Can the Health Safety Net Withstand a Recession?

Many analysts are concerned that the nation's health care safety net will be overwhelmed by "millions" of people who could lose their jobs or become uninsured if a recession hits -- a greater possibility following the attacks on the World Trade Center and the Pentagon, National Journal reports. Several members of Congress are working to add "emergency" health care provisions to an economic stimulus package being prepared for consideration. Sens. Max Baucus (D-Mont.) and Edward Kennedy (D-Mass.), for example, have proposed expanding Medicaid eligibility and subsidizing COBRA. Under COBRA, employees who are laid off or leave their jobs can still keep their insurance coverage, but have to pay 102% of the premium, a cost that is often prohibitive for those without a steady income. These measures, however, might not be enough to address the underlying flaws in the health safety net, which is "actually significantly weaker in its ability to respond to a recession today than in past recessions," Robert Greenstein, executive director of the Center on Budget Policy and Priorities, said. Declining revenues and increasing health costs have already led many states to scale back their Medicaid programs, and further cuts, including narrowing eligibility, may be in store if the economy worsens. Diane Rowland, executive director of the Kaiser Family Foundation Commission on Medicaid and the Uninsured, said, "Goodness knows where the money will come from. No state is yet talking about cutting back on eligibility. But I think there will be some hard looking at revenues in the state budgets."

Another potential problem is that the war on terrorism may require nurses, doctors and pharmacists who are in the military reserves to leave already-underserved regions, such as rural and inner-city areas. Premier Inc., a coalition of 1,800 not-for-profit hospitals, has asked HHS Secretary Tommy Thompson to consider using medical personnel from HHS' Public Health Service -- "such as physicians and nurses at the NIH" -- to "fill in as necessary" in areas where a medical shortage exists. According to Herb Kuhn, Premier's corporate vice president for advocacy, shortages resulting from counter-terrorist activities could be worse than those seen during the Gulf War, because hospitals are "already short-staffed" (Serafini, National Journal, 9/29).