HEARING - U.S. Senate Special Committee on Aging

115
- 13-
(B) State risk pools. If the goal is to increase the
adoption of state risk pools, it is not sufficient to merely
"encourage the formation of state risk pools to subsidize
insurance for those whose medical condition makes it impossible
or prohibitively expensive to get insurance." [p. 114].
Legislation is needed to provide states with strong incentives
to establish such risk pools.
(C) Medicaid Exoansion Option. One positive option
discussed in the Report is not recommended: "Permit all
individuals below some income level to purchase Medicaid
coverage on a sliding premium scale depending on income." [p.
87-. The Report estimates that if the plan included all people
under 125% of the poverty line, with premiums limited to 5% of
income could cost as much as $15 billion if all eligible people
enrolled. The Report fails to estimate the cost savings that
would be achieved: many people presently on AFDC and medicaid
are deterred from taking a job because they will become
ineligible for medicaid and will be unable to obtain affordable
health insurance. Note also that even this inflated cost
estimate is less than the present federal subsidy for the
exclusion from taxation of the employer-paid health insurance
premiums (which benefit primarily middle and upper-income
people).