Analysis: A week of focus on the uninsured

By ELLEN BECK, United Press International  |  May 13, 2004 at 5:36 PM
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WASHINGTON, May 13 (UPI) -- (Editors: This is the second part of an analysis looking at the impact of Cover the Uninsured Week. Part 1 covered proposals by President Bush and Republicans.)

Proposals to help the nation's 43.6 million people without health coverage popped up throughout Washington during Cover the Uninsured Week, and while ideas offered by Republicans and Democrats were consistent with party ideology they were hardly groundbreaking.

A Kaiser Family Foundation study released this week estimated caring for the uninsured will cost the United States $41 billion in 2004.

Republican plans to extend health coverage tended toward the tax credit or incentive routes based on the idea that if people had more responsibility in spending their own dollars for healthcare they would become better educated and savvy consumers.

The House Wednesday passed President Bush's plans to expand the flexibility of health savings and flexible spending accounts. Republicans also pushed through a medical malpractice bill that would cap non-economic damages at $250,000 -- which already has been defeated a couple of times in the Senate.

Bush also has proposed tax credits for the uninsured to use to buy private coverage -- which also has gone nowhere on the Hill in the two years it's been offered.

Senate Republicans offered a variety of new proposals, mostly along administration lines but extending other tax credits and incentives to boost the ability of young people to purchase health coverage.

None of the GOP plans, however, including those from President Bush, claimed to be able to cover all the uninsured and there was debate over how many uninsured are so by choice and not because they cannot afford coverage.

Democrats, however, contend 100,000 people a month have lost their insurance since 2001 -- creating a crisis in the United States. Senate Democratic Leader Tom Daschle of South Dakota said studies show the economy loses between $65 billion and $130 billion each year because of the uninsured.

Democrats favored plans that generally built on existing social programs and additional government spending, chiding the administration for failing to provide a comprehensive coverage option. Sen. Bob Graham, D-Fla., said he supports phasing in a type of universal healthcare program over time.

"We know who the uninsured are. We know that nearly 20 percent of the uninsured are children. We know that eight out of 10 uninsured are working families. These are not people who are indolent. They are people who are working hard, typically at low-income jobs, and cannot afford or their employer does not make available to them health insurance," Graham said.

Sen. Dick Durbin, D-Ill., said on the Senate floor part of the problem is that over recent years double-digit increases in the cost of insurance have outpaced the 2 percent to 3 percent rise in wages. It's a hot labor issue all over the country.

"These are not lazy people, stretched out on the coach, watching soap operas and eating chocolate covered cherries," he said. "If you go to virtually any city in America and ask why workers are on strike, why they are involved in a long contract dispute, you will find the underlying cause is an insurance dispute."

Durbin said that is not, however, the reality of what goes on in the Senate because in eight years there has been no serious discussion about what the nation can do to help make insurance more affordable. "This Congress is afraid to act," he said.

Daschle this week introduced a resolution to allow every American access to the Federal Employee Health Benefits Program by 2006 -- at the same price members of Congress pay or less.

"If it's good enough for Congress, it's good enough for every American," Daschle said in announcing the plan.

Durbin, Sen. Blanche Lincoln, D-Ark. and other Democrats support the idea and Durbin said the FEHBP should allow creation a larger pool of health coverage for small businesses and groups.

The FEHBP covers about 10 million federal workers and gives people a set government subsidy to help pay for one of a number of health plans offered -- all with varying premiums and benefit levels.

Some healthcare experts question whether the FEHBP could be successfully expanded intact to millions of additional members. Many of the coverage offerings are from Blue Cross Blue Shield plans and some also worry about giving the Blues too much control over such an expanded system.

"This is a far cry from the associated health plans that some folks talk about," Lincoln said in defense of the FEHBP idea.

The House Thursday took up associated health plans, which would allow industry associations to sponsor health plans their company members could offer to workers. Democrats oppose AHPs because the legislation would exempt such plans from state insurance laws. They also fear that would allow cherry-picking by plans of only healthier enrollees and drastically limited coverage.

Daschle said many Democrats believe the best and fastest way to deal with the uninsured is to "allow the programs that currently are on the books to work better."

To that end, House Democrats Wednesday outlined three proposals they said would cover 21 million uninsured people.

The FamilyCare Act would expand Medicaid and States Children's Health Insurance Program to cover more parents of eligible children. The Medicare Early Access Act would give Americans between the ages 55-65 an option to buy into Medicare with an advanceable, refundable tax credit for 75 percent of the premium. The Small Business Health Insurance Promotion Act would offer small business owners and the self-employed four years worth of 50 percent tax credits to purchase insurance, while at the same time creating permanent state and national multi-insurer pools.

"With the economy as it is, coupled with the escalating federal deficits, we need to focus on proposals that give us the most bang-for-the-buck while giving families the health security they need," said Rep. Henry Waxman, D-Calif.

The apparent Democratic presidential nominee, Sen. John Kerry, D-Mass., has combined many of the Democratic proposals in his healthcare package, which he touted in campaign stops this week.

Kerry would create a premium rebate pool to reimburse employee health plans for 75 percent of catastrophic costs above $50,000, as long as savings go toward reducing employee premiums. He would provide for automatic enrollment in SCHIP of any eligible child and extend coverage to working poor parents. Refundable tax credits of up to 50 percent would go to small business to purchase healthcare coverage for workers. Individuals without access to employer group coverage would be allowed into a special FEHBP pool.

Outside of Washington and away from politics, other groups have proposed plans as well.

The American Medical Association this week said its plan would cover about 95 percent of Americans. AMA President Dr. Donald J. Palmisano issued a statement that said: "The AMA advocates a solution to the uninsured crisis that builds on the strengths of our current system. We believe that a health care system based on a mix of private and public sector financing will best benefit the uninsured, improve quality, restrain costs, and expand patient choice and individual purchasing power."

To that end, the AMA proposed ending the tax exclusion provision for employer-based health insurance and replacing it with tax credits large enough to make health insurance affordable.

The Institutes of Medicine earlier this year issued a report saying healthcare coverage in the United States should be universal, affordable to individuals and families, sustainable for society, and able to enhance health and well-being.

Waiting in background of this week's discussion are some 17 plans, by various health policy experts of all political persuasions, to provide health coverage for some or all of the uninsured.

Last fall the Economic and Social Research Institute's Covering America Project outlined the first 10 proposals. ESRI founder and president Jack Meyer said the plans were not politically based but relevant to the political discussion.

They would cover from 12 million to 40 million people -- the more people covered the higher the cost and the more controversial the elements of coverage. The plans would add from 1.5 percent to 3.7 percent to the $1.7 trillion the United States already spends annually on healthcare.

"To cover all or nearly all of the uninsured we'll likely have to place requirements on companies to fund healthcare for workers, requirements on individuals to obtain coverage or some guaranteed health coverage through a type of national health plan," he said at the time. "Clearly these approaches would have some adverse side effects and will

generate serious opposition in the political arena."

Other plans included some elements proposed by both Republicans and Democrats this week: building on existing public programs for the poor, tax credits and insurance pools.

Last year Sen. John Breaux, D-La., threw his support to a plan that would combine government subsidies, mandates for businesses to either offer coverage or pay their employees to buy it themselves, and private insurance. This centrist plan attempts to tie the political right and left together in a compromise that would cover everyone through mandatory health insurance -- much like is required for U.S. drivers.

For years what to do about the uninsured was a discussion for policy experts and think tanks. Cover the Uninsured Week did not lead to agreement on a plan to solve the problem but it did help bring the discussion to the national table.


Ellen Beck is UPI's Healthcare Policy Editor. E-mail

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