June 30, 2009. The Nelson A. Rockefeller Institute of Government released a report this month analyzing the various financing options that states can utilize to fund health coverage expansions. The report, titled “State Financing for Health Coverage Initiatives: Observations and Options,” was prepared by the New York State Health Policy Research Center and concludes by looking at ways to finance health coverage initiatives in New York, where several universal coverage proposals are under consideration.
The report explores three sources of funding for state coverage expansions:
- Federal financing through Medicaid and SCHIP;
- Commonly-used state revenue streams like broad-based taxes and health industry taxes; and
- Revenue sources that are less widely-used, such as employer contributions and the redistribution of health care savings.
The authors do not advocate for a particular financing mechanism. However, they do conclude that New York will likely require multiple sources of funding, because none of the above revenue streams is robust enough to finance universal coverage on its own. They also emphasize that consideration of administrative efficiencies and cost growth reductions will be crucial.
In conducting their analysis, the authors looked at Vermont and Massachusetts as case studies of comprehensive state coverage initiatives, and they examined funding mechanisms employed to support reform in Maine. To do this, co-author Kimberly Fox analyzed field data collected under a SHARE-funded project that she works on with P.I. Elizabeth Kilbreth and others. The SHARE study examines the affordability of state coverage plans in these three states.
Click here to access to full report from the Rockefeller Institute, or click here to learn more about Dr. Kilbreth’s SHARE-sponsored research.