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Don’t Set a Low Bar for Health Care Reform

Two new alliances are supporting health reform, but only one focused on affordable health care. That should be the starting point for reform.

Something extraordinary happened this week in Washington. AARP, the Service Employees International Union, and the Business Roundtable united in the common goal of guaranteeing affordable health care for all. Their new alliance, Divided We Fail, demands that government officials fix our nation’s broken health care system. This alliance represents a new partnership between business, labor, and consumers—a welcome development that will help break the political logjam that has stymied health reform.

Yet one day later, the Health Care Coalition for the Uninsured—a coalition comprised of some of America’s largest health care companies, AARP, and the U.S. Chamber of Commerce—released a health reform proposal that falls far short of covering all Americans. Setting the bar low is the wrong place to start amid growing demands among workers and businesses alike for our nation to confront our growing health care crisis.

The new proposal is divided into two phases. Phase One, which the Coalition calls the “Kids First” Initiative and State Experimentation plan, would enroll currently eligible children into Medicaid and the State Children Health Insurance Program, or SCHIP. This step would not expand health care coverage but simply enroll children who are already eligible for these programs.

This first phase would also create a new family tax credit for the children in families with earnings up to 300 percent of poverty, or $60,000 for a family of four. In addition, this phase proposes establishing a state demonstration program that would encourage states to find new ways to expand health care coverage.

The second phase of the Coalition’s new plan would allow states to enroll childless adults with incomes below poverty in Medicaid. The plan would also create refundable tax credits to help individuals and families with incomes between 100 percent and 300 percent of poverty purchase health insurance.

The Center for American Progress believes that well-designed efforts to expand coverage will advance the national debate on health system reform—check out our own proposal for guaranteeing affordable coverage for all. But the Coalition’s proposal does not reach this threshold. Instead, the Coalition is promoting questionable policies that, particularly in today’s budget environment, may threaten proven, effective programs.

The tax credit proposal in Phase One of the Coalition’s plan, for example, would create a financial incentive for states to scale back Medicaid and SCHIP coverage, since it would provide an alternative (albeit likely less comprehensive) coverage mechanism that doesn’t draw on state dollars. The tax credit and state demonstration grant proposals, if they gain political traction, may also threaten future funding for children’s coverage through Medicaid and SCHIP as these programs and proposals compete for scarce federal dollars in the congressional budget process.

The Phase Two proposals also raise concerns. There is no time frame associated with the proposed expansion of Medicaid coverage to low-income adults and premium subsidies for employer-sponsored and individually-purchased insurance. Nor are there guarantees that these proposals represent meaningful promises. States would be allowed, but not required, to provide coverage to low-income adults, while the tax credit proposal is not paired with insurance reforms, purchasing pools, or other mechanisms to ensure that individuals and families can purchase affordable, quality coverage with these subsidies.

Worst of all, though, this proposal represents a missed opportunity. Ideally, consensus among a diverse group of stakeholders would have propelled the emerging national consensus for change. Instead, the Coalition’s proposal fails to make affordable coverage for all Americans a goal, much less offer a specific plan for achieving this goal.

The Coalition’s proposal lowers the bar for real health reform—even though there is growing bipartisan support in Congress, in statehouses, among health care experts, business leaders, and labor and consumer groups in support for this goal. Guaranteeing affordable coverage to everyone is the number one priority. That’s why the appropriately named Divided We Fail alliance got it right this week. They set the bar where the vast majority of Americans expect it to be.

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