Wall Street Journal
WASHINGTON — Former enemies in health-care reform battles put aside their differences to propose steps to cut the ranks of the uninsured — largely through expanding Medicaid and creating a tax credit for employers.
“Political gridlock should no longer be an option” in dealing with the problem of 43 million uninsured Americans, said Ron Pollack, executive director of Families USA, a liberal advocacy group that backed the Clinton administration’s failed health-overhaul effort in 1993 and 1994.
He was joined by the Health Insurance Association of America, which helped doom the Clinton health-care overhaul plan by airing the “Harry and Louise” television ads, and the American Hospital Association, which is less ideologically driven than the other two groups.
Estimate of Costs
The plan, a framework rather than a detailed proposal, could help as many as 23 million low-income Americans who lack insurance, the groups said. They didn’t provide an official cost estimate but said costs could reach $23 billion a year, an amount they said was affordable given the bulging federal surpluses.
But Congress may not agree, considering competing requests for big-ticket projects, including a prescription-drug benefit for Medicare, the federal program for the elderly.
In developing the plan, the three groups agreed that it shouldn’t disrupt existing coverage and should build on existing structures, such as Medicaid, the state-federal program for the poor and the disabled, and the Children’s Health Insurance Program, which covers low-income children who aren’t eligible for Medicaid.
Focus of Plan
The focus is on people with annual incomes of as much as 200% of the federal poverty level. Under current law, eligibility for Medicaid varies from state to state. But generally, people with children are eligible only if their incomes are well below the federal poverty level. In 32 states, a parent who works at a minimum wage job, making $5.15 an hour, makes too much money to qualify for Medicaid if he or she works full time, according to Families USA’s Mr. Pollack. People without children are eligible only if they are disabled as well as poor. For a family of three, for example, the cap would be $28,300. Under the plan:
* Medicaid would be expanded for all people with incomes of as much as 133% of the federal poverty level, or $18,820 for a family of three. The federal government would provide the states with additional funds.
* States would be encouraged to provide coverage for parents and childless adults with incomes between 133% and 200% of the poverty level through Medicaid or a program like the Children’s Health Insurance Program. The federal government would increase its matching rates to the states.
* Employers would receive a tax credit to help make company coverage more affordable for low-income workers. For example, a business that pays 70% of the premium for its workers would receive a tax credit to pay all or part of the remaining premium for low-income workers who couldn’t pay their share.
Mr. Pollack, who favors aggressive government action on health matters, and HIAA President Chip Kahn, an advocate of private-sector solutions, said the proposal wasn’t the ideal one for either one.
But they said coverage can be expanded only if interest groups compromise.
The proposal is a sharp break in another way. It would provide coverage to low-income individuals without children. Currently, most childless couples, no matter how poor, are excluded from Medicaid coverage in most states.
Reactions Vary
Chris Jennings, a top health-care adviser to President Clinton, called the proposal encouraging.
But Neil Trautwein, director of employment policy for the National Association of Manufacturers, called it a “big-government approach.”
At the other end of the spectrum, Jamie Court, a Santa Monica, Calif., consumer advocate, said the plan wouldn’t work because insurers would block any meaningful cost containment.
