Expanding Healthy Families to Parents: The Role of Employer Coverage Issue Brief No. 3 (April 2001)

Publication Date: April 2001

Publisher: Medi-Cal Policy Institute

Author(s): Ed Neuschler; Rick Curtis; Mark Merlis

Research Area: Health

Type: Brief

Coverage: California

Abstract:

In January 2001, California was on the verge of expanding health insurance coverage to uninsured parents through the Healthy Families program (California's State Children's Health Insurance Program [SCHIP]). The reasons behind this expansion were that coverage for uninsured parents provides access to care; helps reduce unmet medical needs; and protects against financial devastation in the event of major medical expenses. Covering parents also makes it more likely that children in these families will be covered and receive the care they need. The ailing California economy, and deep budget cuts in the Medi-Cal program, prevented the expansion of the Healthy Families program to parents. This issue brief was written before the necessity of cutbacks became apparent. In this brief, the authors explore concerns that as public coverage expands to include more working families, it will become increasingly a substitute for existing private employer coverage, a phenomenon known as "crowd-out." When public coverage becomes available to parents, incentives for employers to offer coverage decline and, for parents with access to employment-based insurance, incentives to participate in employer plans decrease. To better understand how expanding public coverage to California parents with incomes of up to 200 percent of the Federal Poverty Level can effectively target uninsured families, this issue brief addresses the following questions:

*How prevalent is employment-based coverage among low-income parents? *How many low-income parents have access to employment-based insurance and how likely are parents to take up coverage when it is offered? *How long are the uninsured without coverage and how likely are those who are currently uninsured to have access to employment-based insurance in the future?

This issue brief also examines policy options intended to assure that public coverage expansion complements, rather than undermines, job-based coverage for low-income workers. This issue brief will give readers a historical perspective on plans for expanding the Healthy Families program to adults before state budget cuts took place.