A Managed Care Insurance Product for the Uninsured: A Case Study

Brief communication A MANAGED CARE INSURANCE PRODUCT FOR THE UNINSURED: ACASESTUDY One group of Americans still remains largely untouched by the managed care revolution that has swept the health care system in the United States: our nation's 43 million uninsured residents.1 The reason is obvious: managed care companies enroll patients who receive coverage as an employee benefit, who are eligible for Medicaid or Medicare, or who can afford coverage themselves . As a result, useful aspects of managed care are not available to the uninsured. Large corporations, Medicaid agencies, and the federal government have looked to managed care companies to cut health care costs and to improve the continuity of care for employees and beneficiaries. There is no reason, however , that these same benefits could not be provided to the uninsured if they could be enrolled in a managed care organization for their health care services. The principles of managed care—a primary care orientation, an emphasis on health promotion, and preapproval—could be used to reap the same benefits for individuals and families who are uninsured at present, as well as for the institutions or government agencies that provide uncompensated care to the uninsured. This article describes a program implemented in Jefferson County, Alabama , intended to expand access to care for low-income, previously uninsured individuals. The program provides comprehensive inpatient and outpatient care for a modest premium based on a family's income and size through a network of community-based clinics and the county's public hospital . In contrast to some health programs that are designed and managed from afar, members of the community are involved at every level in the program's design, implementation, and governance. The initial experience with this project supports the premise that the cost of health coverage is a primary barrier to becoming insured for many low-income individuals, although other factors also determine whether a person purchases insurance regardless of the cost. This case study describes the setting for the program in Jefferson County, Alabama, and some of its early experiences; discusses previous efforts to enhance access for the uninsured population; and closes with a discussion of the implications of these experiences. Journal of Health Care for the Poor and Underserved · Vol. 11,No. 1 · 2000 6 Managed Care Insurance for the Uninsured Background Policy makers who are initiating programs to cover those who were previously uninsured are concerned with several issues. First, will the program achieve the goals of enabling more individuals to be covered by health insurance ? This requires individuals to enroll in voluntary programs. Second, will those who enroll use medical care similarly to those who are already covered? If not, will there be pent-up demand or adverse selection? Pent-up demand implies that those who enroll will be more likely to use services than others during the early period of their enrollment. Adverse selection implies that among those who could enroll, only the less healthy enroll, and that those who enroll are always more likely to use care. Several prior studies have addressed the subjects discussed above. Without looking at a specific program, Blumberg2 used 1989 National Health Interview Survey data to simulate rates for those who were uninsured in order to explore whether uninsured patients will increase their use of services once they gain insurance. Blumberg standardized utilization rates for those who were uninsured to the rates of privately insured individuals in the same areas of the country. This exercise suggested that those who are uninsured will increase their utilization of nonobstetric hospital days by 28 percent and physician office visits by 52 percent. The results of a simulation placing all individuals in HMOs are considerably different. Hence, not only will providing insurance likely increase utilization in the uninsured group, but also the type of insurance provided is likely to be important. Bograd and colleagues3 also addressed the question of whether previously uninsured patients use more health services than demographically similar patients who have consistently had health insurance. In 1991, Kaiser Permanente of Colorado initiated a local, private program that subsidized the purchase of insurance for previously uninsured families; these families came from six local community agencies. Families with incomes at or below 200...