and not a privilege. It doesnt matter that you live in this country; you should
have it. I would like for you to respond to some of the generalization that Mr. Gottlob made concerning Hispanic and African-American that happen to be, maybe, uninsured. I didnt quite understand where he was going. Maybe he can explain it. But if you
could, deal with it?
Mr. POLLACK Let me refer to some numbers that are in the report that you just referred to. I said to you earlier in my testimony
that, over the course of the last 2 years, 89.6 million people were
uninsured at some point in that 2-year period. Now, all of these
people are under 65 years of age, because if you are 65 years of
age or older, you are eligible for Medicare. This constitutes a little
more than one out of three non-elderly people, its 34.7 percent of
people under 65 years of age.
But getting to your question about the effect in terms of racial
disparities, we broke this down from the Census Bureau data in
terms of non-Hispanic whites, non-Hispanic blacks, and Hispanics.
The percentages Im going to give you are all percentages for people
under 65 years of age. For non-Hispanic whites, 26 percent of the
population under 65 years of age, a little more than one out of
every four people, were uninsured at some point over the prior 2
years. Among non-Hispanic blacks, the percentage of people under
65 years of age who experienced a lack or loss of health insurance
was 44.5 percent. Among Hispanics, the percentage was 60.7 percent. In other words, more than three out of five Hispanics were
uninsured at some point over the last 2 years.
So, even though as my colleague on this panel indicated, about
half the uninsured are white, non-Hispanics, the likelihood of being
uninsured is very different, based on race and ethnicity.
Mr. LEWIS. Do you subscribe to the idea of the concept that everybody, every person, every human being that lives in America
should have health care?
Mr. GOTTLOB. I certainly think everybody should be able to
avail themselves of the same health care opportunities that are
available to everyone else. Representative Lewis, I just want to
make it clear that when I cited those statistics, what I was trying
to do, and I mentioned this in follow-up, is to note that one of the
things that characterizes those numbers is a high percentage of demographic groups that have very, very low, or lower rates of high
school graduationsHispanic population, African-American population. So, I was trying to draw the connection between insurance
coverage and graduation.
So, that was the purpose. Certainly not, and when I talk immigration I certainly didnt want to, and I mention this, fan the
flames of the immigration debate. Thats not the purpose. Theres
tremendous heterogeneity in the data, but there is one kind of common theme, and one of those big themes is a lack of educational
attainment. That is a very big predictor.
Mr. LEWIS. Isnt it in the best interest of the health of all of our
citizens, of all the people that live in this country, that everybody
should have health care?
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Mr. GOTTLOB. Absolutely. Absolutely, and one of the reasons
why I stress graduation rates so much is that you can provide everyone with health coverage. If you do that, it still wont put food
on the table. It still wont pay the rent.
Mr. LEWIS. But a lot of the people without health care, theyre
working people. They work every single day. Every single day they
get up, they go to work, but they cannot afford health care.
Mr. GOTTLOB. Absolutely.
Mr. LEWIS. The working poor.
Mr. GOTTLOB. By increasing the educational attainment, they
will be better positioned to meet those other needs in addition to
health care. Thats really the point, that there are tremendous
synergies between educational attainment, coverage of health care,
and the resources, assets that individuals and families have, and
the resources that ultimately are available to this government to
address some of the issues in health care that arent solved by increasing educational attainment.
Mr. LEWIS. Thank you, Mr. Chairman.
Chairman MCDERMOTT. Yes, Mr. Camp.
Mr. CAMP. Well, thank you. I appreciate all the witnesses for
being here.
As many others have said, much of what we are talking about
is not in the jurisdiction of this Subcommittee, or, frankly, in the
jurisdiction of the Committee on Ways and Means. If we were the
Commerce Committee, we might be able to do something about
some of these issues.
But I do think that in the CRS report that I had introduced into
the record there are demographic characteristics in terms of health
coverage by type. 35.6 percent of the uninsured are Hispanic, according to CRS, the Congressional Research Service; 21.7 percent
are African-American; 12.5 percent, white. So, this does disproportionately affect certain populations in the United States. I think
having that information before the Subcommittee can only be helpful in terms of trying to find solutions.
But, as we talk about this issue, it seems to me that if we were
to adopt many of the ideas being suggested by several witnesses to
expand Medicaid, expand SCHIP, we would still not impact the
high school dropout rate. That number would still stay the same,
would it not Mr. Gottlob?
Mr. GOTTLOB. Thats correct. There would not likely be a
change. There isnt any research to my knowledge that indicates a
relationship between health care coverage providing provision of
health care coverage and a reverse in terms of increasing.
Mr. CAMP. So, wed still have elevated rates of poverty and unemployment and far less lifetime annual earnings than individuals
who have more education. Is that correct?
Mr. GOTTLOB. There clearly are benefits to families who are not
insured to receiving when they receive insurance. There can be reduced expenditures on their part, but it doesnt fundamentally for
the most part change their earning capacity.
So, their situation, whether theyre skilled or unskilled, their
educational attainment isnt fundamentally changed. Now, are
there instances where it could be? Yes. But in the aggregate, it
doesnt fundamentally change the resources, intellectual and other-
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wise that are available to individuals and families to make their
lives better.
Mr. CAMP. You mentioned on page 7 of your testimony, there
are a number of initiatives that show promise for increasing high
school graduation rates.
Could you just list several of those initiatives for us?
Mr. GOTTLOB. Yeah, I think. You know, alternative education
at the high school level, kids who are at risk of dropping out, there
are alternative schools that can help graduation rates. I mentioned
the problem, I think. One of our big problems in the educational
system is the segregation of our public education according to income and educational attainment of the parents. Mixing and breaking up some of that segregation I think will have profound impacts
on educational quality and ultimately graduation rates. There are
some tactical measures that I have talked about in terms of specific
district-level kinds of initiatives that I think show promise.
There is a laboratory of school districts out there, and States that
are doing innovative things and improving, in my State I know, improving graduation rates. When they do that they provide additional benefits to all of us, and that is the point of my testimony.
Mr. POLLACK Mr. Camp, I share my colleagues enthusiasm
about equal educational opportunities.
Mr. CAMP. By the way, that is not in the jurisdiction of this
Committee either. If we were on Education and Labor, we could
talk about that issue.
Mr. POLLACK I understand that. But I must take issue with the
notion that the provision of health care is largely irrelevant to educational attainment. Thats just false.
If a child doesnt get a check-up and that child has a vision problem, or that child doesnt get a check-up and that child has a hearing problem, those things are not going to get corrected. How is
that child going to get a decent education?
If a child cant get check-ups and get basic health care provided
to them and theyre absent from school, how does that not affect
their educational attainment? There is a real correlation between
the provision of health care and educational attainment and general development.
Mr. CAMP. Thank you for that comment.
My time is about to expire, but in your testimony you mentioned
that coverage of children was almost universal in this country.
Mr. POLLACK No. No, wait a minute.
Mr. CAMP. It is.
Mr. POLLACK No.
Mr. CAMP. Its my time, sir, and thank you for your comment.
I do have another question I want to ask Dr. Collins.
You had mentioned expanding Medicare so adults 55 to 64 could
buy into it. That is in the authority of this Committee. How much
would something like that cost and would premiums cover the full
cost to taxpayers for all people covered? Would those premiums be
means tested in some way? If you could describe in greater detail
that idea, that thought.
Ms. COLLINS. Okay. Just one additional comment on this. The
IOM has estimated that people lose between $65 Billion and $130
Billion each year collectively, because they dont have health insur-
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ance coverage. That includes lost productivity, earnings, and lost
educational achievement.
Mr. CAMP. Missing work and missing pay.
Ms. COLLINS. Well, human capital development, educational attainment was one of the things that the IOM identified. So, there
really are some costs.
But anyway, on the issue of the Medicare buy-in, the Commonwealth Fund did an analysis of a bill that was introduced by Congressman Stark about the Medicare buy-in, and we looked at the
details of that plan with the Lewin Group. I would have to go back
and look at the data and get back to you. But I believe we were
thinking it looked like it was on the order of $26.9 billion a year
in Federal costs, but Id have to look into that.
Mr. CAMP. I realize I maybe caught you off-guard on that, but
if you could supply that later, I certainly would appreciate it.
Ms. COLLINS. Sure, happy to do that. I think that also we
would want to think about what that benefit package would look
like. Would we want to make it look more like the Federal employees health benefits plan, for example, and also to make it affordable, to make the premiums affordable for lower income, older
adults who really do comprise the majority of uninsured older
adults as they do the majority of people who are uninsured in the
United States?
Mr. CAMP. All right. Thank you.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Thank you. Mr. Davis?
Mr. DAVIS. Thank you, Mr. Chairman.
All of us are under tight time constraints, because there are
votes.
Mr. Pollack, Mr. Camp did not seem to be terribly understood on
the answer to his questions. I want to give you a chance to answer
it now.
You were talking about the number of uninsured children that
continue in the United States. Would you just elaborate what those
numbers are?
Mr. POLLACK Well, sure. There are approximately nine million
children in the country who are uninsured, and of that number approximately two-thirds, about six million, are actually eligible
under the current eligibility standards established by the States for
SCHIP.
Mr. DAVIS. That would be typically 200 percent of poverty.
Mr. POLLACK Thats right. Thats right.
Mr. DAVIS. Which would be, for example, in my State that
would be roughly $41,000 for a family of four.
Mr. POLLACK Correct. $34,000 for a family of three. Thats
right. The overwhelming majority of States are at approximately
that income eligibility level.
Mr. DAVIS. So, just to make sure everyone in the room whos interested gets that point, two-thirds of the uninsured are eligible for
the SCHIP program. They just simply havent had the opportunity
or the informational resources to take advantage of it.
Mr. POLLACK Or the States have not received sufficient funds
to enroll them. Were just seeing whats happening, for example, in
California. California is telling us that if we essentially keep the
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same funding level for the SCHIP program as we had in the previous year, theyre going to cut-back children who are currently in
the program.
Mr. DAVIS. I would submit that thats the case in Alabama. Its
the case, I think, in the States of virtually every single member of
this Committee.
I move to my second observation. One of the problems I think
that we have, Mr. Pollack, and I think you would agree with me
on this, as we try to fashion the political will, because frankly it
is not that we are not smart enough to figure out how to address
the health care problems, there are a range of things that we can
do.
Dr. Collins pointed out some of them. You pointed out a number
of them. Mr. Gottlob pointed out a number of them. Ms. Johnson
pointed out a number of them. There are a range of things that we
can do. This is not beyond our intellectual capacity. Its not too big
a problem for us to get our hands around. This is not rocket
science. The problem has, frankly, been one of political will.
One of the reasons I think we struggle to garner the political will
is because of some of the misinformation that lurks on the other
side of this argument. I am troubled when I hear the President of
the United States suggest that theres a significant portion of people who are affluent, who have resources, who just elect to be free
riders, who elect to essentially be uninsured and let the emergency
room take care of them. Theres some whiff of that in his rhetoric,
even when he talks about the SCHIP program.
When I listen carefully to what he says, I hear something in his
rhetoric that suggests that, well, the people who really need it get
it. Theres a group of folks who dont really need it that the liberal
democrats are now trying to push into the program.
Do you hear something of that in his rhetoric, Mr. Pollack?
Mr. POLLACK Well, of course. The President has said everyone
gets health care. You know, of course, they can go to an emergency
room. Well, come to the emergency room and take a look at the
care that people receive, people having to wait in line. This is the
most expensive form of care.
So, theres a huge disparity in terms of the care people get when
theyre insured versus when theyre uninsured. I wish frankly that
the President would adhere to his own message that he gave in
Madison Square Garden in 2004 when he accepted the Republican
nomination for President. Then, he said, weve got millions of children who are eligible who are not currently enrolled. My administration is going to reach out to those folks and get them enrolled
in public coverage. Now unfortunately the President, who has had
the opportunity to do this, has turned his shoulder.
Mr. DAVIS. Just to add to that point, the former Mayor of New
York, Mr. Giuliani, who I think has some interest in getting the
job himself, has made some misstatements Ive heard in debates.
He during one debate suggested there was a significant number
of people who just dont want to get health insurance and that
theyre basically just careless individuals. I thought he overstated
that point.
The last observation Ill make, Mr. Pollack, is thank you for making the observation that the scope of public coverage is weaker
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than most Americans believe. In my State of Alabama, the only
way you are eligible for Medicaid is if you have dependency with
133 percent of poverty. You can be, as you put it, stone, cold broke.
You can be penniless and be a 21-year-old woman who is working
at a convenience store who doesnt have a dependent, and you are
ineligible for Medicaid in the State of Alabama and a number of
other States.
For some reason, theres a myth that some on the right take advantage of that. Well, theres some program out there that will
reach out and act as a safety net for many of the poor and the uninsured. The actual scope of Medicaid coverage is far weaker than
many people believe it to be. We need to, I think, begin to look at
underwriting a much stronger floor for the Medicaid program.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Weve got about 5 minutes left, and
Ms. Berkley, if you could maybe lean just a little bit for the gentleman to your right.
Ms. BERKLEY. Okay. Nudge me, if I go on too long.
Im sorry I wasnt here at the beginning. I had to testify in front
of another Committee, but what I did here I thought was profoundly moving. Ms. Johnson, one thing that you said is so right.
If you are a ward of the State, when you age-out of foster care,
the least the State could do is provide health insurance for you.
When my kids were 18 they were no sooner ready to age-out of my
home than the man on the moon. If they didnt have a home to go
to and parents to take care of them, Id hate to think where theyd
be right now. so I want to applaud you for everything you have
done. But thats what we should be doing, making sure that we
take care of that gap in between aging out and being 24 years old.
The other thing, and I want to make sure that I do get this in,
Mr. Chairman, for high growth areas like my State. Everything
weve discussed including SSI, ineligibility, and waiting times, are
exacerbated because we have a lack of staff, a lack of ability to get
this done, and far too many people needing the services.
So, for the two and a half years average, I guarantee in my community and my district, people are waiting three and a half years,
because of the backlog. Let me mention what is going on very
quickly, and then Ill hand it over to Mr. Van Hollen.
I visit my schools in the underprivileged, if thats the right word,
areas in Las Vegas, which is a pretty affluent place, and weve got
high employment rates. But Ive got a huge dropout rate. Ill tell
you this. When these kids go to school in these disadvantaged
areas, they come with no breakfast. Theyve got a mouthful of cavities. They are sick as dogs. They should be home, but theres nobody home to take care of them because their parents are working
at jobs that dont provide health coverage. Half of them come from
non-English speaking families, and quite frankly, as a parent I
dont want my kid sitting next to that child. That child needs to
have care, and thats why that SCHIP program is so terribly important.
Its no surprise to me that we have a high dropout rate, because
once you go through that in your initial years and you never catch
on, by the time you are in the ninth grade, you want out. As soon
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as you turn 16, you are going to find an alternative way of spending your time, because school isnt it.
You are absolutely right, Mr. Gottlob, thats a huge problem for
this country, because we cant afford in the 21st century to leave
anybody behind. But I think it starts early, much earlier than high
school. It starts not only with nutritious meals and a stable family
environment, if we could make that happen, but good quality
health care to take care of these kids.
Chairman MCDERMOTT. Mr. Van Hollen?
Mr. VAN HOLLEN. Thank you, Mr. Chairman.
Chairman MCDERMOTT. You can take this as far as you want.
Mr. VAN HOLLEN. Thank you, Mr. Chairman.
I will be brief, given the bells that just went off. I just want to
thank all the witnesses for being here. As our colleague Artur
Davis said, providing health coverage in the United States, universal comprehensive health coverage, is a matter of mustering the
political will to do it. I hope that after the next presidential elections well be able to come up with a plan as a country that will
address all of our people.
In the meantime until we get to that point, we have to spend our
time trying to fill the gaps, and thats obviously what we are focused on today. I want to float one proposal that we have put out
there in the form of legislation. Mr. Pollack, I want to thank you
and Families USA for supporting it. I bring it to the attention,
briefly, of others on the Committee and the panel, if you are not.
Under the Medicaid program, states can ask for a waiver to include non-Medicaid individuals within a prescription drug program.
In the State of Maryland under a former Republican Governor,
former member of this body, Mr. Erlich, and a Democratic legislature, sought a waiver from the Administration to say the State of
Maryland would like to include individuals up to 300 percent of the
Federal poverty level in their bargaining pool when they bargain
for prescription drugs under the Medicaid program. That would
have the benefit, number one, of covering a lot more people, up to
300 percent of poverty, which is where we are talking about the
SCHIPS program being right now. It would cover the kind of people Mr. Davis was talking about, the woman who worked at the
convenience store who is not eligible for Medicaid and is struggling
to pay the high costs of lots of health care, including prescription
drugs.
It wouldnt cost the Federal Government a dime, and youd cover
a lot more people. I wondered if you could just comment on it, Mr.
Pollack, and if others are familiar with this particular gap filler.
Chairman MCDERMOTT. One minute to vote.
Go ahead.
Mr. POLLACK As you correctly indicated, we support the legislation. Maine has also tried to do something very similar. I think it
would help both those currently on Medicaid and those not on Medicaid. It would create a larger bargaining pool, and, as a result, the
State would be in a stronger position to bargain for cheaper prices.
So, I think it would be good, not just for current Medicaid beneficiaries, but the particular target of the legislation: those who are
not eligible, and who really need help. They could get help. So, we
think its a very constructive proposal.
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Chairman MCDERMOTT. Thank you very much. Thank all the

members of the panel, particularly Ms. Johnson for coming and
doing this. But all of you, we stand adjourned.
[Whereupon, at 11:32 a.m., the hearing was adjourned.]
[Questions for the Record follow:]
The Honorable Jim McDermott
Chairman
Subcommittee on Income Security and Family Support
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Chairman McDermott:
I am writing in response to your request for additional information related to the
testimony I provided before your Subcommittee on November 14 during the hearing,
The Impact of Gaps in Health Coverage on Income Security. Once again, I wanted
to thank you for the opportunity to provide the Committee with information and recommendations regarding promising policy solutions to address the financial problems children and families face as they navigate our health care system.
As President of First Focus, a bipartisan advocacy organization committed to
making children and their families a priority in federal policy and budget decisions,
I am heartened by your leadership on this issue, and would like to thank you and
mMembers of the Subcommittee for bringing the important voice of children to the
health care discussion.
Along with your questions, I am providing below the additional information you
requested in your letter of November 28th.
1. States currently have the option of extending Medicaid coverage to
former foster children up to age 21. Based on Ms. Johnsons testimony, this
would be of great help to former foster youth who transition from care into
adulthood. How many States are currently extending Medicaid coverage to
former foster youth? What more can Congress do to help these vulnerable
adolescents receive coverage?
In 2005, over 24,000 teens left foster care at the age of 18. The range of services
and supports available to children who age out of the foster care system varies considerably from State to State. Sadly, most teens aging out of care receive minimal
services, and feel abandoned at a time when they need a great deal of guidance and
support.
The outlook for these kids is fairly grim. One in four will be incarcerated within
the first 2 years after leaving the system, and over one-fifth will become homeless
at some point. Only 58 percent will obtain a high school degree at age 19compared
to 87 percent of non-foster kids. These teens are also more likely to experience serious mental health problems and to be involved in the juvenile justice system. In
fact, in a recent study of youth aging out of the Illinois foster care system, caseworkers identified one-third of these youth as having one or more significant mental
health, medical, prenatal, substance abuse or developmental needs. Other studies
have similarly found that large numbers of youth aging out of care have diagnosable
mental health disorders. For instance, a recent study by Casey Family Programs
found that 54 percent of youth have a mental health diagnosis after leaving care.
Two key pieces of legislation, the Foster Care Independence Act 1999 (P.L. 106
169) and the Deficit Reduction Act of 2005 (P.L. 109171) have created a critical
opportunities for States to extend Medicaid coverage for youth who have aged out
of the foster care system.
The Chafee option, enacted through P.L. 106169, allows States to extend Medicaid coverage to former foster children ages 18 to 21, but not enough States are
doing so. A 2007 report by the America Public Human Services Association (APHSA)
found that since the enactment of the Foster Care Independence Act, 17 States (CA,
NV, UT, AZ, WY, SD, KS, OK, TX, IA, IN, MS, FL, SC, NJ, RI, MA) have moved
to extend their Medicaid programs using this provision to provide care for youth
aging out. In addition, five States (NM, MO, WI, NC, MD) are planning to extend
their Medicaid coverage using the Chafee option. The report also found that extending Medicaid coverage is in fact affordable using this option.
While 22 States are (or will soon) extend Medicaid eligibility to foster youth aging
out of care via the Chafee option, the remaining 28 States and the District of Columbia use several other programs to provide health coverage for youth aging out
of the foster care system. Several States have utilized section 1115 waivers under
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the Medicaid program to extend care, while others offer former foster youth the opportunity to qualify for additional benefits if they remain in care or in an education
setting.
For instance, in Alabama, a State plan category exists for foster youth who remain in State custody (up to age 21) in order to retain Medicaid eligibility. In AlaskaDenali KidCarea program designed to ensure that kids and teens in working
and non-working families have access to health insurance, is available to youth who
are 19 years old for a 12 month period (youth need to reapply for the program every
6 months). The State uses an 1115 waiver to extend the program. Alaska also provides Medicaid to Alaskan Native youth who age out of the foster care system
through the Native Health Care Program. In fact, the majority of Alaskas youth
in foster care are Alaskan Natives, and they have access to critical health care via
this program. In Idaho, foster youth are eligible to receive Medicaid until age 19
under title XIX whether they exit or stay in continued care. After age 19, they may
still qualify for Medicaid if they fall under the TANF, SSI or disability criteria.
Lastly, in Kentucky, youth who age out of foster care at 18 have a reduced benefit
medical card that is valid until their 19th birthday. These are just a few examples
of State efforts to piece together a health care system for youth aging out of care.
Unfortunately, there is considerable variability in access across programs, and restrictions on eligibility. In addition, a number of States only extend coverage for
youth to age 19.
We believe that Medicaid coverage should continue for all youth in foster care
until at least the age of 21. Congress can help by enacting legislation to do just that.
A number of proposals, including the Medicaid Foster Care Coverage Act (H.R.1376)
and the Foster Care Continuing Opportunities Act (S. 1521) expand eligibility for
Medicaid to foster care adolescents through age 21. We support such efforts to expand coverage to youth aging out of foster care and believe that federal policy is
essential to ensuring continuity in care for vulnerable adolescents.
2. I was interested in your testimony regarding the high rates of low income children who are eligible for Medicaid and SCHIP but are not currently enrolled in these programs. You noted in your prepared statement
that 62% of all uninsured children are eligible for, but not enrolled in, either Medicaid or SCHIP. You reference a study showing that 36% of those
children were in families with incomes below the poverty line and another
41% were in families with incomes of 100%200% of the federal poverty line.
Obviously, we have some work to do. While we are not here today to discuss SCHIP reauthorization, I would be interested in your thoughts on why
the SCHIP bill offers a greater opportunity to enroll the poorest children
first?
Over the last decade, SCHIP has amassed an impressive record of success in providing cost-effective health insurance coverage for childrenincreasing the number
of children enrolled in the program from 660,000 in 1998 to 6.6 million in 2006. At
a time when the numbers of uninsured adults has been on the rise, SCHIP has reduced the number of uninsured children in our Nation by one-third.
Unfortunately, as I noted in my testimony, a large portion of those children who
are eligible for Medicaid or SCHIP remain uninsured. Both of the Childrens Health
Insurance Program Reauthorization Acts (CHIPRA I and CHIPRA II) (H.R. 976,
H.R. 3963) passed by Congress this fall included provisions that would provide critical assistance to States to facilitate the enrollment of the very poorest of these children who are eligible but not enrolled in Medicaid or SCHIP. Specifically, the
CHIPRA bills included two key provisionsto provide States with an Express Lane
Eligibility option and to provide grants to support State, local, and community-based
outreach and enrollment campaignswhich are among the only new tools provided
that would strengthen outreach and enrollment efforts for this hard-to-reach population.
Express Lane Eligibility
Both CHIPRA I and CHIPRA II included Express Lane provisions that would
allow States to adopt simplified enrollment processes to determine a childs eligibility under Medicaid or SCHIP. Under Express Lane Eligibility, States would be
able to expedite the enrollment of currently eligible children by targeting outreach
to those children who are already participating in needs-based programs. It is estimated that more than 70 percent of low-income, uninsured children are in families
that are already enrolled in the Food Stamp Program, the Women with Infants and
Children (WIC) program, or the National School Lunch Program (NSLP). The idea
of Express Lane is to give States the flexibility to find a child income-eligible for
Medicaid or SCHIP based on the fact that they have already been found eligible for
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nutrition assistance or other comparable programs that operate under similar financial guidelines.
Express Lane proposals enjoy long standing bipartisan support in both the House
and the Senate. It was included in then-Majority Leader Frists child health bill
during the 109th Congress, which the administration supported, and bipartisan legislation (S. 1213) that was introduced earlier this year in the Senate by Senators
Bingaman (DNM) and Lugar (RIN). The Express Lane Eligibility option is designed to target the very poorest uninsured and eligible children who have been the
hardest to reach through other methods.
Outreach and Enrollment Grants

In addition, the reauthorization legislation allocates $100 million for fiscal years
2008 through 2012 for outreach and enrollment grants, with 10 percent of the funding dedicated to a national enrollment campaign, and 10 percent for outreach grants
targeting Native American children.
According to the provision, remaining funds would be distributed by the U.S. Department of Health and Human Services to State and local governments and other
community-based organizations, including safety net providers, schools, or other entities best positioned to reach low-income children through outreach campaigns.
Most important, outreach campaigns would be geared to rural areas and racial and
ethnic populations which are known to be underenrolled in Medicaid or SCHIP. The
legislation also provides an enhanced matching rate in SCHIP and Medicaid for
translation and interpretation services for families for whom English is not the primary language.
The research is conclusive that that community-based organizations are often best
positioned to help identify families with children who are eligible for coverage. This
is particularly the case for minority populations who are disproportionately represented among the ranks of the uninsured.
We believe the enactment of these provisions would provide States important new
tools to reach eligible, low-income children who are not enrolled in health coverage.
I hope this information is helpful and, once again, thank you for the opportunity
to testify before your Subcommittee. We are grateful for your leadership in addressing the health care needs of our most vulnerable children and families and we look
forward to working with you in the future to ensure better care for all of our nations children.
Sincerely,
Bruce Lesley
President
[Responses to Questions for the Record posed by Chairman McDermott to The
Commonwealth Fund follow:]
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[Submissions for the Record follow:]
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Statement of Business Coalition for Benefits Tax Equity

Mr. Chairman, in conjunction with the Subcommittees hearing on the impact of
gaps in health coverage on income security, the 44 members of the Business Coalition for Benefits Tax Equity salute your leadership in addressing an important
health coverage challenge through introduction of H.R. 1820, the Tax Equity for
Health Plan Beneficiaries Act of 2007. Enactment of H.R. 1820 would advance
Congresss efforts to eliminate gaps in health coverage.
Employers across the United States in increasing numbers have made the business decision to provide health benefits to the domestic partners of their employees.
As of June 2007, 53% of Fortune 500 companies (266) are offering domestic partner
health coverage, a more than twelve-fold increase since 1995. These employers have
recognized that the provision of domestic partner health coverage is an essential
component of a comprehensive benefits package. This coverage helps corporations
such as those in our coalition attract and retain qualified employees and provides
employees with health security on an equitable basis.
Unfortunately, federal tax law has not kept pace with corporate change in this
area and employers that offer such benefits and the employees who receive them
are taxed inequitably. This reduces the number of individuals who utilize employerprovided health coverage.
Issues Under Current Law
Currently, the Internal Revenue Code (Code) excludes from income the value of
employer-provided insurance premiums and benefits received by employees for coverage of an employees spouse and dependents, but does not extend this treatment
to coverage of domestic partners or other persons who do not qualify as a dependent (such as certain grown children living at home who are covered under a parents plan or certain children who receive coverage through a grandparent or parents domestic partner). In addition, when calculating payroll tax liability, the value
of non-spouse, non-dependent coverage is included in the employees wages, thereby
increasing both the employees and employers payroll tax obligations. An employee
of median income level who receives employer-provided major medical coverage of
average cost for himself and a domestic partner faces an annual tax bill of $4,710
193
in income and payroll taxes, $1,555 (or nearly 50%) more than that paid by a similarly situated co-worker with spousal coverage. However, this employee has no additional income to meet this higher tax burden. These higher tax levels can lead employees to decline the domestic partner coverage altogether, contributing to Americas problem of the uninsured and to the gaps in health coverage the Subcommittee
is considering today.
The current inequitable tax regime also places significant administrative burdens
on employers. It requires employers to calculate the portion of their health care contribution attributable to a non-spouse, non-dependent beneficiary and to create and
maintain a separate system for the income tax withholding and payroll tax obligations for employees using such coverage.
Employers such as ours that offer domestic partner benefits want to end these tax
inequities so that the benefits we provide help to cover more Americans and so that
all our employees are treated equitably under the tax laws. Ending the tax inequities will also eliminate the need for what are often complex communications to employees about how the tax penalties operate. Finally, ending the inequities will
allow us to jettison the separate and burdensome administrative systems that we
must currently establish to track the income tax withholding and payroll tax obligations for employees using domestic partner coverage.
H.R. 1820 Provides a Solution
H.R. 1820 would end these and other current tax inequities with respect to employer-provided coverage for non-spouse, non-dependent beneficiaries, such as domestic partners. Specifically, the bill would make the following important changes:
1. The value of employer-provided health insurance for a domestic partner or
other non-dependent, non-spouse beneficiary would be excludible from the income
of the employee if such person is an eligible beneficiary under the plan. Employers
would retain the current flexibility to establish their own criteria for demonstrating
domestic partner status. In a corresponding change, the cost of health coverage for
domestic partners or other non-spouse, non-dependent beneficiaries of self-employed
individuals (e.g., small business owners) would be deductible to the self-employed
person.
2. The legislation would make clear that employees paying for health coverage on
a pre-tax basis through a cafeteria plan would be able to do so with respect to coverage for a domestic partner or other non-spouse, non-dependent beneficiary.
3. Many employers, particularly in the collectively bargained context, use tax-exempt Voluntary Employees Beneficiary Associations (VEBAs) to provide health
coverage. Today, VEBAs are prohibited from providing more than de minimis benefits to a domestic partner or other non-spouse, non-dependent beneficiary.
The legislation would permit a VEBA to provide full benefits to non-spouse, nondependent beneficiaries without endangering its tax-exempt status.
4. In contrast to current law, employees would be permitted to reimburse medical
expenses of a domestic partner or other non-spouse, non-dependent beneficiary from
a health reimbursement arrangement (HRA) or health flexible spending arrangement (Health FSA).
5. The value of employer-provided health coverage for a domestic partner or other
non-dependent, non-spouse beneficiary would be excluded from the employees
wages for purposes of determining the employees and employers FICA and FUTA
payroll tax obligations.
We look forward to working with you to advance this legislation and applaud your
inquiry as to how to address gaps in health coverage.
The Business Coalition for Benefits Tax Equity is a coalition of employers that
supports eliminating the federal tax inequities that result when corporations voluntarily provide health care coverage to the domestic partners (and other non-spouse,
non-dependent beneficiaries) of their employees. Coalition members are listed below.
Aetna
Hartford, CT
A.H. Wilder Foundation
St. Paul, MN
American Benefits Council
Washington, DC
Ameriprise Financial, Inc.
Minneapolis, MN
Bausch & Lomb Inc.
Rochester, NY
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Best Buy, Co., Inc.
Richfield, MN
BlueCross BlueShield of MN
Eagan, MN
Capital One Financial Corp.
Falls Church, VA
Carlson Companies
Minneapolis, MN
Charles Schwab & Co, Inc.
San Francisco, CA
The Chubb Corporation
Warren, NJ
Citigroup
New York, NY
CNA Insurance
Chicago, IL
Corning, Inc.
Corning, NY
Coors Brewing Co.
Golden, CO
Cullen Weston Pines & Bach LLP
Madison, WI
The Dow Chemical Co.
Midland, MI
Eastman Kodak
Rochester, NY
EDS
Plano, TX
Ernst & Young
New York, NY
General Mills Inc.
Minneapolis, MN
Hewlett-Packard Co.
Palo Alto, CA
HSBC North America
Prospect Heights, IL
IBM Corp.
Armonk, NY
ICMA Retirement Corporation

Washington, DC
Intel Corporation
Santa Clara, CA
JP Morgan Chase & Co.
New York, NY
Levi Strauss & Co.
San Francisco, CA
Marriott International, Inc.
Washington, DC
Medtronic, Inc.
Minneapolis, MN
MetLife, Inc.
New York, NY
Microsoft Corporation
Redmond, WA
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Motorola
Schaumburg, IL
Nike Inc.
Beaverton, OR
PG&E Corporation
San Francisco, CA
PricewaterhouseCoopers
New York, NY
Project for Pride in Living
Minneapolis, MN
Prudential Financial
Newark, NJ
Replacements, Ltd.
Greensboro, NC
Russell Investment Group
Tacoma, WA
San Fran. Health Svs. Sys.
San Francisco, CA
Texas Instruments
Dallas, TX
Time Warner Inc.
New York, NY
Xerox Corporation
Rochester, NY
f
Statement of Child Welfare League of America, Arlington, Virginia
The Child Welfare League of America (CWLA), representing public and private
nonprofit, child-serving member agencies across the country, is pleased to submit
testimony to the Subcommittee on Income Security and Family Support. CWLA appreciates the opportunity to submit comments to the Subcommittee on the vital
issue of current gaps in health coverage. We commend Chairman McDermott and
members of the Subcommittee for your attention to the increasing difficulty in obtaining and accessing quality, affordable health care and the corresponding impact
on vulnerable populations, including children and youth involved with the child welfare and foster care systems.
Health Care Needs of Children in the Child Welfare System
In federal fiscal year 2005, there were 506,483 children in out-of-home care and
during that same year, approximately 800,000 children spent at least some time in
a foster care setting. 1 Many children that enter the foster care system are at an
extremely high risk for both physical and mental health issues as a result of biological factors and/or the maltreatment they were exposed to at home. Some children
are in out-of-home care for other reasons, such as their parent(s) voluntarily placing
them or feeling compelled to do so. For example, the Government Accounting Office
estimates that in 2001, due to limits on public and private health insurance, inadequate supply of services, and difficulty meeting eligibility requirements, parents
placed over 12,700 children into the child welfare or juvenile justice systems solely
so that these children would be more likely to receive necessary mental health services. 2 Regardless of why the child has come into the child welfare or foster care systems, removing the child from his/her home, breaking familial ties and the continued instability that often ensues greatly exacerbate any original vulnerability.
Numerous studies have documented that children in foster care have medical, developmental and mental health needs that far surpass those of other children, even
those living in poverty. One study found that 60% of children in care have a chronic
1 Child Welfare League of America. (2007). Special tabulation of the Adoption and Foster Care
Analysis Reporting System. Washington, DC: Author.
2 U.S. General Accounting Office (GAO) (2003). Child welfare and juvenile justice: Federal
agencies could play stronger role in helping states reduce the number of children placed solely
to obtain mental health services (GAO03397). Available online at http://www.gao.gov.
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medical condition and one-quarter have three or more chronic health problems. 3
Many also experience developmental delays in regards to language and cognition. 4
When compared to the general population, children younger than six in out-of-home
care have higher rates of respiratory illness (27%), skin problems (21%), anemia
(10%), and poor vision (9%). 5 In regards to mental health, it is estimated that between 54% and 80% of children in out-of-home care meet clinical criteria for behavioral problems or psychiatric diagnosis. 6 In one study, researchers found that between 40% and 60% of children in out-of-home care had at least one psychiatric disorder and that this population of children used both inpatient and outpatient mental health services at a rate 15 to 20 times higher than the general pediatric population. 7
Medicaids Vital Role in Assisting Children in Care
When children are removed from their home base and placed in State custody due
to no fault of their own, Medicaid steps in to provide many of these children with
physical and mental health care that helps them get on the road to recovery. In addition to Medicaids Early, Periodic Screening, Diagnostic, and Treatment (EPSDT)
and the Targeted Case Management Option, Medicaid Rehabilitative Services are
especially vital, as they offer a realistic opportunity toin the least restrictive setting possiblereduce the physical and/or mental disabilities that many children in
foster care have, thereby restoring the childs functioning level, decreasing lingering
and long-term negative impacts, and ultimately reducing costs. Rehabilitative services are also community-based and consumerand family-driven services, in line
with both the Presidents New Freedom Commission on Mental Health and the U.S.
Surgeon Generals recommendations.
Many children and youth involved with the child welfare and foster care systemsmany of whom have experienced life-altering trauma and have little or no familial supportare already slipping through the cracks and it is essential to bridge
rather than widen the gaps. Unfortunately, however, CMS recently proposed a regulation (CMS2261P/72 Fed. Reg. 45201) that would significantly limit access to
Medicaid Rehabilitative Services for many vulnerable populationswho are both
Medicaid-eligible and greatly in need of services, including children involved with
the child welfare and foster care systems. The regulation would entirely take away
federal Medicaid dollars for rehabilitative services that are deemed intrinsic to
other programs, including child welfare and foster care. The authority of CMS to
implement such a provision is questionable, as Congress specifically debated and rejected adopting an intrinsic to test in regards to rehabilitative services when enacting the Deficit Reduction Act of 2005.
Federal Medicaid dollars, for example, would not be available for rehabilitative
services provided in a therapeutic foster care setting unless they are medically necessary, clearly distinct from packaged therapeutic foster care services, and given by
a qualified provider. As the Surgeon General indicated in his 1999 report on mental
health, with care provided in private homes with specially trained foster parents,
therapeutic foster care is considered the least restrictive form of out-of-home therapeutic placement for children with severe emotional disorders. 8 The proposed regulations language, while not explicitly prohibiting therapeutic foster care, whittles
away at its core so much that access will surely be restricted, if not completely shut
off. As a result, because there is a continuum of care in foster care, children who
cannot be maintained in regular foster care due to serious emotional or other health
issues will be forced into more restrictive settingsa result that cannot be justified
by any amount of federal savings.
3 Simms, M.D., Dubowitz, H., & Szailagyi, M.A. (2000). Needs of children in the foster care
system. Pediatrics, 106 (Supplement), 909918.
4 Halfon, N., Mendonca, A., & Berkowitz, G. (1995). Health status of children in foster care:
The experience of the Center for the Vulnerable Child. Archives of Pediatric and Adolescent
Medicine, 149, 386392.
5 Takayama, J.I., Wolfe, E., & Coulter, S. (1998). Relationship between reason for placement
and medical findings among children in foster care. Pediatrics, 101, 201207.
6 Clausen, J., Landsverk, J., Ganger, W., Chadwick, D., & Litrownik, A.J. (1998). Mental
health problems of children in foster care. Journal of Child and Family Studies, 7, 283296;
Halfon et al. (1995); Urquiza, A.J., Wirtz, S.J., Peterson, M.S., & Singer, V.A. (1994). Screening
and evaluating abused and neglected children entering protective custody. Child Welfare, 123,
155171.
7 dosReis, S., Zito, J.M., Safer, D.J., & Soeken, K.L. (2001). Mental health services for foster
care and disabled youth. American Journal of Public Health, 91, 10941099.
8 U.S. Department of Health and Human Services (HHS). (1999). Mental health: A report of
the Surgeon General. Rockville, MD: Author. Available online at http://www.surgeongeneral.gov/
library/mentalhealth/home.html.
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As Twila Costigan, Manager of the Adoption & Family Support Program at CWLA
member agency Intermountain (Helena, MT) testified before the U.S. House of Representatives Oversight and Government Reform Committee on November 1, 2007,
rehabilitative services are used to allow program staff to go into therapeutic foster
homes to model and teach effective interventions to parents and children. Staff also
work with the child to help them develop personal skills to allow them to identify
and communicate their feelings to the adults in their livesrather than acting out
these feelings of rage, sadness, fear, humiliation, jealousy and anxiousness in destructive ways. Ms. Costigans testimony declares sadly that the loss of the Medicaid Rehabilitative services has the likely consequence of eliminating Therapeutic
Foster and Group Home care for the Severely Emotionally Disturbed children in
Montana.
CWLA also strongly advocates that rather than requiring a clearly distinct billing method, States be afforded the discretion to define therapeutic foster care as a
single service and pay through a case, daily, or appropriate mechanism. Packaged
services allow the necessary amount of time and attention to be spent on children
suffering from intense mental issues. The alternative imposes the significant administrative burden of relegating activities into somewhat arbitrary time blocks, which
ultimately takes time away from the child and reduces services effectiveness and
the childs progress.
CWLA also has concerns about soon-to-be released regulations regarding the use
of Medicaid Targeted Case Management. TCM allows States to target a select population to receive in-depth case management serviceseven across child-serving systemsthereby assisting the child in accessing much needed medical and social services. At least thirty-eight States employ the TCM option to provide greater coordination of care for children in foster care and the children who receive TCM services
fare better in a wide array of areas. Specifically, TCM recipients are more likely to
receive physician services (68% compared to 44%); prescription drugs (70% compared to 47%); dental services (44% versus 24%); rehabilitative services (23% versus
11%); inpatient services (8% versus 4%) and clinic services (34% compared to 20%). 9
Medicaid and its components, including EPSDT and the Rehabilitative Services
and Targeted Case Management options, must remain strong, viable streams of
care. Aggressive efforts must be made to thwart any contrary actions so that Medicaid may fulfill its purpose of bettering the health of some of our nations most vulnerable children.
Access Concerns
Many of the challenges associated with the provision of health care for children
in out-of-home care relate to funding, specifically the constraints posed by the Medicaid program. In many States, providers report very low reimbursement rates and
long waits for payment. In some communities, providers have declined to continue
to see patients who have Medicaid as their health care coverage. As the number of
providers for children in out-of-home care decreases, access and choice diminish,
waiting lists become commonplace, and services are delayed. At the same time, a
number of States have mandated that children in out-of-home care shift from feefor-service Medicaid to Medicaid managed care. These changes in the delivery and
funding of health care services have led to concerns that services for children in outof-home care will be rationed and that services that were already difficult to obtain
under the fee-for-service model, particularly mental health services, will become
even more difficult to access. 10
In addition, health care providers often lack experience in treating the physical
and mental health problems that children in out-of-home care experience. They may
face serious obstacles in obtaining accurate medical histories for children, including
information about current and prior medications. On the child welfare workforce
end, child welfare caseworkers are often young, have limited professional experience, and are managing caseloads that far exceed recommended standardsall of
which likely contribute negatively to the timely and appropriate provision of health
care for children in foster care. Final concerns include: distance to providers and
lack of transportation, placement changes while in out-of-home care, barriers to in9 Geen, R., Sommers, A., & Cohen, M. (August 2005). Medicaid Spending on Foster Children.
Available online at http://www.urban.org/UploadedPDF/311221_medicaid_spending.pdf. Washington, DC: The Urban Institute.
10 American Academy of Pediatrics. (2002). Health care of young children in foster care: Committee on Early Childhood, Adoption and Dependent Care. Pediatrics, 109, 536541.
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formation sharing between the health care and child welfare systems, and failures
to coordinate the childs health care and child welfare plans. 11
Youths Leaving Foster Care Due To Age
Certainly there is no group of Americas youth more deserving of Congress attention than those in foster care or those who leave foster care after turning age 18.
Every year 20,00025,000 young people exit the foster care system. 12 These young
people leave care simply because there is an age limit on federal funding. While
some States may extend this support beyond age eighteen and the Chaffee Independent Living Program offers limited funding for transitional services to these
young people, all too often the end result is that foster children find themselves on
their own at age eighteen.
Barriers to a Secure Adulthood
Adolescents constitute a major segment of the youngsters the child welfare system
serves. In 2005, 29 percent of children in care were 15 years of age or older. 13 Most
youth enter out-of-home care as a result of abuse, neglect, and exploitation. Others
have run away from home or have no homes. Young people transitioning out of the
foster care system are significantly affected by the instability that accompanies long
periods of out-of-home placement during childhood and adolescence. These young
people often find themselves truly on their own, with few, if any, financial resources, no place to live, and little or no support from family, friends, and community. The experiences of these youth place them at higher risk for unemployment,
poor educational outcomes, health issues, early parenthood, long-term dependency
on public assistance, increased rates of incarceration, and homelessness. The resulting harm to the youth themselves, their communities, and the society at large is
unacceptably high.
Health Needs and Lack of Health Coverage
For the 20,00025,000 youth who age out of care each year, many times their
health needs linger into adulthood. Foster care alumni experience a disproportionate
amount of both physical and mental health issues, including post-traumatic stress
disorder and major depression. Compounding this problem is the fact that 33% of
foster care alumni lack health insurancea rate almost twice as high as the general
population. 14 The Chafee program allows States to extend Medicaid coverage to
former foster children between ages 18 and 21. Despite Medicaids tremendous advantage for youth in foster care, however, only 17 States had implemented the extension as of December 2006. 15
Legislative Steps
The Child Welfare League of America desires for all children in foster care to receive coordinated, continuous, comprehensive, and culturally competent health care
services and supports legislation working toward that goal. 16 Services must be coordinated in terms of providing cross-system training and continuity in service both
while the child is in State custody and after he or she leaves as a result of reunification, placement with a relative, adoption, or aging out of care. Because children in
foster care experience a wide array of and disproportionate amount of health needs,
services must be comprehensive and address childrens medical, mental, dental,
emotional, and developmental needs. This is not just a goal or desire of CWLA, but
it is a necessary component to reducing the number of children in foster care. Something we all seek.
11 Child Welfare League of America (CWLA). (2007). Standards of Excellence for Health Care
Services for Children in Out-of-Home Care. Washington, DC: Author.
12 Children who aged out of foster care are captured by the AFCARS emancipation data element. Children who exit care to emancipation are those who reached the age of majority; CWLA,
Special tabulation from AFCARS.
13 Adoption and Foster Care Analysis and Reporting System (AFCARS) data submitted for the
FY 2005, 10/1/04 through 9/30/05.
14 Pecora, P.J., Kessler, R.C., Williams, J., OBrien, K., Downs, A. C., English, D., White, J.,
Hiripi, E., White, C. R., Wiggins, T., & Holmes, K. (2005). Improving family foster care: Findings
from the Northwest Foster Care Alumni Study. Available online at http://www.casey.org/Resources/Publications/NorthwestAlumniStudy.htm. Seattle, WA: Casey Family Programs.
15 Patel, S. & Roherty, M. (2007). Medicaid Access for Youth Aging Out of Foster Care. Washington, DC: American Public Human Services Association. Available online at http://
www.aphsa.org/Home/Doc/Medicaid-Access-for-Youth-Aging-Out-of-Foster-Care-Rpt.pdf.
16 Child Welfare League of America (CWLA). (2007). Standards of Excellence for Health Care
Services for Children in Out-of-Home Care. Washington, DC: Author.
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Proposed Medicaid Regulations that Would Restrict Access to Needed Care
Rather than making such sweeping changes to vital community-based services
such as Medicaid Rehabilitative Services and Targeted Case Management through
rulemaking, CWLA believes that these important decisions should be debated thoroughly and done through the legislative process. CWLA strongly supports long-term
efforts to ensure that Medicaid and its components remain financially supported, accessible streams of care. In the immediate, CWLA urges Congress to pass a moratorium on the proposed Rehabilitative Services regulation. Such a moratoriumthat
would halt any Administrative action that restricts coverage or payment under Rehabilitative Services until January 1, 2010was included as Section 616 of the Childrens Health Insurance Program Reauthorization Act of 2007 (H.R. 3963). However,
because the fate of that reauthorizing legislation is currently uncertain, CWLA
would strongly support a similar moratorium in another legislative vehicle.
Health Care for Youth Transitioning Out of Foster Care
The Medicaid Foster Care Coverage Act of 2007, H.R. 1376, has been introduced
by Representative Dennis Cardoza (DCA-18). We support this bill and commend
Congressman Cardoza for introducing this bill. This legislation which has bipartisan
support including the support of five members of this Subcommittee, addresses a
critical issue for young people leaving foster care, the fact that by some surveys 33%
of foster care alumni lack health insurance. Congressman Cardozas legislation
would make sure that young people leaving the system due to their age be assured
that they will at least have the safety net of continued Medicaid coverage until their
twenty-first birthday. For this population we need to do so much more including increasing our efforts to prevent these young men and women from reaching the point
of aging-out of the child welfare system. For now we can take this one basic, minimum step of allowing them continued access to a doctor.
Conclusion
CWLA appreciates the opportunity to offer our comments to the Subcommittee in
regard to gaps in health coverage and the accompanying growing challenges for vulnerable populations, including children and youth in the child welfare and foster
care systems. As this Subcommittee moves forward, we look forward to a continued
dialogue with its members and all Members of Congress. We hope this hearing
serves as a building block for future efforts that work to ensure coordinated, continuous, and comprehensive health care coverage for all childrenespecially those atrisk of placement, those already in foster care, and those transitioning out of the
child welfare system into adulthood.
f
Statement of Human Rights Campaign

On behalf of the Human Rights Campaign and our over 700,000 members and
supporters nationwide, I thank Representative McDermott for calling this hearing
on the impact of gaps in health coverage. As the nations largest civil rights organization advocating for the Gay, Lesbian, Bisexual, and Transgender (GLBT) community, the Human Rights Campaign strongly supports measures that will ensure
health coverage for all Americans.
GLBT families are faced with a particular challenge in the area of health insurance. Families rely heavily on employer-provided health insurance, a benefit that
is increasingly offered to same-sex couples. Recognizing that their lesbian and gay
employees deserve equal pay for equal work, and that they need a diverse workforce
to compete in todays economy, over one half of the Fortune 500 companies now offer
equal health benefits to their employees same-sex domestic partnersup from only
one in 1992. Unfortunately, our tax system does not reflect this advance toward true
meritocracy in the workplace. Under current federal law, employer-provided health
benefits for domestic partners are subject to income tax and payroll tax. As a result,
a lesbian or gay employee who takes advantage of this benefit takes home less pay
than the colleague at the next cubicle. Some families have to forego the benefits altogether because of this unfair taxadding them needlessly to the millions of uninsured Americans in this country.
Here is an example of the inequity: In 2006 Steve earned $32,000 per year and
owed $3,155 in federal income and payroll taxes. Steves employer also paid the
monthly premium of $907 for Steves family health coverage, of which $572 the
amount in excess of the premium for self-only coverage. None of this coverage was
taxable under current law. Steves co-worker, Jim, earned the same salary and had
the same coverage for himself and his partner, Alan. However, the value of the cov-
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erage provided to Alan is subject to federal income and payroll taxes. As a result,
$6,864 of income is imputed to Jim and his federal income and payroll tax liability
increased from $3,155 to $4,710. This represents nearly a 50% increase over Steve
and Emilys tax liability.
For many families, especially those with modest incomes, the tax hit is more than
they can bear. In Steve and Alans case, the additional $1,555 in tax liability is beyond their means. Put simply, taxing these benefits can exclude families from employer-provided benefits. With over 40 million Americans uninsured, and Medicaid
now costing taxpayers $4,072 per individual, we should be working to decrease the
number of uninsured, not creating hurdles while corporate America is attempting
to provide equal benefits.
It is time for the federal government catch up with Americas leading corporations
and to stop taxing domestic partner benefits. The Tax Equity for Health Plan Beneficiaries Act, H.R. 1820, introduced by Subcommittee Chairman McDermott, would
eliminate the tax inequity and render health insurance more affordable for gay and
lesbian families. 1 This is a common-sense bill that brings our tax system up to date
with corporate best practices. We encourage Congress to support this healthy proposal and work toward its passage.
f
Statement of National Association of Disability Examiners
Mr. Chairman and members of the Subcommittee, thank you for providing this
opportunity for the National Association of Disability Examiners (NADE) to present
a statement on the Impact of Gaps in the Health Coverage on Income Security.
NADE is a professional association whose purpose is to promote the art and
science of disability evaluation. The majority of our members work in the State Disability Determination Service (DDS) agencies and thus are on the front-line of the
disability evaluation process.
Our members feel that there is an area of critical importance to the disabled population of our country that should be considered by those involved with this hearingthe 24 month Medicare waiting period for Title II disability claimants. While
this Subcommittee oversees the Title XVI program, the Medicare Waiting Period
has an impact on a large cross-section of the population and could serve to fill some
of the gaps in health coverage discussed at this hearing.
Most Social Security disability beneficiaries have serious health problems, low incomes and limited access to health insurance. Many cannot afford private health insurance due to the high cost secondary to their pre-existing health conditions. Members of the National Association of Disability Examiners (NADE) are deeply concerned about the hardship the 24 month Medicare waiting period creates for these
disabled individuals, and their families, at one of the most vulnerable periods of
their lives.
In 1972, Congress passed Social Security legislation extending Medicare coverage
to persons who had been receiving disability cash benefits for 24 consecutive
months. Congress is to be commended for providing these health care benefits for
the disabled American population. The original purpose of the Medicare waiting period was to help keep program costs within reasonable bounds, avoid overlapping
private insurance protection and provide assurance that the protection will be available to those whose disabilities have proven to be severe and long lasting.
In the original 1972 legislation there was one exception to the 24 month Medicare
waiting period. Individuals with chronic renal disease would only have to wait three
months before receiving Medicare benefits. In 2000, Congress passed legislation, implemented in 2001, that eliminated the Medicare waiting period for those individuals with amyotrophic lateral sclerosis (ALS), commonly known as Lou Gehrigs disease. In both of these situations, it was felt that the health of the affected individuals warranted more timely access to Medicare coverage.
Currently nearly six million disabled individuals receive Medicare benefits, and
Medicare plays a vital role in ensuring that these individuals have access to appropriate and affordable health care. NADE believes that requiring some disabled individuals to serve a waiting period before receiving health care benefits and not requiring others to do so is fundamentally unfair and causes a tremendous hardship
for individuals with disabilities at one of the most vulnerable periods of their lives.
All Title II Social Security disability beneficiaries, except for the two groups mentioned above, are required to serve a 24 month waiting period before becoming eligi1 A similar bill has been introduced in the Senatethe Tax Equity for Domestic Partner and
Health Plan Beneficiaries Act (S. 1556).
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ble for Medicare benefits. The Medicare waiting period begins with the first month
of receiving Social Security disability cash benefits which is five full months after
the onset of a disability. This means that the majority of Social Security disability
beneficiaries actually wait twenty-nine months after the onset of their disability before becoming eligible for Medicare health insurance benefits.
The majority of Social Security disability beneficiaries have impairments that are
severe and long lasting. Currently less than one percent of Social Security disability
beneficiaries have their benefits terminated each year. Another four percent die during the Medicare waiting period. Many beneficiaries suffer irrevocable physical and
mental deterioration while waiting for Medicare coverage and needed health care
services. Early intervention and provision of needed health care services as soon as
possible after the onset of disability, and at a time when the individual needs it
most, could improve both these statistics and the quality of life for individuals with
disabilities. NADE supports the elimination or, at the very least a reduction, of the
24 month waiting period for Medicare benefits for all Title II disability beneficiaries.
This change is needed to ensure fundamental fairness in the program and equity
to all Social Security disability beneficiaries.
Eliminating, or reducing, the 24 month Medicare waiting period for Social Security disability beneficiaries would address the insurance needs of a high-risk, highneed population and provide financial relief and access to health care services at a
time when health care needs are especially pressing and few alternatives exist.
Social Security beneficiaries in the Medicare waiting period face enormous problems. Research conducted by the Commonwealth Fund, in conjunction with the
Henry J. Kaiser Family Foundation and the Christopher Reeve Paralysis Foundation, found that Social Security disability beneficiaries reported skipping medications, putting off needed care, feeling depressed and anxious about the future, and
believing they were not in control of their own lives during the 24 month Medicare
waiting period.
Although some Social Security disability beneficiaries may initially be found eligible for SSI (thereby receiving Medicaid benefits), many lose that health care coverage when they complete their five-month waiting period and begin receiving Social
Security disability cash benefits. Thus many disability beneficiaries are without any
health insurance for at least some portion of their 24 month Medicare waiting period. Without health care coverage, individuals health conditions cannot improve,
nor can they return to work, participate in their communities or stop depending on
family members and friends for their basic needs. Beneficiaries need better access
to health services before they can consider working again. Many individuals with
disabilities might return to work if afforded access to necessary health care and related services.
NADE members, who work on the front-line of the disability program, have
first-hand experience with the hardships that the 24 month Medicare waiting period
places on disabled beneficiaries. During continuing disability reviews NADE members all too often see individuals whose conditions, without proper health care coverage, have markedly deteriorated and who are significantly worse than when they
were initially awarded disability benefits. The financial and emotional toll this has
taken on the disabled beneficiary and their families is disheartening. Many individuals who could have been cured and/or found to be no longer disabled continue to
be disabled due to the lack of access to needed health care services during the early
stages of their disability. Such medical care could, in many cases, have improved
both their disabling condition(s) and their overall situation in life.
The Medicare waiting period is an often insurmountable barrier for individuals
with disabilities. It offers frustration and emotional distress to people and families
who are already hurting. Individuals with disabilities perceive the waiting period
as being punitive and inherently unfair. Some individuals feel that the government is just waiting for people to die. Moreover, for many individuals, it will cost
more in the long run for health care and services as individuals conditions deteriorate because they are not receiving appropriate treatment. NADE strongly believes
that Social Security disability beneficiaries and their families who are forced to deal
with the trauma of disability, should not then be forced to deal with deteriorating
health, financial pressures and emotional frustration caused by the Medicare waiting period. Medicare coverage at the onset of an individuals disability would relieve
not only a significant financial, but also a significant emotional burden for disability
beneficiaries and their families.
Most Americans with disabilities wish to lead active, healthy and productive lives
and believe that employment is an important key to achieving this goal. Improvements in health care and early intervention of needed medical services could increase rehabilitation successes, provide greater employment opportunities and enhance the ability of people with disabilities to be more active and productive. Early
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interventions and access to needed health care services would provide not only
greater emotional and economic stability for disabled individuals, it would decrease
costs to the Social Security disability program as well.
The Social Security Administration has proposed some new demonstration
projects under their Work Opportunity Initiative to help overcome the barrier that
the 24 month Medicare waiting period poses for those disability beneficiaries and
applicants who wish to work. The demonstration projects provide supports, incentives and work opportunities to people with disabilities at the early stages of the
disability determination process. Three of these proposed demonstration projects
provide immediate medical benefits to applicants for disability benefits by offering
comprehensive, affordable health care coverage. This allows beneficiaries to receive
needed medical services early on in the onset of disability to enhance their vocational profile to return to work. Such interventions are not only good business practice from a financial standpoint, but from a humane and public relations aspect as
well. NADE fully supports all initiatives and demonstration projects designed to assist disabled individuals in their efforts to obtain needed health care, promote selfsufficiency and return to work.
NADE members strongly believe that claimants and their families, who are forced
to deal with the onset of disability, should not then be forced to deal with the lack
of health care coverage. For both Social Security and SSI disability, the definition
of disability is the same, the medical listings are the same, and the adjudicative procedures used to process the claims are the same. However, the health care benefits
provided to those who are found disabled are not.
Disabled individuals who receive SSI disability benefits are eligible to receive
health care coverage under the Medicaid program immediately upon being found eligible for SSI benefits. Because the SSI disability beneficiaries can receive health
care benefits immediately, the perception clearly exists that the individual who has
worked and contributed to the nations workforce and economy is penalized for having done so! Most Social Security disability beneficiaries face a daunting combination of low income, poor health status, heavy prescription drug use and high medical
bills. They spend their days trying to survive and get their most basic human and
health care needs met. Access to the health care services provided by Medicare is
crucial if individuals with disabilities are to maximize their potential, avoid far
more costly hospitalizations and long-term institutionalization and lead fuller and
more productive lives.
Congress passed the Americans with Disabilities Act in 1990 with the specific
goals of ensuring equal opportunity, full participation in society, independent living
and economic self-sufficiency for individuals with disabilities. Eliminating, or at
least reducing, the 24 month Medicare waiting period would not only be an extremely humane gesture for these disabled workers and their families, it is perfectly
aligned with the American with Disabilities Act and it is the right thing to do!
NADE recognizes that there are costs involved with eliminating the 24 month
Medicare waiting period. Thus, our members would also support an incremental approach to reducing this. Some of the costs could be offset by a reduction in federal
Medicaid expenditures. The Government Accountability Office (GAO) stated in their
report on transforming government to meet the 21st century challenges that policymakers must confront a host of emerging forces and trends shaping the United
States . . . and . . . accompanying these changes are new expectations about the
quality of life for Americans and . . . testing the continued relevance and relative
priority for our changing society of existing federal programs is critical to ensure
fiscal responsibility and facilitating national renewal. NADE agrees with GAO and
feels it is time to change the Medicare waiting period to bring it into the 21st century.
f
Statement of Matthew Melmed, Zero to Three

Chairman McDermott and Members of the Subcommittee:
My name is Matthew Melmed. For the past 12 years I have been the Executive
Director of ZERO TO THREE, a national non-profit organization that has worked
to advance the healthy development of Americas babies and toddlers for 30 years.
I would like to start by thanking the Subcommittee for its interest in examining the
impact of gaps in health coverage on income security. I would also like to thank the
Subcommittee for providing me the opportunity to discuss the interaction between
poverty, access to health care, and the healthy physical, social-emotional, and cognitive development of our nations infants and toddlers.
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For these youngest children, regular health care can spell the difference between
a strong beginning and a fragile start that leaves them behind. In the battle of
words and policies over who should receive help in obtaining health insurance, and
therefore better access to health care, we often forget that there are some groups
of people who simply cant waitand babies are one of them. We hope that thinking
about their needs can help spur action on behalf of all children and families.
When we as parents think back to our childrens earliest years, we inevitably
think of the many visits to the pediatrician. For many of us, it is daunting to imagine having to pay out of pocket for all that care or even worse, to imagine foregoing
that care because of the trade-offs it would require in other basic necessities of life.
And to contemplate the staggering medical bills for infants with the complications
of preterm birth or low birth-weight would be overwhelming. Yet, many parents do
face these circumstances as more than one in ten infants and toddlers are without
health insurance. 1
The pool of very young children at-risk is even greater because we know that a
childs health and development are intricately related to the conditions in which
lower-income families live. Two out of every five children under the age of three in
America live in families considered low-income (at or below 200% of the federal poverty level). 2 Very young children are more likely to be poor than children as a
whole, spending their critical early years developmentally in an environment that
impacts them more severely than other age groups. Moreover, it takes only one
event such as an accident, a baby requiring expensive neonatal care, or the loss of
a job and the health insurance that may come with it to send a family spiraling
down into the at-risk population.
For infants and toddlers, we cannot think of the developmental domains in isolation. Infancy and toddlerhood are times of intense cognitive, social-emotional, and
physical development, and the development in these areas is inextricably related.
So poor health in a very young child can lead to developmental problems in other
areas and vice versa.
Too often we ignore the early years of a childs life in making public policy, failing
to give children and families supports that could make a difference in how their
lives unfold. Yet, we spend a great deal of time and money on needs identified later
in lifefor example, gaps in cognitive development upon entering preschool or more
intensive special education services for problems that may have begun as much
milder developmental delays left undiagnosed and untreated in a young baby.
Mr. Chairman, my message to you is that policymakers need to be aware of the
important foundations laid in the early years of life and structure policies in such
a way that they: 1) promote healthy development of infants and toddlers, 2) prevent
many of the devastating physical, social-emotional, and cognitive impairments that
these young children face in the future, and 3) treat acute and chronic illnesses, developmental delays, social-emotional problems, and learning disabilities in a timely
manner. Simply put, babies and their families cant waitwe know that early intervention and prevention work best and we know that living in poverty can increase
parental stress and compromise the healthy development of young children. We
need policies that support parents and other caregivers in providing young children
with the strong foundation they need for healthy development.
The Effects of Health Care Gaps on Infants and Toddlers
Like other children, infants and toddlers are not immune to the growing health
insurance gap in our country. Even though 52% of infants and toddlers in low-income families have at least one parent who works full-time, 3 the economic reality
of the labor force is that employer-sponsored health insurance is becoming more and
more of a rarity. In fact, nearly 12% of children under the age of three1.9 million
infants and toddlerslack health insurance. 4
The health insurance gap affects babies even before birth when one considers the
prenatal care to which their mothers may or may not have access. The March of
Dimes estimates that an American newborn has a 1-in-5 chance of being born to
a mother who lacks health insurance. 5 Their mothers are therefore less likely to
1 Annie
E. Casey Foundation analysis of data from the 2007 Current Population Survey.
Ayona and Chau, Michelle. 2007. Basic facts about low-income children: Birth
to age 3. September 2007. http://www.nccp.org/publications/pub_765.html (accessed September
20, 2007).
3 Ibid.
4 Annie E. Casey Foundation analysis of data from the 2007 Current Population Survey.
5 March
of Dimes. 2006. Newest American baby faces health challenges. http://
www.marchofdimes.com/printableArticles/15796_21848.asp, (accessed November 9, 2007).
2 Douglas-Hall,
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receive prenatal care, including screenings and diagnostic tests, which can improve
their health as well as their babies health.
What does it mean for a baby or toddler to lack access to health care? One likely
consequence is missed doctor visits at which preventive care or early screening
would take place. The Academy of Pediatrics recommends eight well-baby care visits
with a pediatrician in the first year of life, with five more by the time the child
reaches the age of three. These visits focus on preventive pediatric health care, including vision, hearing, lead, and developmental screenings; psychosocial/behavioral
assessments; and promotion of proper oral health care. 6 These screenings and assessments are critical during the birth to three period to detect impairments, developmental delays and disabilities, and life-threatening disorders. If diagnosed early,
these delays and disorders can be successfully managed or treated to prevent more
severe and costly consequences later in life. In addition to well-baby visits, those of
us who are parents know families are likely to find themselves in the pediatricians
office many more times for childhood illnesses. For the family without health insurance, paying for this number of visits can seem daunting indeed.
The result is not just a matter of conjecture. Research shows that without adequate health insurance, infants and toddlers fall victim to a host of poor health outcomes. In fact, uninsured children are almost five times more likely than insured
children to have at least one delayed or unmet health care need. 7 Uninsured infants
and toddlers are also less likely to have a regular pediatrician or medical home. 8
As a result, they are less likely to obtain preventive care or be diagnosed and treated early for illnesses, instead waiting until conditions are no longer manageable before seeking care in the Emergency Room (ER) of their local public hospital. In fact,
in the last 50 years, the number of visits to ERs has increased more than 600% in
the United States, 9 with children 018 accounting for over 31 million visits to the
ER every year. 10 Children under the age of three represent the largest proportion
of medically and injury-related ER visits in the country. 11
Emergency Rooms are the safety net of the United States health care system, but
they are not a substitute for routine care, nor should they be. ERs are overcrowded
and overburdened, leaving less staff and resources for those who truly need emergency care. For example, asthma, the leading cause of pediatric hospitalizations and
missed school days, 12 is a chronic condition, but one that is manageable with proper
attention and medication. By waiting until an attack is imminent rather than controlling environmental triggers on an ongoing basis, care becomes much more expensive and difficult to obtain. Yet, uninsured families and those living in poverty often
do not have a choice as access to regular health care is unreachable.
Infants and toddlers also require 20 doses of vaccines before they are two years
old to protect them against 12 preventable diseases. 13 Vaccines are cost-effective
public health measures that have decreased the incidence of several childhood diseases in the United States, including diphtheria, measles, mumps, rubella, and
meningitis by 99% and completely eradicated polio. 14 Not so long ago, these diseases caused death and paralysis among the most vulnerable youth. While the majority of our nations infants and toddlers do receive the full range of recommended
immunizations, nearly 18% of infants and toddlers do not. 15 Because uninsured
children and those living in poverty are less likely to have a regular pediatrician,
6 American Academy of Pediatrics and Bright Futures. 2007. Recommendations for preventive
pediatric health care. http://aappolicy.aappublications.org/cgi/reprint/pediatrics;105/3/645.pdf
(accessed November 9, 2007).
7 American Academy of Pediatrics. 2007. Childrens health care coverage. http://www.aap.org/
advocacy/washing/ ChildrensHealthCareCoverage.pdf (accessed November 9, 2007).
8 American Academy of Pediatrics. 2004. Overcrowding crisis in our nations Emergency Departments: Is our safety net unraveling? Pediatrics 114 (3): 878888. http://
aappolicy.aappublications.org/cgi/reprint/ pediatrics;114/3/878.pdf (accessed November 9, 2007).
9 Ibid.
10 American Academy of Pediatrics. 2001. Care of children in the Emergency Department:
Guidelines to preparedness. Pediatrics 107 (4): 777781. http://aappolicy.aappublications.org/cgi/
reprint/pediatrics;107/4/777.pdf (accessed November 9, 2007).
11 Ibid.
12 Ku, Leighton, Lin, Mark, and Broaddus, Matthew. 2007. Improving childrens health: A
chartbook about the roles of Medicaid and SCHIP. Center for Budget and Policy Priorities.
http://www.cbpp.org/schip-chartbook.pdf (accessed November 9, 2007).
13 American Academy of Pediatrics. 2007. Immunizations. http://www.aap.org/advocacy/washing/Immunizations.pdf (accessed November 9, 2007).
14 Ibid.
15 American Academy of Pediatrics. 2007. Statistics. http://www.aap.org/advocacy/washing/Statistics.pdf (accessed November 9, 2007).
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they are also less likely to receive the full range of recommended immunizations,
thereby threatening not only their health, but the publics health as well.
The Cost of Extraordinary Care
Even if uninsured families are able to pay for routine visits, a serious health condition can push them over the edge financially. The high costs of hospital care for
premature or low-birthweight infants, in particular, can be overwhelming for parents without health insurance. One factor leading to these conditions is a lack of
prenatal care, which as noted above, is more likely to be a factor for women who
lack health insurance, creating a devastating chain of events for mother and baby.
The March of Dimes estimates that, in 2005, preterm births cost the United States
at least $26.2 billion, or $51,600 for every infant born preterm. 16 A 1999 study of
neonatal intensive care found that the median treatment cost for all infants in the
study was $49,457 (in 1994 constant dollars) while costs at the 90th percentile was
$130,377. The lowest birthweight infants had a higher median cost at $89,546. 17
For parents who have jobs that do not provide health insurance, such medical
bills must seem insurmountable. In a study of families that had filed for bankruptcy, caring for premature infants and chronically ill children was a common
theme. 18 Sometimes it is the loss of a job when the parent must care for the child
that is the final straw.
The Impact of Poverty on the Healthy Development of Infants and Toddlers
I would like to focus in on lower-income children, who are at greater risk for a
variety of poorer outcomes and vulnerabilities than middle-income infants and toddlers, including health impairments, social-emotional problems and diminished
school success. 19 The health-related experiences of infants and toddlers on the lowest rungs of the income ladder and their developmental consequences illustrate that
lacking support for good health care does not just mean missing a few doctor visits.
These experiences also give us a sense of the trade-offs families must sometimes
make in choosing among essentials for their families.
Of the 12 million infants and toddlers living in the United States, 21%a staggering 2.6 million infants and toddlerslive in poor families (defined as families
with incomes at or below the federal poverty level or $20,650 for a family of four). 20
When one takes into account those families who are classified as low-income (at or
below twice the federal poverty level or $41,300 for a family of four), the percentage
and number of infants and toddlers living in dire economic conditions jumps to 44%
or 5.4 million. 21 While the number of children of all ages living in poor families has
increased over the past several years, the number of infants and toddlers living in
poor families has increased at an even faster rate (16% vs. 11%). 22 What is particularly troubling, in addition to the rise of childhood poverty, is the fact that very
young children are disproportionately impacted by economic stressthat is, the negative effects of poverty are likely to be more severe when children are very young
and their bodies and minds are still developing.
Gaps in health coverage and access to adequate health care are costly, not just
for the affected infants, toddlers, and families themselves, but to all of society. Poverty, itself, raises direct expenditures on health care by $22 billion per year. 23 It
is important to keep in mind, however, that it is not just those families living in
poverty or near poverty who are at-risk, but there are many more families who are
susceptible to poor health outcomes. In fact, in 2006, almost 23% of the uninsured
16 March of Dimes. 2006. Premature birth: The economic costs. http://marchofdimes.com/
printableArticles/ 21198_10734.asp. (accessed November 9, 2007).
17 Rogowski, Jeannette. 1999. Measuring the cost of neonatal and perinatal care. Pediatrics
103 (1): 329335. http://pediatrics.aappublications.org/cgi/content/full/103/1/SE1/329 (accessed
November 9, 2007).
18 Himmelstein, David U., Warren, Elizabeth, Thorne, Deborah, and Woolhandler, Steffie,
2005. Illness and injury as contributors to bankruptcy. HEALTH AFFAIRSWeb Exclusive
http://content.healthaffairs.org/cgi/reprint/
hlthaff.w5.63v1?maxtoshow=&HITS=10&hits=10
&RESULTFORMAT=&author1=Himmelstein&andorexactfulltext=and&searchid=1
&FIRSTINDEX=0&resourcetype=HWCIT (accessed November 9, 2007).
19 Shonkoff, Jack and Phillips, Deborah. From neurons to neighborhoods: The science of early
childhood development. Washington, DC: National Academy Press.
20 Douglas-Hall, Ayona and Chau, Michelle. 2007. Basic facts about low-income children: Birth
to age 3.
21 Ibid.
22 Ibid.
23 Holzer, Harry J., Schanzenbach, Diane W., Duncan, Greg J., and Ludwig, Jens. 2007. The
economic costs of poverty in the United States: Subsequent effects of children growing up poor.
Institute for Research on Poverty Discussion Paper no. 132707. http://www.irp.wisc.edu/publications/dps/pdfs/dp132707.pdf (accessed November 9, 2007).
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in the United States reported having household incomes above $50,000 a year, a 2%
increase from the previous year. 24 All it takes is a terrible accident, the loss of stable employment (and any health coverage which might go along with it), or a mental
health disturbance to send a family reeling.
Health Impairments
One health issue facing low-income children is food insecuritylacking adequate
resources to meet basic food needs. 25 In the United States, there are 12.6 million
households that are considered food insecure, with 12.4 million children affected. 26
Nearly 17 percent of U.S. households with children younger than six are food insecure. 27 Choosing between adequate food and adequate health care may be one of
the dilemmas facing families without health insurance.
Not only do food insecure households purchase less food in general, but they are
also more likely to purchase low quality food or skip meals altogether. Access to
fresh fruits and vegetables is often limited or priced out of reach, causing low-income parents to purchase higher-calorie, less nutritious, and energy-dense foods in
order to maximize their caloric intake while they have the resources to buy food at
that particular moment. 28 Reliance on less nutritious foods and limited physical activity has resulted in an explosion of childhood obesity. In 2000, 10.4% of children
between the ages of two and five were considered obese. 29 Not surprisingly, children
from lower socioeconomic families are more at-risk for obesity than more affluent
children. 30 Of course, this is important because children who are obese and/or live
in food insecure households face a number of health impairments that can have devastating lifetime effects. Because food insecure and obese children often have compromised immune systems, they are less able to resist illnesses and, therefore, are
more likely to be hospitalized. 31 In fact, children from food insecure households are
90% more likely to suffer from poor or fair health and experience 30% higher rates
of hospitalization. 32 Long-term consequences may include development of juvenile
diabetes, hypertension, asthma, anemia, sleep apnea, and several social-emotional
problems and cognitive deficiencies discussed below. 33
Social-Emotional Problems
Families who struggle to make ends meet are often stressed to the limit, looking
for any way possible to help mitigate the effects of poverty for their children. Yet,
the very fact that parents may be spending more time working to earn the money
to feed their children means they are less available for their children. Early relationships are the active ingredient for healthy social-emotional development in very
young children. These early relationships form the foundation upon which all subsequent relationships will be formed. Important behavioral, physiological, and emotional regulation systems are being formed during these critical years. 34 Parents or
caregivers who are absent, physically or mentally, cannot bond as strongly with
their babies, creating a higher likelihood that parents and very young children will
face a host of poor social-emotional outcomes.
The existence of maternal depression and other adult mental health disorders, for
example, can negatively affect children if parents are not capable of providing consistent sensitive care, emotional nurturance, protection and the stimulation that
young children need. 35 Maternal depression, anxiety disorders, and other forms of
chronic depression affect approximately 10 percent of mothers with young children 36this number is even higher for families in poverty. In fact, findings at en24 U.S. Census Bureau. 2007. Income, poverty, and health insurance coverage in the United
States: 2006. http://www.census.gov/prod/2007pubs/p60-233.pdf (accessed November 9, 2007).
25 Parker, Lynn. 2007. Food insecurity and obesity. ZERO TO THREE JOURNAL 28 (1): 24
30.
26 Ibid.
27 Ibid.
28 Ibid.
29 Milano, Kim. O. 2007. Prevention: The first line of defense against childhood obesity. ZERO
TO THREE JOURNAL 28 (1): 611.
30 Ibid.
31 Parker, Lynn. 2007. Food insecurity and obesity.
32 Ibid.
33 Ibid.
34 Shonkoff, Jack and Phillips, Deborah. From neurons to neighborhoods: The science of early
childhood development.
35 Cohen, Julie, Onunaku, Ngozi, Clothier, Steffanie, and Poppe, Julie. 2005. Helping young
children succeed: Strategies to promote early childhood social and emotional development. Washington, DC: National Conference of State Legislatures and ZERO TO THREE.
36 OHara, Michael W. 1994. Postpartum depression: Causes and consequences. New York, NY:
Springer-Verlag Inc.
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rollment from the Early Head Start Research and Evaluation Project indicate that
52 percent of mothers reported enough depressive symptoms to be considered clinically depressed. 37 Not surprisingly, lack of health insurance can add to parental
stress. An analysis of data from the 2000 National Survey of Early Childhood
Health found that mothers with uninsured children and those with children with
missed or delayed care were both significantly more likely to be in poor mental
health. 38
Early and sustained exposure to parental stress and depression can influence the
physical architecture of the developing brain, preventing babies and toddlers from
fully developing the neural pathways and connections that facilitate later learning.
Young children can sense the stresses their parents or caregivers are experiencing,
which in turn, can affect the behavior and mental health of children themselves.
Children, particularly those who are from food insecure families, are at higher risk
of developing aggression, anxiety, depression, and hyperactivity than food secure
children. 39 According to the Fragile Families and Child Wellbeing Study, food insecure families were much more likely to experience mental health problems in mothers and behavioral problems in their three-year-olds than food secure families. 40 As
children grow older, these behavioral problems continue to be prevalent. Children
from food insecure families were not only more likely to receive mental health counseling, but were also more likely to fight with their peers and steal than their more
affluent peers. 41
Diminished School Success
Health impairments and social-emotional problems also directly affect later school
success. Children who are sick or hospitalized miss more days of school and have
trouble learning, resulting in lower grades and test scores and poorer cognitive development, school readiness, and success. 42 Children who start behind, stay behind.
When developmental delays and health impairments are detected and treated early,
however, children have a much better chance of school success. In fact, a study of
Californias Childrens Health Insurance Program found that after one year of enrollment in the program, children were more attentive in class (57% after vs. 34%
before) and more likely to keep up with their school activities (61% after vs. 36%
before). 43 Without early and effective treatment, costs increase to all of society as
special education costs are estimated at about $4 billion per year. 44
Shifting the Focus from Treatment to Promotion and Prevention
As outlined above, the economic costs to society for poor physical, social-emotional,
and cognitive development of our nations infants and toddlers is absolutely staggering. The good news is that we can do a lot to lower those costs by shifting the
focus from treatment to promotion and prevention. ZERO TO THREEs recommendations include:
Ensuring Access to a Medical Home for Every Child in the U.S.
Every child in the United States should have access to a medical homea regular
pediatrician they see for ongoing care and follow-up. The American Academy of Pediatrics calls for accessible, continuous, comprehensive, family centered, coordinated, compassionate, and culturally effective care. 45 A regular pediatrician would
facilitate all aspects of pediatric care, including supervision of care; patient and parent counseling about health, nutrition, safety, and mental health; and the importance of well-child visits, immunizations, and screenings and assessments. He or she
should also refer a child to early intervention services when appropriate and coordi37 U.S. Department of Health and Human Services, Administration for Children and Families.
2003. Early Head Start Evaluation and Research Project, Research to practice: Depression in the
lives of Early Head Start families. Washington, DC. http://www.acf.hhs.gov/programs/opre/ehs/
ehs_resrch/reports/dissemination/research_briefs/ research_brief_depression.pdf (accessed May
10, 2007).
38 Mistry, Ritesh, Stevens, Gregory D., Sareen, Harvinder, De Vogli, Roberto, Halfon, Neal,
2007. Parenting-related stressors and self-reported mental health of mothers with young children. American Journal of Public Health 97(7): 12611268.
39 Parker, Lynn. 2007. Food insecurity and obesity.
40 Ibid.
41 Ibid.
42 Ibid.
chartbook about the roles of Medicaid and SCHIP.
44 Holzer, Harry J., Schanzenbach, Diane W., Duncan, Greg J., and Ludwig, Jens. 2007. The
economic costs of poverty in the United States: Subsequent effects of children growing up poor.
45 American Academy of Pediatrics. 2002. The medical home. Pediatrics 110 (1): 184186.
http://aappolicy.aappublications.org/cgi/reprint/pediatrics;110/1/184.pdf (accessed November 9,
2007).
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nate care with other early childhood programs. 46 By relying on a single consistent
health care provider, lower-income families can avoid unnecessary and more expensive treatment in ERs, walk-in clinics, and urgent care facilities, thereby reducing
costs to all of society.
Providing Adequate SCHIP Coverage for All Eligible Infants and Toddlers
The State Childrens Health Insurance Program (SCHIP) has also dramatically
improved the health and well-being of our most vulnerable children. Since SCHIP
began in 1997, the percentage and number of low-income uninsured children has
fallen by more than one-third. 47 This is particularly important as publicly-insured
children (those enrolled in SCHIP and Medicaid) are more likely to have chronic
conditions requiring ongoing care, such as asthma, learning disabilities, and health
conditions. 48 By insuring these children, we can safely and effectively manage conditions rather than relying on the nations safety net for more expensive urgent
care. Furthermore, children in SCHIP are more likely to receive well-child visits,
immunizations, screenings, dental care, and other forms of preventive care, further
reducing the need for more costly interventions later. 49
Expanding Access to Comprehensive Early Childhood Programs
Comprehensive high quality early learning programs for infants and toddlers,
such as Early Head Start, can help to protect against the multiple adverse influences that may hinder their development across all domains. Research from the
Early Head Start Research and Evaluation Project, and its companion follow-up results, concluded that the program is making a positive difference in areas associated
with childrens access to health care, childrens success in school, family self-sufficiency, and parental support of child development. For example, 28 months after enrollment in the Early Head Start program, 95% of infants and toddlers had received
one or more well-child exams, 99% had received immunizations, and 69% had received screenings tests (41% for hearing and 28% for lead). 50 Early Head Start also
produced statistically significant, positive impacts on standardized measures of childrens cognitive and language development. Early Head Start children demonstrated
more positive approaches to learning than control group children. 51 Early Head
Start also had significant impacts for parents, promoting family self-sufficiency and
parental support of child development. Early Head Start children had more positive
interactions with their parents than control group childrenthey engaged their parents more and parents rated their children as lower in aggressive behavior than
control parents did. Early Head Start parents were also more emotionally supportive and less detached than control group parents and provided significantly
more support for language and learning than control group parents. 52 By expanding
access to quality early learning programs, we can reach children early in life when
we can have the greatest chance to improve future success.
Increasing Investments in Family Income Supports and Nutritional Programs
Finally, income supports and nutritional programs help low-income families improve the healthy physical, social-emotional, and cognitive development of their children. Child tax credits, the Earned Income Tax Credit, and a meaningful minimum
wage are key to helping families obtain self-sufficiency. In addition, federal nutrition
programs such as the School Breakfast, School Lunch, After School Snacks, and
Summer Food Service Programs provide nutritionally-balanced foods for low-income
children. The Food Stamp program helps low-income families purchase more food
and improve their diets. The Child and Adult Care Food Program provides funds
46 Ibid.
chartbook about the roles of Medicaid and SCHIP.
48 Ibid.
49 Ibid.
50 U.S. Department of Health and Human Services, Administration for Children and Families.
2006. Health and health care among Early Head Start children. http://www.acf.hhs.gov/programs/opre/ehs/ehs_resrch/reports/health_care/health care.pdf (accessed November 9, 2007).
51 U.S. Department of Health and Human Services, Administration for Children and Families.
2002. Making a difference in the lives of infants and toddlers and their families: The impacts
of
Early
Head
Start.
http://www.acf.hhs.gov/programs/opre/ehs/ehs_resrch/reports/impacts_exesum/impacts_execsum.pdf (accessed October 23, 2006). U.S. Department of Health and
Human Services, Administration for Children and Families. 2006. Research to practice: Preliminary findings from the Early Head Start prekindergarten followup. http://www.acf.hhs.gov/programs/opre/ehs/ehs_resrch/reports/prekindergarten_followup/prekindergarten_followup.pdf
(accessed October 23, 2006).
52 Ibid.
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for meals and snacks for children in child care and Head Start/Early Head Start
programs. And, the Supplemental Nutrition Program for Women, Infants, and Children (WIC) Program provides low-income nutritionally at-risk pregnant,
breastfeeding and postpartum mothers, infants, and children under the age of five
with food, nutrition education, and health care referrals. All of these programs provide economic supports to struggling low-income families in an effort to improve outcomes for their children.
Conclusion
During the first three years of life, children rapidly develop foundational capabilitiesphysical, social-emotional, and cognitiveon which subsequent development
builds. These areas of development are inextricably related. When young children
do not have access to health care because they are uninsured (or for other reasons),
every aspect of their development can suffer. These years are even more important
for infants and toddlers living in poverty. All young children should be given the
opportunity to succeed in school and in life. We must ensure that infants, toddlers,
and their families living in poverty have access to quality, accessible, consistent, and
culturally appropriate health care and insurance. We must also ensure that low-income children have access to developmentally appropriate early learning programs
such as Early Head Start to help ensure that they are ready for school. And, finally,
we must ensure that families struggling to make ends meet receive income supports
and nutrition assistance to ensure that their infants and toddlers grow up healthy,
happy, and ready to learn. Providing supports to low-income at-risk families will
have a trickle down effect on our youngest children and thereby have even more
positive long-term benefits in our efforts to break the intergenerational cycle of poverty.
I urge the Subcommittee to consider the very unique needs of babies living in poverty as you address the impact of gaps in health coverage on income security. Too
often, the effect of our overall policy emphasis is to wait until at-risk children are
already behind physically, emotionally, or cognitively before significant investments
are made to address their needs. We must change this pattern and invest in at-risk
infants and toddlers early on, when that investment can have the biggest payoff
preventing problems or delays that become more costly to address as the children
grow older.
Thank you for your time and for your commitment to our nations at-risk infants,
toddlers and families.
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Impact of Gaps in Health Coverage On Income Security: Hearing

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Impact of Gaps in Health Coverage On Income Security: Hearing

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IMPACT OF GAPS IN HEALTH COVERAGE

COMMITTEE ON WAYS AND MEANS

NOVEMBER 14, 2007

Serial No. 11065

wwoods2 on PROD1PC60 with HEARING

For sale by the Superintendent of Documents, U.S. Government Printing Office

VerDate Aug 31 2005

00:03 Dec 03, 2008

COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT

JERRY WELLER, Illinois

wwoods2 on PROD1PC60 with HEARING

VerDate Aug 31 2005

00:03 Dec 03, 2008

Advisory of November 7, 2007, announcing the hearing ......................................

SUBMISSIONS FOR THE RECORD

wwoods2 on PROD1PC60 with HEARING

Business Coalition for Benefits Tax Equity, statement .......................................

VerDate Aug 31 2005

00:03 Dec 03, 2008

wwoods2 on PROD1PC60 with HEARING

VerDate Aug 31 2005

00:03 Dec 03, 2008