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Today, 96.5 percent of children and adolescents either have health insurance or are uninsured but eligible for a public plan. This proportion far exceeds the most optimistic coverage projections for adults under the Patient Protection and Affordable Care Act. The child health insurance safety net was crafted from 1982 to 1997 through several incremental, bipartisan federal and state legislative actions. It began by offering and later mandating state Medicaid eligibility expansions and culminated with the enactment of the State Child Health Insurance Program. Two-thirds of the states leveraged these laws to expand coverage beyond federal requirements. As a senior executive with the American Academy of Pediatrics, the author was directly involved or closely monitored these federal and state child health insurance expansions. This case study is a participant-observer analysis of that period, an era that stands in stark contrast to today's highly partisan times. The successive expansions of publicly funded children's health insurance during this conservative period, when many other human services programs were slashed, are attributed to public sympathy for children, political acceptability by the right and the left, manageable costs, and the relative ease of state implementation as these changes came in incremental pieces over several years.

Previously we examined the health care system reform proposals of the major candidates in the 2008 Presidential Primaries (Flint & Gorin, 2008). Whatever the outcome of the 2008 election, pressure for reform is not likely to dissipate. In this article we assess the current climate for and possibility of reform. We also identify and discuss four current approaches--conservative reform, a single-payer system; private--public models; and state reform. BACKGROUND Readers of this journal are well aware of the problems facing our health care system, particularly in the areas of access and cost. More than 47 million Americans are completely uninsured, and the number of underinsured people (that is, individuals with inadequate coverage) has reached 25 million, having grown 60 percent between 2003 and 2007 (Schoen, Collins, & Kriss, & Doty, 2008). According to the Urban Institute, 22,000 adults (ages 25 to 64) a year die because of a lack of health insurance (Dorn, 2008). Although health care inflation has slowed in recent years, this modest respite is likely temporary (Ginsburg, 2008). Despite the recent moderation in medical care inflation, nearly a fifth of the population went without or delayed receiving "needed" care (Cunningham & Felland, 2008). Although problems with access were particularly intense for individuals without coverage and those in poorer health, "insured people also faced large increases in unmet need" (Cunningham & Felland, 2008, p. 1). The central reason cited for problems with access was concern about cost. Health care costs are spreading beyond impeded access to care. The Government Accountability Office recently warned that health care inflation poses a serious threat to the long-term fiscal stability of the nation ("Long-Term Fiscal Outlook," 2008). Given these circumstances, the pressure for health reform is not likely to dissipate any time soon. Prospects for Reform Prognosticating is fraught with risk, particularly because at the time of this writing we do not know which party will win the White House or control the Congress. Nonetheless, on the basis of the information we have, this is our best estimate of the current climate and prospects for reform. Wyden and Bennett (2008) argued that we have entered a period during which it may be possible to "break 60 years of gridlock" and enact meaningful health care reform. They point to bipartisan support for Senate Bill 334, the Healthy Americans Act (2007), which guarantees universal coverage though "market-driven health care choices like those that members of Congress have today" (Wyden & Bennett, 2008, p. 690). They cite "an ideological truce" between Republicans and Democrats, and recognition by business and labor groups that they must work together to modernize our employer-based system to "meet the needs of both workers and employers" (Wyden & Bennett, 2008, p. 690). Democratic pollsters assert that "fundamental" reform may be possible, but warn that "the opportunity could easily dissipate" (Lake, Crittenden, & Mermin, 2008).Voters believe that health care should be a right and recognize reform as an investment in the future. They also want the security and "peace of mind" universal coverage would bring. Despite this, opponents will actively work "to sow confusion, doubt, and fear about major change" (Lake et al., 2008, p. 698). Immigration is a particular "wild card." Opponents of reform are likely to attack any universal proposal as benefiting "illegal immigrants," a charge that is "potentially a greater liability than any of the usual attacks on taxes, government control, and so on" (Lake et al., 2008, p. 697). Although reform is a "real possibility," advocates cannot take it for granted but must work "strategically as well as passionately for the changes they seek" (Lake et al., 2008, p. 698). McInturff and Weigel (2008), prominent Republican pollsters, argue that the situation we face today is similar to that in the early 1990s. …

As noted previously in this journal, health care reform has again become a central political issue (Gorin & Moniz, 2007). This article examines the health care debate in the presidential primary campaigns and considers implications for future health policy. As of this writing, no candidate on either side has officially won their party's nomination. Consequently, we focus on the positions of the three leading candidates, Democrats Barack Obama and Hillary Clinton and the Republican John McCain. Although the eventual nominees are likely to refine their proposals for the general election, we can discern the broad outlines of the positions they will present to the voters in November. The 2008 presidential primary contests have been hardly run-of-the-mill. For the first time since 1928, the field does not include an incumbent president or vice president. Senators will be the standard bearers for both parties ensuring the first election of a member of that body as president since 1960. And the Democrats are poised to select either a woman or an African American to head their ticket. Change is the buzzword for the 2008 campaign, and whatever the outcome, change seems ensured. What changes can we expect to see in the health care system? There is widespread consensus across party lines regarding the major problems plaguing the U.S. health care system. Simply stated, the system serves too few, costs too much, harms too many, and is too inefficient. Although "increases in personal health care spending" have "slowed" in recent years, Ginsburg (2008) argues that "relief for purchasers and consumers will be short-lived" (p. 30). A decade ago, affordability was primarily a problem limited to low-income families, but it has increasingly become an issue for middle-income families (Banthin, Cunningham, & Bernard, 2008). To address widespread delivery system inefficiency, all three candidates have advocated similar solutions: conversion to electronic medical records, greater treatment transparency and consumer information, further shift toward pay-for-performance for providers, improved chronic disease care management, greater emphasis on preventive care, and unspecified "malpractice reform" (Collins & Kriss, 2008). The three leading candidates also agree that subsidies to purchase private insurance for low-to-moderate-income families are needed and would best be distributed through the income tax system, although the proposed subsidy levels vary greatly. They also agree that affordable, new private insurance options should be made available at the state, regional, or national level for the uninsured population and those in the individual private insurance market (Collins & Kriss, 2008). Finally, converting to a single-payer system is perceived as either undesirable or politically impossible. This is where the candidates' consensus ends. On the fundamental issue of extending coverage to the 47 million people without insurance, an enormous gulf exists between the two political parties. Republicans have long opposed efforts to expand public coverage. President George W. Bush has developed a proposal that at best would have a minimal impact on the insured population and could make matters worse (Gorin, 2007). More recently, the president has strenuously opposed efforts to expand the State Children's Health Insurance Program (SCHIP) (Gorin & Moniz, 2007). All the Republican presidential candidates have followed suit, including Senator McCain, who advocates "a genuinely conservative vision for health care reform," which does not rely on "state power to mandate care, coverage or costs" (http://www. johnmccain.com/Informing/News/Speeches/ 8f5febd6-cdca-4136-b0d8-a97f5287235d.htm). He would "reform the tax codes to eliminate the bias toward employer-sponsored health insurance" and, to expand coverage, offer tax credits to families and individuals (http://www.johnmccain. com/healthcare/). …

The battle over dismantling health reform dominates today s health policy agenda. Some opposition to the Patient Protection and Affordable Care Act (P.L. 111-148)--now typically referred to as the Affordable Care Act (ACA)--comes from those on the political left who see health care as a public good similar to the military, the fire department, and the court system (Physicians for a National Health Program, 2010). Only government can fund and deliver public goods, because the private market cannot be relied on to do so with the equity and efficiency required for critical services needed by everyone. Many on the political right fear "a government takeover" of the health care system that will lead to the loss of the very market-driven, creative solutions that are so desperately needed to reign in the cost escalations that threaten to make health care unaffordable. I see the ACA as a politically shrewd compromise that captures the principal benefits of both camps and creates the least disruptive path to a workable framework that can ultimately lead to universal health insurance coverage at sustainable prices. This middle ground is achieved through the ACA'S requirements shifting the health care system from a lightly regulated market commodity to a heavily regulated public utility. Public utilities are privately owned firms that provide necessities in monopoly or near-monopoly situations. Because unfettered monopolies can price gouge, they are required to accept extensive government regulation to ensure that they do not abuse their market power. Some public utilities are complete monopolies (for example, regional electric, water, and gas companies), and others (for example, cable television, telecommunications) have some modest competition. However, all public utilities are profit-driven, privately owned businesses, which distinguishes them from public goods that are funded and operated by the public sector. Public utility regulation has two fundamental characteristics. First, all utilities are legally obligated to serve virtually everyone, despite the known unprofitability of certain customers and customer groups. All customers are allowed to use as much of a utility's services as they like, with occasional exceptions such as temporary limits on lawn watering during droughts. Second, the prices that are charged to consumers are determined by public commissions rather than private corporations. Public utility commissions have essentially unrestricted access to a firm's books. This provides them with far greater insight into a company's financing than is required of publicly held companies, let alone privately owned businesses and other proprietorships. Contrast that environment with how health insurers operated up till now. Insurers could select their customers and set their own prices, like any other seller of goods and services in a private market. Insurers do contend with some government regulation handled primarily at the state level, but these regulations are limited to issues such as fiscal solvency requirements, state-mandated benefits, "patient protection laws" for managed care plans, and truth-in-advertising and other marketing practices. However, state regulation does not address consumer accessibility or pricing. In 1996, enactment of the Health Insurance Portability and Accountability Act (HIPAA) (EL. 104191) created federal-level regulation for insurers in the large-group and self-insured employer markets. HIPAA requires insurers to cover all group members, regardless of preexisting conditions, and to renew all insurance plans, regardless of claims experience. However, HIPAA's impact is limited in that it does not address pricing. This makes guaranteed issue and guaranteed renewability a hollow promise, because annual premiums can be hiked at the whim of the insurance company. Undesirable clients can simply be priced out of the market. And HIPAA does not apply to the individual and small-group markets, the areas where consumer rights are most constrained. …

Dozens of state Medicaid programs pay pediatricians poorly.1 There have been some successful court challenges to paltry reimbursement rates for pediatric care2; nonetheless, many Medicaid programs manage to get away with extremely low reimbursement levels. These states' unspoken strategy is to rely on subsidized safety-net providers (such as federally qualified health centers and hospital emergency and outpatient departments) and private practitioners who are willing to accept below-market reimbursement rates for appointments not taken by better-paying, privately insured patients. However, recent trends have indicated that the days of Medicaid on the cheap may be waning. Safety-net providers are stretched to capacity,3,4 and an increasing number of young pediatricians value leisure time more than Medicaid's reimbursements. Fortunately for low-income children, pediatricians are greater participants in Medicaid than any other specialty despite its uncompetitive fees. Medicaid accounts for an average of 34% of pediatricians' revenues, more than twice the average for all US physicians,5 and many pediatricians will treat all children regardless of reimbursement level.6 However, when Medicaid rates are too low, strong economic incentives push doctors toward maximizing the number of privately-insured patients in their practice and minimizing the number of Medicaid-insured children that they treat. Historically, state Medicaid programs have counted on the immutable economics of private practice. The vast majority of practice overhead costs are fixed (eg, nonphysician personnel, rent, malpractice insurance premiums), but the marginal cost to treat each … Address correspondence to Samuel S. Flint, PhD, Indiana University Northwest, School of Public and Environmental Affairs, 3400 Broadway, Gary, IN 46408-1197. E-mail: sflint{at}iun.edu

Medicaid's efficacy as a safety net for children has been lost in the heated health policy debates of the last 2 years. The second year of the last Congress was dominated by competing proposals that would have cast aside Medicaid and assured universal coverage through comprehensive private health insurance plans. The first year of the current Congress has been spent debating legislation designed to reduce the federal government's role in the provision of health care services through constrained funding, regulatory rollback, and broadened latitude for state programs dependent on federal dollars, (eg, Medicaid). Over the past 2 years, taking the position that the Medicaid program should be exempt from proposed changes (at least with respect to children) has not been in vogue.

This study of the Medicaid program analyzes changes in child recipients, costs, and service use during the 1980s to assess the effects of recent federal policy shifts and to project future costs for children. Data presented in this study are from the Health Care Financing Administration's Medicaid Statistical Report for the years 1979, 1985, and 1990, three time-points that demarcate major federal policy shifts. About half of all recipients added to the Medicaid program during the last decade were children; they comprised 14% of the total cost growth experienced by the program. In addition, the eligibility distribution of children receiving Medicaid shifted markedly over the last decade. In 1979, children receiving cash assistance comprised 90% of total child recipients; by 1990, this figure dropped to 72%. Future expansions to the Medicaid program are projected to cost less than the initial expansions. This is because the early expansions disproportionately served infants, who require more hospital services than older children. Despite the major changes in Medicaid eligibility for children during the 1980s, only limited cost shifts occurred in expenditures for children. Children continue to consume a small portion of the Medicaid budget. Congress should explore options for guaranteeing that their share of funding for services will be adequate. Moreover, since future expansions will be far less expensive than those already implemented, accelerating the phase-in process for all poor children may be a more financially feasible policy option than many policymakers anticipate, despite the fiscal hardships facing many states.

Optimal pediatrician participation in the Medicaid program is essential if the full benefits of recent eligibility expansions are to be realized. A 1989 national survey of the members of the American Academy of Pediatrics (n = 940), designed as a follow-up to similar studies conducted in 1978 and 1983, was an examination of the factors that influence pediatrician participation. Between 1978 and 1989: (1) basic participation (treating any Medicaid beneficiaries) declined to 77% from 85%; (2) limited participation (seeing only some Medicaid beneficiaries who request care) increased from 26% to 39.4%; and (3) extent of participation (the percentage of a pediatrician's patients who are Medicaid beneficiaries) increased from 15.7% to 19.4%. A dichotomous conceptualization of participation (restricted or unrestricted) was developed. By this definition, only 56% of pediatricians allowed comparable access to their practices for both Medicaid and private patients. Low reimbursement and slow payments discouraged participation. Medicaid reimbursement to pediatricians was approximately equal to their overhead costs. However, a high degree of willingness to care for Medicaid children remains if fees are increased to within 11% to 16% of the private market level. Policy options to enhance participation are discussed.

OBRA89: THE FIRST FOUR YEARS Since Medicaid began, the program has sought to provide equal access to medical care for the low-income beneficiaries it serves. The equal access regulation (42 C.F.R. 447.204) was included in the original set of Medicaid regulations promulgated in 1966. It was modified slightly in 1978, but remained largely without substantive policy impact until the enactment of the Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239, OBRA89). OBRA89 was the capstone to a string of federal laws that began in 1984, which dramatically expanded Medicaid eligibility for children and pregnant women and transformed Medicaid from an in-kind, income maintenance program tied to public assistance to a public health insurance safety net now serving more than 50 million Americans, including more than one-fourth of the nation's children. (Kaiser Commission on Medicaid and the Uninsured, 2004). Through a three-pronged strategy, OBRA89 provided children and pregnant women with a special status among beneficiary groups in the Medicaid program. First, it dramatically broadened the mandated eligible age group from low-income pregnant women and children to age seven, to all poor children to age 18. But unlike predecessor legislation that established eligibility expansions through income and age standards only, the Congress went much further to ensure that these new beneficiaries would receive the mainstream care that it intended. It created requirements in two areas that historically had been the prerogative of the states--benefits and provider payment--changing the latter through a toughened equal access standard. The benefits revision centered on a requirement that states provide enhanced early and periodic screening, diagnosis, and treatment (EPSDT) services. The EPSDT program is the federal mandatory Medicaid service that requires states to provide children, to age 21, with a set of preventive care services defined in consultation with established medical and dental groups. This benefits revision specified more comprehensive health screening services and more important, required states to provide any treatment service needed to remediate a medical problem identified in an EPSDT screening. States were explicitly mandated to provide services to children even if they exceeded the amount, duration, and scope of care identified in the state plan and were not provided to adults. Previously these "discretionary services" were optional. With respect to provider reimbursement, OBRA89 elevated the equal access requirements by shifting them from regulation to codified legislation. It also toughened the states' performance standards by requiring provider payments "sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area" (OBRA89, Section 6402). The notion of a geographic area baseline, with which Medicaid access to care would be compared and to which states would be held accountable, was entirely new. It also instituted comprehensive state reporting requirements to the Secretary of Health and Human Services (HHS) on the participation rates of obstetric and pediatric providers and payment rates for a long list of commonly provided pediatric and obstetric care services. The selection of only pediatric and OB services, as opposed to other possible groupings, such as all primary care or all federally mandated services, and its linkage to children's eligibility and benefits enhancements in the same legislation underscored the Congressional intent to ensure equal access to care specifically for children and pregnant women. These unprecedented legislative actions sent a clear message to the states that children and pregnant women must be furnished medically necessary care and created in the view of many, a special entitlement accorded to no other Medicaid-eligible subpopulations. …

A growing body of evidence continues to document the obvious: Kids are better off when insured. The scope of the problem is known. Cited often is the figure used by Kenneth Thorpe in this volume of Health Affairs that more than ten million children (14 percent of the under-age-nineteen population) are uninsured. However, like adults, the uninsured child population is not static, and point-in-time estimates fail to capture coverage gaps. Two recent studies report virtually identical findings with respect to this aspect of the problem. The consensus that one child in seven is uninsured on any given day, and more than two in seven are either never covered or experience a gap in coverage over a given two-year period has not varied significantly for several years. Nonetheless, these proportions appear to be alarming enough in the era following the defeat of universal coverage to motivate several state legislatures and Congress to act. Although the federal legislative proposals outlined in Thorpe’s paper surely will change by press time, the trade-offs he explores will not. n To Medicaid or not to Medicaid? The first issue Thorpe raises is whether Medicaid expansions should be the vehicle to expand children’s coverage, or if a new federally funded program, which purchases private health plans, should be created. Given budget constraints, it seems unlikely that Congress will enact supplemental insurance coverage for children (and pregnant women) beyond income levels already available and operational in some states under existing Medicaid law (for example, Hawaii and Minnesota at 275 percent of the federal poverty level). Some analysts have proposed an enriched federal match for children to induce states to consider expansions. However, many states that have expanded coverage for children and pregnant women far beyond federal requirements have a relatively low federal match (for example, Minnesota, NewHampshire,Washington, and Hawaii), whereas some states with a high federal match (for example, Alabama and Montana) have not expanded coverage. Absent an illegal “unfunded mandate,” the Medicaid solution adds nothing that states do not already have. Even if new federal incentives circumvented the unfunded mandate issue and states voluntarily expanded their eligibility levels, there still is the beneficiary participation problem. In spite of broad benefits and prohibition on copayments for children’s services, Medicaid has too much baggage (for example, welfare stigma and complex application procedures) to become working families’ safety net. The participation rate for children who were made eligible for Medicaid during the first six years after itwas “delinked” fromwelfare was at most 60 percent. However, if a new program similar to MinnesotaCare were created that used a single application process to determine eligibility for either Medicaid or subsidized private insurance, it is likely that the enticement of gaining private coverage could locate many of the three million uninsured, Medicaid-eligible children. It would require good-faith state outreach efforts, supported by new federal penalties for underenrollment, in addition to the current disincentives for enrolling ineligible persons.