California

A Framework for Evaluating

Health Care
Foundation

Approaches to Cover the Uninsured
More than 46 million Americans

lack health insurance. Many types of proposals
to cover the uninsured are being offered at

both the state and federal levels. Understanding
and assessing the different proposals is often
difficult. One reason is chat the proponents of
any particular approach naturally emphasize
advantages but frequently downplay the disad
vantages. Any reform model gives priority to
certain objectives but requires compromises
with respect to others. Too often, the debate
about policy options is confusing because the
choices—or trade-offs—between competing

3. Fairness and Equity: Does the proposal
promote fairness and equity?
4. Choice and Autonomy: How much choice
does the proposal permit?
Each attribute is described in detail here.

Coverage
The coverage attribute includes a number of
related considerations, such as who is covered
and which benefits are offered.

People Covered

■ How many people will be covered who

objectives are not explicit or clear.

previously were not.

This handout provides a “framework” fo r assess-

ing and comparing coverage expansion proposals
that is designed to make the trade-offs clear. The
framework is a valuable tool for policymakers
and other stakeholders who are involved in

developing solutions. For a detailed application
of this framework to various proposals, such
an employer mandate, a single-payer program
tax credits, and public program expansion
as

see

■ Which particular populations will be newly
covered and which will nor (for example,
most needy vs. less needy).

■ Access to care (for example, language or
culture differences, geographic distance,
physical barriers for people with disabilities).
Portability of Coverage and Continuity
of Care

www.chcforg/framework.

a Portability of coverage (maintaining
The framework is made up of four primary
“attributes” that are reflections of major areas of
when people assess coverage expansion
concern

coverage as life circumstances change),
a Continuity of care (maintaining relation
ships with health care providers over time).

proposals;
I. Coverage: Who is covered and how

comprehensive is the coverage?
2. Cost and Efficiency: Is the proposal
efficient and economically practical?

Benefits

H Which services are covered and to what
extent.

■ Consumer cost-sharing and other financial
limits that could affect accessibility.

January
2006

Access to Coverage and Subsidies
■ Effect on who are the “winners and losers”: who

■ Consumers’ and employers’ choices among
health plans.

is covered by government programs or eligible for
subsidies, and who is not.

■ The horizontal equity principle requires equal
subsidies for equally needy people, including
those who already have coverage (though that
may be more costly). The vertical equity principle
requires that more needy people get larger
subsidies.

Provider Autonomy

■ Effect on the prices providers charge or
the reimbursement they receive (economic
autonomy).

■ Degree to which providers are able to practice
medicine without outside constraints or control

(clinical autonomy).

Financing of Costs

Government Compulsion or Regulation

■ Who pays the bill for the subsidies and how the

■ Degree of government intervention and control

tax burden is distributed relative to income.

H The principle of vertical equity requires that the
burden of a payment be distributed according
to ability to pay, while horizontal equity requires
that people with equal incomes contribute essen
tially the same amount.
Sharing of Risks

■ Extent to which premium costs are based on risk

of needing health resources, which may range
from people paying for coverage based on their
own health status to all insured people paying
the same rate (“community rating” approach).

over consumers, employers, providers, or health
plans.
■ Are mandates established for individuals to

obtain coverage; employers to pay for coverage;
or health plans to participate in particular
purchasing arrangements.

Key Trade-offs Among Attributes
Designing a coverage expansion policy is essentially
the process of making choices about trade-offs. If
trade-offs were not necessary, getting agreement on
an approach would be relatively easy because most
people agree on what is desirable and undesirable,

other things being equal.

Choice and Autonomy
Issues under the choice and autonomy attribute
include how choices are affected for patients and
providers, and to what degree patients and providers
are subject to rules and regulations regarding the
use of various medical services, such as specialized
physician visits and diagnostic tests.
Consumer Choice of Providers and
Health Plans

■ Consumers’ choices among providers and
provider networks.

Almost everyone would approve of a reform that

covered all needy people, cost little, had comp
hensive benefits, ensured high-quality care, treated
everyone equitably, maximized choice and autonomy,
and involved minimal government regulation or
compulsion. But, of course, there is no such policy
because the achievement of all these objectives leads
re-

to conflicting results.

Table 1, on the following page, lists some typical
trade-offs that may affect the design of coverage
expansion.

A Frameworkfor Evaluating Approaches to Cover the Uninsured i 3

Fact Sheet for Employers on Optional Santa Clara County
Adult Health Insurance Expansion Project
1. What is the adult health insurance expansion project?

The adult health insurance expansion project is a local effort to expand health
care coverage to uninsured working adults in Santa Clara County. This program
would be an optional employer-based program where eligible employers and
workers could buy into the plan at an affordable premium.
2. Who would be eligible to participate?
• Working adults between 19-64 years of age, who live and work for a small
business in Santa Clara County,
o Workers earning approximately $15.00/hr or below would receive a
discounted premium. There are approximately 41,000 workers in
the county who would be eligible for a discounted premium,
o Workers earning above $15.00/hr would pay a moderately higher
monthly premium.
• Small businesses in Santa Clara County that employ 50 or fewer workers.
Small businesses must have gone 12 months without offering health
insurance coverage. There are approximately 28,000 firms in Santa Clara
County that employ fewer than 50 workers.
3. What benefits would be offered under this insurance plan?

This plan would provide a comprehensive health insurance plan and include
outpatient, inpatient, prescription drug, emergency and specialty care. The
program would likely include modest co-pays($io-$i5). Dental and vision will
be excluded.

4. Where could enrollees obtain servdces?

All participants of the program could receive services at Valley Medical Center or
participating community clinics or through another provider if funding becomes
available.

5. How much would this optional health plan cost?
The cost of health insurance would be split by- the worker, employer and the
community.

• The cost to the worker to participate would likely be $50/ month.
• The cost to the employer would likely be in the range of $i25-i75/month.
• The community share would likely be a discounted plan provided by the
Santa Clara Valley Health and Hospital.
6. Who would administer the program?

The program would likely be administered by the Santa Clara Valley Health and
Hospital System.