Meeting the Challenge of the Uninsured

The New Year has begun with a renewed focus on the problem of the uninsured. Yesterday, Sen. Tom Daschle indicated its high priority and Sen. Bill Frist has organized a task force on the problem. Congress created a Citizens’ Health Care Working Group last month. This interest is welcome but meaningless if its outcome is additional studies or searches for solutions. We know that 44 million Americans lack health coverage. The Institute of Medicine has carefully documented the dire consequences of this problem. And, solutions abound, including many proposals from “strange bedfellow” partners from the political left and right. In addition, key Democrats from Sen. John Breaux to Rep. Pete Stark and the main Democratic Presidential candidates have put forth proposals that reach across the ideological divide to reduce the number of uninsured while preserving existing coverage. The challenge to the Republican Leadership and the president is to demonstrate the same flexibility and commitment needed to make progress on this serious problem.

Taking a closer look at the election-year health coverage proposals, each Democratic candidate claims that his or her plan is unique and the best. Yet, most of them all share a mix of traditional Democratic ideas and new elements that have appeal across party lines. Like most Democratic plans before them, these plans, first, rely on public programs to cover the lowest income and most vulnerable populations. Federal and state efforts to expand Medicaid and the State Children’s Health Insurance Program (CHIP) have been successful at reducing the number of uninsured. Second, they promote private group health insurance. The idea behind group health insurance is that communities of people share the risk of any individual incurring high health care costs. Beyond its social value, group coverage has the added benefit of avoiding the need to regulate insurance to make it affordable and accessible. Third, they recognize the reality that cost is a major reason why people lack health insurance. As such, each plan makes a significant investment essential to any strategy to lower the number of uninsured Americans.

In addition to these core elements, the Democratic health reform plans share several new characteristics that create broader, bipartisan appeal. These include:

  • Use of tax credits alongside of public program assistance. Historically, Republicans have exclusively used tax policy and Democrats have exclusively used public programs to expand health insurance. In the current context, many of the Democratic plans adopt both approaches. These “hybrid” plans reflect an interest in helping middle-income people not easily assisted through public programs. They also reflect an understanding that achieving bipartisan support probably requires the inclusion of tax credits.
  • Innovative approaches to improving health insurance accessibility and affordability. The plans adopt public and private techniques that have proven successful in different arenas. Several of the plans, for example, use Federal reinsurance and risk adjustment to shield individuals from paying for high-cost members of the group health insurance pool. Other plans include aggressive “default enrollment” systems to prevent people from falling through the cracks by failing to sign up for health coverage.
  • Focus on preserving coverage. The proposals include financial incentives, disincentives and other policies to maintain rather than erode employer-sponsored and public coverage. None (but the single-payer plan of Dennis Kucinich, Carol Mosley Braun and Al Sharpton) significantly disrupt current coverage arrangements; instead, they layer options and assistance on top of the current system. In addition, the plans focus on providing meaningful health benefits rather than high-deductible/high-cost-sharing plans. The goal of protecting coverage is more distinct in these plans than in those of the early 1990s, perhaps reflecting recent erosions of employer-based coverage and benefits.
  • Pragmatism. The plans are notable for their restraint as well as their size. While all of the Democratic plans make significant inroads into the problem of the uninsured, few are truly universal coverage plans. Universal access has replaced universal coverage as the theme. In addition, the idea of a single-payer system – popular in the early 1990s – has not been central in this debate. And while they all make significant investments (from $600 to $900 billion over 10 years for all but two plans), these costs are less than twice the recent $400 billion investment in a single Medicare benefit – prescription drugs. Most of their price tags pale in comparison to the cost of the president’s 2001 tax cut. Overall, the plans’ delivery systems, subsidy systems and investments reflect pragmatism rather than ideology.

The evolution of ideas reflected in these plans stands in sharp contrast to the president’s approach to reducing the uninsured. The president has included the same $1,000 capped tax credit for individual health insurance in his budget year after year. Despite its relatively low cost of $89 billion over 10 years, it has not found its way into any tax cut law passed by the Republican Congress and signed by the president. The low priority assigned to this policy may actually help health coverage in the long run. Studies suggest that this plan would undermine existing employer-based coverage – as would the health savings accounts (HSAs) passed in the recent Medicare legislation. Even more troubling is the president’s Medicaid reform proposal included in his FY 2004 budget. It would block grant Medicaid funding, reducing the Federal financial and coverage commitment for our most vulnerable citizens. Stated simply, these proposals provide modest benefits at a potentially great human cost and violate the principle of “do no harm.”

History and example suggest that we can do better than this. In the U.S., we have succeeded in providing universal coverage to our nation’s elderly, universal access to low-income children, and broad-based coverage in a subset of states. Other comparable nations have eradicated this problem and remained globally competitive and fiscally solvent. And, as discussed, it is not the lack of ideas, innovation, or willingness to compromise on the part of Democrats that has blocked progress on the problem. Indeed, Democratic proposals offer several diverse pathways towards achieving the goal of increasing health coverage.

The challenge, then, is to the president and Congressional Republicans to show similar commitment and flexibility. This can be assessed in simple tests: Will the Frist Task Force produce paper work or workable plans? Will such plans reflect ideology or creative solutions that build on what we know works? Will the president shift away from policies that potentially do more harm than good? Will interest in the uninsured turn into a commitment that achieves results? Affordable access to meaningful health coverage is a goal that should transcend political boundaries. Hopefully, in 2004, it will.

Jeanne Lambrew is a senior fellow at the Center for American Progress.

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