Health Insurance and the States
Updated: June 20, 2008
For most Americans, market-based health insurance remains the predominant form of health coverage. According to the most recent detailed census report (2006, published August 2007),
of 296,824,000 total Americans:
- 201,690,000 people (67.9%) were covered by private market health insurance.
- 177,152,000 people (59.7%) were enrolled in employer based insurance. The percentage of people covered by employment-based health insurance decreased between 2004 and 2005, from 59.8 percent to 59.5 percent.
- 27,066,000 people (9.1%) were enrolled in "individual market" or direct purchase health insurance.
- By comparison:
- 38,281,000 were counted in Medicaid, of whom 6,419,000 also had some type of private insurance. [NOTE: Medicaid agencies provided services to over 50 million individuals in 2006; see NCSL's Medicaid Overview for resources and updates]
- 40,343,000 were enrolled in Medicare, of whom 21,777,000 also had some type of private insurance, such as "Medi-Gap" supplemental policies or retiree benefits from a former employer. [Italics indicates 2003 data.]
- 10,547,000 were enrolled in military health care.
- 46,995,000 were counted as "not covered at any time during the year."
- Source: For a complete national and state breakdown see the Income, Poverty, and Health Insurance Coverage in the United States: 2006 report; 2005 comparative numbers
- AVERAGE ANNUAL PREMIUMS FOR COVERED WORKERS, 2007
In general terms, all 50 states regulate and initiate policies affecting health insurance. These statutes, and the Insurance Departments and other agencies that administer them, play a significant role in virtually every state.
The National Conference of State Legislatures (NCSL) has tracked and evaluated activities in several project areas in health care, and has collaborated with or relied on a number of outside experts in this field.
The list in the right-hand column includes links to several current NCSL projects and publications. In addition, the internal and external resources listed below provide further details.
NCSL Resources:
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Health Committee Session- April 25, 2008
Covering High-Cost, High-Risk People: Whose Responsibility? |
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State interest in both health "reform" and health cost savings creates special challenges for covering patients considered "high risk" and high cost. The sickest 10 percent of our population often cost tens of thousands of dollars annually, accounting for over 60 percent of U.S. health spending. Yet a cancer survivor may have low annual costs but be uninsurable. How should these people be treated by insurance market underwriting practices? What are the roles of state-sponsored high-risk pools, the health insurance industry, government, providers and the high-cost individuals themselves in providing and paying for care? Two national experts share facts and recent thinking. Presenters: SESSION PODCAST - Listen here 
Karen L. Pollitz, Project Director, Health Policy Institute, Georgetown University , Washington, DC - [  Slide Presentation]
Facilitator: Representative Susan King, Texas House of Representatives |
State Laws and Recent Legislation:
Health Savings Accounts: State Legislation 2004-2008 - Overview of state actions since the creation of HSAs, updated 2/08.
2007-08 Comprehensive Health Care Reforms: Side-by-Side Comparisons
Small Business Health Insurance: An Overview - NCSL reports, updated 2008
Managed Care State Laws and Regulations, Including Consumer and Provider Protections - NCSL Tables of laws in all 50 states - updated 2008
State Insurance Mandated Coverage - Updated: 2008
More Churches Start Paying For Health-Care Services, Leaving States To Confront The Question: Are These Groups Insurers? - State Health Notes-5/23/08
Changing Definition of 'Dependent': Who is insured and for how long? - NCSL tracking report on bills and laws. Updated regularly, 2008.
Federal Rule for Nondiscrimination and Wellness Programs in Health Coverage in the Group Market - NCSL Federal Affairs update, effective 7/1/07.
Health Care Costs & Spending: Latest State Strategies for Reform - Presentation by Richard Cauchi, NCSL for the Iowa Legislative Commission on Affordable Health Care Plans for Small Businesses and Families, 9/19/07. [ PDF 36 pages]
"Consumer Driven Health Insurance: New State Solutions in 2006?" NCSL session at Spring Forum, April 6, 2006. Funded in part by the Robert Wood Johnson Foundation & the NCSL Critical Health Areas Project CHAP) Speakers:
- Paul Fronstin [PowerPoint download / slides] Ph.D., Director, HRET, Employee Benefit Research Institute
- Tracy Cassidy Watts [PowerPoint download / slides], Principal, Healthcare and Group Benefits, Mercer Co.
- Simmi Singh [PowerPoint download / slides], VP, Cognizant Technology Solutions, Chicago, IL
Individual Coverage, a State Health Lawmakers' Digest - published 7/05.
Health Care Reform and Finance by Professor Uwe Reinhardt - Plenary Session speech at NCSL Annual Meeting, August 19, 2005 in Seattle (80 slides in PDF | Audio Link | Video Link.
Disclosure of Employers of Medicaid Enrollees: 2005-07 bills in states debating the disclosure and reporting of employers of Medicaid beneficiaries.
Additional Recent Reports and Resources (non-NCSL):
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"How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007" - The number of underinsured U.S. adults—that is, people who have health coverage that does not adequately protect them from high medical expenses—has risen dramatically, a Commonwealth Fund study finds. As of 2007, there were an estimated 25 million underinsured adults in the United States, up 60 percent from 2003. Health Affairs Web report, 6/10/08. [11 pages PDF]
> Charts, PowerPoint by Commonwealth Fund, 6/10/08.
"How Private Coverage Works: A Primer, 2008 Update" It discusses the fundamental aims of private health coverage and sorts out the complicated web of state and federal regulations that govern it. Published by Kaiser Family Foundation, 4/21/08. [27 pages ]
"State Health Care Reform: Key Questions and Answers" - A free-market rebuttal and analysis by the National Center for Policy Analysis, 4/08. [43 pages ]
"Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes" - General Accountability Office (GAO), Released 4/30/08.
"Health Care Costs 101, 2008 Edition" - a user friendly set of graphs and charts based on CMS data and estimates in 2008. It "shows that while health care spending growth has slowed, if left unchecked, it will represent 19.5% of the U.S. GDP by 2017." Released by the California HealthCare Foundation, 4/08. [27 pages ]
"Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming To Medicare" - CMS staff analysis as published in Health Affairs web article, 2/26/08. |
State Insurance Departments - web sites and contacts. Compiled by NAIC, 2007.
Health Insurance Coverage Status and Type of Coverage by Selected Characteristics: 2006 & 2007 (US Census Bureau; updated as published 3/08)
U.S. Supreme Court Allows Employers To Continue Reducing Health Care Benefits for Medicare-Eligible Retirees - On March 24 the Court "gave employers a green light to reduce health benefits for millions of retirees who turn 65 and become eligible for Medicare. The justices turned away a legal challenge from AARP, the nation's leading senior citizens lobby, which had contended these lower benefits for older retirees violated the federal law against age discrimination." Article by Los Angeles Times/Kaiser Network 3/25/08.
Improving the value and cost of US health benefits: Could shifts in the employer role provide the solution? - An overview from Mercer, the commercial benefits advisory company. 1/25/08.
2008 Segal Health Plan Cost Trend Survey. Projected declines reflect 5th year of lower medical trends. "Surprisingly, trends for prescription drug coverage are projected to decelerate most - to levels similar to trends for medical coverage for the second consecutive year. Prescription drug projected trends have declined dramatically, by nearly nine percentage points, since their high of 19.5 percent in 2003." Published 10/07. PDF
The Impact of Guaranteed Issue and Community Rating Reforms on Individual Insurance Markets - by AHIP, 9/07.
Increasing Numbers of Insured Workers Required to Meet a Deductible - The number of workers with plans that require that a deductible be met increased from 48% in 2002 to 64% in 2005. Medscape Business of Medicine, 1/08.
Health Insurance Coverage Status and Type of Coverage by Selected Characteristics: 2005 & 2006. (US Census Bureau; updated as published 3/07)
Employer Health Benefits 2007 Annual Survey- This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including changes in premiums, employee contributions, cost-sharing policies, and other relevant information. Versions: News Release | Summary of Findings | Chart Pack | Cost of Health Insurance (Sec. 1) | - by Kaiser Family Foundation, The Center for Studying Health System Change and Health Research and Educational Trust; Published 9/11/2007.
Security: What Americans Want from a Job A new poll shows that health insurance and security are at the top of Americans’ list of desirables in a job, while pay ranked much lower. The national poll, conducted by Princeton Survey Research Associates for the Center for State and Local Government Excellence, surveyed 1,200 adults age 18 and older. Participants were given a list of 15 benefits and characteristics that may be important in choosing a job. 1/3/08.
Mass. panel approves changes to subsidized residents health plan - Coverage costs rising. - Boston Globe, 12/14/07
California Employer Health Benefits Survey, 2007, online survey results, a joint project of the California HealthCare Foundation and the National Opinion Research Center. 12/17/07.
Employers Tap Incentives to Encourage Wellness Program Participation, Survey Suggests. A survey presented at a national health insurance industry meeting suggests that U.S. employers are using more sophisticated strategies to encourage employee participation in health and wellness programs, Healthcare IT News reports.
Health Insurance: Overview and Economic Impact in the States | PDF full report, 64 pp. - A compendium of reference information on health insurance in the states. Published by America's Health Insurance Plans (AHIP), 12/06.
Abstract of 2007 Segal Health Plan Cost Trend Survey - by Segal & Co, 12/06.
"The Illusion of Coverage: How Health Insurance Fails People When They Get Sick" - report by The Access Project, 5/14/07.
"Workers With Employment-Based Health Benefits Steady Over Time" Release;
Employment-Based Health Benefits: Access and Coverage, 1988-2005
Research from EBRI, 3/07.
Federal: President Bush's 2007 Health Plans: The President used his January 23 State of the Union address to tackle the rising cost of health care with two elements: According to the White House, "The President's plan will make private health insurance more affordable and increase the number of Americans with health insurance. The plan will also help our Nation move away from reliance on government-run health care and toward a system in which Americans have better access to basic, affordable private insurance, and increased ownership of their medical decisions."
- White House news release 1/23/07.
1) All Americans will get the same tax break -- to help low-income people buy health insurance with the government also offering a new tax deduction for people buying health insurance on their own
2) Health insurance would be considered taxable income, meaning tax increases for some workers whose health plans cost significantly more than the national average. For single individuals the first $7,500 of insurance would be non-taxable as a "standard deduction.' Families would have the first $15,000 annually be non-taxable. The basic concept is that employer-provided health insurance, now treated as a fringe benefit exempt from taxation, would no longer be entirely tax-free. Workers could be taxed if their coverage exceeded limits set by the government.
3) The Affordable Choices Initiative – Coverage For Vulnerable Americans
(not covered here-- see other NCSL and health resources)
“I will propose a tax reform designed to help make basic private insurance more affordable,” Mr. Bush said in his weekly radio address on Saturday, “whether you get it through your job or on your own.”
The New York Times described this as "The proposed plan is a startling move for a president who has repeatedly vowed not to raise taxes. " Excerpt from [New York Times 1/21/07]
> White House Release: Affordable, Accessible, And Flexible Health Coverage 1/23/07
These health reports provide some background on premiums and taxes:
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www.healthinsuranceinfo.net - Consumer Guides for Getting and Keeping Health Insurance
Changes in Employees’ Health Insurance Coverage, 2001-2005, examines the underlying reasons behind the decline in employer-sponsored coverage among employees. Almost half of the decline was due to a loss of employer sponsorship with another quarter of the decline due to lost eligibility for benefits or lost access as a dependent of another employee. The remaining quarter of the decline was due to an increase in employees not participating in the offer of coverage. The paper also finds that two-thirds of newly uninsured employees between 2001 and 2005 were from low-income families. Kaiser, 10/19/06. [16 pages PDF]
Milliman Survey Foresees 2007 Lowest Health Insurance Rate Increase in 7 Years - The 2007 estimated January renewal increase of 9.7% for Health Maintenance Organizations (HMOs) is 0.9% lower than last year’s survey result of 10.6%, and down 7% from four years ago. Preliminary results for Preferred Provider Organizations (PPOs) show an anticipated 2007 renewal rate increase of 10.7%, or 1.0% lower than last year but 1.0% higher than HMOs. News release, 7/18/06. [2 pages PDF].
Health benefit cost growth will slow again in 2007 according to preliminary survey findings released by Mercer Health. After changing plans or making plan design changes, employers so far project an average increase of 5.6%. Released 9/11/06. [2 pages]
"Employers Willing to Do More to Cover Workers" - Despite fast-rising health care costs, employers that offer health benefits to their workers say they are committed to the current employer-based health insurance system. Commonwealth Fund report, 11/06
Wisconsin Managed Care Review 2006 finds: Hospitals and HMOs Enjoy Strong Profits; Exodus of Employers from HMOs Continues (summary) - released by Allan Baumgarten, 12/06
Michigan's Managed Care Review 2006 (summary) - released by Allan Baumgarten, 8/06
Insurance Coverage Of Biopharmaceuticals -"breakthrough biopharmaceuticals pose a difficult challenge to existing arrangements for financing care because of their high costs, the small patient populations they often serve, and problems in measuring their incremental therapeutic value..." Health Affairs, Sept/Oct 2006.
Workers' Health Insurance: Trends, Issues, and Options to Expand Coverage by
Paul Fronstin, Employee Benefit Research Institute, 2/06
Competition in Health Insurance: A Comprehensive Study of U.S. Markets - an American Medical Association (AMA) report finds a steep decline in competition in the nation's health insurance markets. Summary; full text. 4/17/06
Recent Growth in Health Expenditures report by the Health Policy Center of the Urban Institute, 3/06
Employers Expect Rate of Increase in Health Benefit Costs to Slow in 2006 report by Watson Wyatt, National Business Group on Health Survey results, 2/15/06. [Full survey released 3/06]
Employer Health Benefits 2006 Annual Survey - [For comparison to 2007] Last year's survey of employers provides a detailed look at trends in employer-sponsored health coverage, including changes in premiums, employee contributions, cost-sharing policies, and other relevant information. This year the survey also documented the prevalence of high-deductible health plans associated with a savings option. Versions: News Release | Summary of Findings | Chart Pack | Cost of Health Insurance (Sec. 1) | Health Affairs article: Health Benefits In 2006. [10 pages PDF].
Researchers at the Kaiser Family Foundation, The Center for Studying Health System Change and Health Research and Educational Trust designed and analyzed the survey. Published 9/26/06.
Proposed NCQA Measures Hold Promise for Bringing Health Care Quality, Satisfaction Data to as Many as 130 Million - report by NCQA 6/13/06.
Managed Consumerism in Health Care - Health Affairs, November 2005.
State Efforts to Insure the Uninsured: An Unfinished Story - Rand Survey, 2005 PDF.
The Best Of Times And The Worst Of Times: Tennessee Blue Cross/Blue Shield. The CEO describes investment in information technology, pricing policies, and management of new clinical technologies; and explains the continued political popularity of a profitable nonprofit health plan. Health Affairs, 11/29/05. (8 pp PDF)
Private Health Insurance: Number and Market Share of Carriers in the Small Group Health Insurance Market in 2004 U.S. General Accountability Office GAO-06-155R 10/13/05.
Health Insurance Coverage: Estimates from the National Health Interview Survey, 2004 | News Release - published by the Centers for Disease Control and Prevention, 6/2005 - [19 pages, PDF].
Health Insurance Coverage by Age: 1987 to 2004—Tables on pages 59-78 Published by US Census Bureau, August 2005.
"Choice" in Health Care: What Do People Really Want? examines Consumer-Directed and HSA options. By Jeanne M. Lambrew, Ph.D., The Commonwealth Fund, 9/19/05 - | Press Release | (printer-friendly version).
The Outlook for National Health Care Spending
According to the report issued February 23, 2005 by staff at the Centers for Medicare & Medicaid Services (CMS), the rate of health care spending in the United States is projected to grow 7.5 percent in 2004, down from the 7.7 percent growth experienced in 2003. Total health care spending is projected to be $1.8 trillion in 2004.
US Health Spending Projections - Health Affairs article includes useful statistics and summaries of health insurance, Feb. 2005.
Growth in Medical Costs for Health Insurers Slowing, According to Earnings, Forecasts - Kaiser Networks report on WSJ 8/12/05.
"HMOs Propose Lowest Rate Increases in Five Years." Preliminary analysis indicates that HMO rates will increase approximately 12.4 percent nationally in 2006 -- representing the lowest rate of increase in more than 5 years -- according to global human resources services firm Hewitt Associates. Released 6/9/05. Regional rate charts for 2004-2006, ].
What High-Deductible Plans Look Like: Findings from a National Survey of Employers. Abstract - published by Health Affairs, 9/14/05. [8 pages ]
America's Health Insurance Plans (AHIP) - the trade association for insurers has a comprehensive web site, updated regularly.
Reinsurance: How States Can Make Health Coverage More Affordable for Employers and Workers, Commonwealth Fund report, 7/05. |
Featured NCSL Links
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