Overview

While 45 million Americans lacked health insurance in 2005, the rate of uninsured continues to increase due to factors including rising health care costs and decreasing employer-based coverage.

Due to its broad scope and complexity, the lack of health insurance in America does not have a quick fix. However, to address the problem of the uninsured, several states have enacted plans or are considering proposals to increase coverage and access for many Americans.

Below are several innovative themes that states have begun to use to increase access to coverage through employer-based insurance and individual purchasing.

Universal Coverage
Many states have taken steps to incrementally increase coverage leading to universal access, and some states are offering multiple coverage initiatives to extend health insurance coverage to uninsured populations.

"Connector" or "Exchange" Model
A "connector" or "exchange" model offers health coverage through a quasi-governmental authority that pools insurance together to offer affordable, private insurance options. Most "connectors" consolidate the small group and individual markets into the pool. Many states are offering subsidies for low-income individuals to purchase health insurance through the "connector."

Tax Incentives through Section 125 Plans
Section 125 of the IRS tax code permits tax-free deductions of health insurance premiums from workers' paychecks. Many health reform plans are requiring employers to offer their workers the option to deduct health insurance premiums tax-free. This option is generally paired with a "connector" model.

Employer Fees/Taxes
Some states have required employers to either offer insurance to their workers or pay the state a fee. Generally, those states requiring employer contributions are those aimed at achieving universal coverage.

Individual Mandate
A few states have aimed to make it mandatory to have health insurance coverage. Through tax filings, individuals who can afford coverage and are found not to have insurance will be fined.

Quality Measures as Part of Coverage Expansions
In implementing coverage expansions or Medicaid redesigns, many states have incorporated quality and transparency measures to improve efficiency and patient care along with expanding coverage to the uninsured.

Prevention and Wellness Benefits
Many states are requiring certain preventive benefits to be included in the basic coverage package in order to promote healthier living. Some states are also incorporating health promotion benefits into their state employee health insurance plan, into their Medicaid redesign, and into their small group and individual markets.