HEALTH CARE - A Dozen Key Players

By Marilyn Werber Serafini, National Journal
© National Journal Group Inc.
Saturday, July 17, 1999

	      Here are some of the politicians, policy analysts, and 
industry representatives working on proposals to reduce the 
number of uninsured Americans. 
Rep. Dick Armey, R-Texas 
	     Armey hadn't been considered a leader on health care 
issues, but he has been delving into the issue in recent months-- 
and raising hopes that bipartisanship is possible. Armey 
announced in May that he was working on a bill to offer 
individuals who can't get health insurance from employers a 
refundable tax credit to buy coverage on their own. Armey's 
proposal envisions an annual subsidy of $ 1,000 for individuals 
and $ 3,000 for families. He's emphasizing tax equity, arguing 
against the current system, which gives employers the biggest tax 
breaks for workers with the highest incomes. Armey spent months 
trying to agree on draft legislation with liberal Rep. Fortney H. 
''Pete'' Stark, D-Calif., but their talks recently broke down. 
Stark wanted to require insurers to take all applicants, and 
Armey did not. Armey is searching for another Democrat to join in 
a bipartisan approach. 
Grace-Marie Arnett 
	     Arnett is president of the Galen Institute, a nonprofit 
research organization in Alexandria, Va., and coordinator for the 
Health Policy Consensus Group, a collection of 18 health care 
analysts. Arnett and other leading health care analysts have 
advocated changing the way the tax system treats health insurance 
since 1994, when the Health Security Act faltered. With the 
Heritage Foundation and the Cato Institute, the Galen Institute 
sponsored a retreat for congressional aides last November. ''We 
did a daylong look-through of visions, and the community began to 
see that tax credits for the uninsured is a win-win situation,'' 
Arnett said. In June, Arnett organized a press briefing 
highlighting support within the consensus group for tax credits. 
The group has put together a book that will be published this 
summer, called Empowering Health Care Consumers Through Tax 
Reform. 
Stuart Butler 
	     As vice president for domestic and economic policy 
studies at the Heritage Foundation, a conservative think tank in 
Washington, Butler is giving some conservatives the comfort they 
need to back the tax credit concept by giving it his stamp of 
approval. And, in an unusual role, the foundation has held out 
the olive branch to liberals to demonstrate the potential for 
bipartisanship on this matter. Heritage hosted a lecture in May 
that brought liberal Rep. Jim McDermott, D-Wash., and 
conservative Rep. James E. Rogan, R-Calif., to the same stage to 
talk about tax credits. The two have co-sponsored a health care 
tax credit bill. Butler and others at Heritage have advocated the 
idea of health care tax credits for years. Butler said in recent 
testimony before the House Ways and Means Committee that a credit 
should be structured so that employers are not encouraged to stop 
offering health insurance to workers. 
President Clinton 
	     Ever since the demise of his sweeping health care reform 
plan in 1994, Clinton has pursued help for the uninsured in 
smaller doses. Now, with Republicans excited about using tax 
credits for health insurance, Clinton has the White House 
examining the idea--plus alternatives. Aides say the President 
thinks there may be more cost-effective ways to help the 
uninsured than tax credits. For instance, Clinton is a strong 
proponent of the State Children's Health Insurance Program, which 
enabled 982,000 children to receive insurance in 1998, its first 
year of operation. Under SCHIP, the federal government provides 
block-grant money to the states so that they can expand Medicaid, 
the health insurance program for the poor, or start new state 
programs. Although Clinton is not expected to lead the battle for 
tax credits, he still considers the issue of the uninsured a top 
priority, say aides. Plus, first lady Hillary Rodham Clinton 
remains committed to dealing with the problem. 
John Goodman 
	     Goodman, the president of the National Center for Policy 
Analysis, a conservative think tank in Dallas, wants to give 
every American access to health insurance, by offering a tax 
credit to people who can't get insurance through the workplace 
and providing a state-run safety-net program for those who choose 
to remain uninsured. Goodman would finance the new federal 
expenditures with money that the government is now using to 
subsidize health care for the uninsured. A trusted adviser to 
House Majority Leader Dick Armey, R-Texas, and House Ways and 
Means Committee Chairman Bill Archer, R-Texas, Goodman is 
pitching his proposal to House Republicans. He is also trying to 
sell his plan to Texas Gov. George W. Bush, the front-runner for 
the Republican presidential nomination. (Goodman is part of 
Bush's policy team.) Goodman is also talking to Republicans in 
the Senate, including James M. Jeffords, R-Vt., who chairs the 
Health, Education, Labor, and Pensions Committee. Jeffords is now 
drafting a bill. 
Sen. James M. Jeffords, R-Vt. 
	     Jeffords, chairman of the Health, Education, Labor and 
Pensions Committee, is one of only a few Senators actively 
exploring solutions to the problem of the uninsured. ''It's 
something I feel is very important,'' he said. And although he 
acknowledged that members of the Senate haven't been nearly as 
active as House members on the issue, Jeffords says the matter is 
quickly ''gaining momentum.'' He wants to offer uninsured 
Americans a tax credit that would cover as much as the full cost 
of a health insurance premium in the private market. Without such 
a rich benefit, he said, few uninsured people would use the 
credit to buy insurance. Jeffords, though, would place some 
limits on eligibility, so that people with higher incomes would 
not qualify. Jeffords is in a unique position because he serves 
on both the Health Committee and the Finance Committee, the two 
panels with primary jurisdiction over health care. 
Charles N. Kahn III 
	     Kahn, the president of the Health Insurance Association 
of America, a trade group that represents insurance companies, 
used to be the chief health care aide on the House Ways and Means 
Committee. He jumped into the debate with a $ 75 billion-a-year 
comprehensive proposal that would give grants to states to insure 
low-income people. People with incomes between one and two times 
the poverty level would get federal vouchers to help pay for 
insurance. The insurance industry is trying to convince policy- 
makers not to disturb the existing employer-based health care 
system--out of concern that employers would drop health benefits. 
Typically, employer health care plans are a more attractive 
business proposition to insurers than individual policies. 
David Kendall 
	     Kendall, a senior fellow for health policy at the 
Progressive Policy Institute, a Washington think tank affiliated 
with the centrist Democratic Leadership Council, is considered a 
bridge within the policy community between those on the right who 
are looking for free-market solutions to the uninsured and those 
on the left who think that the only solution is for the 
government to run a program. ''He makes it possible for (tax 
credits) to be an OK position for them to take,'' said Grace- 
Marie Arnett of the Galen Institute. Kendall is a member of the 
Health Policy Consensus Group. He's also a member of an informal 
group of people from business, the insurance industry, think 
tanks, and congressional staffs who meet to discuss health care 
reforms, especially market-based ideas, at the Wye River 
Conference Center on Maryland's Eastern Shore. Kendall advises 
both Democrats and Republicans on Capitol Hill, and he was an 
inside player the last time Congress considered major health care 
reform bills in 1993 and 1994. He was a health care aide to 
former Rep. Jim Cooper, D-Tenn., who developed a bill based on 
so-called managed competition, a free-market alternative to 
Clinton's Health Security Act. 
Rep. Jim McDermott, D-Wash. 
	     For years, McDermott has advocated a national health care 
system that would give all Americans medical care through a 
single government program such as Medicare or Medicaid. But, he 
admits, that's not going to happen as long as Republicans control 
Congress. Indeed, even when Democrats were in charge, they 
couldn't make it happen. ''The reality is that the political 
climate to have an honest debate about universal coverage was 
destroyed by partisan bickering (over health care reform 
legislation) in 1994.'' Now, like some other Democrats, McDermott 
is working with the GOP to see if incremental change is possible. 
He teamed up with conservative Rep. James E. Rogan, R-Calif., in 
May to introduce a bill that would offer a partially refundable 
tax credit to any taxpayer who could not get health insurance 
through the workplace. 
Mark Pauly 
	     Because Pauly is part of the academic community--he's a 
professor of health care systems and economics at the University 
of Pennsylvania's Wharton School--the people he reaches are 
different from the think tank experts. Pauly has written books 
providing economic and political analysis of employer-based 
health insurance. He's part of the Health Policy Consensus Group, 
and he comes to the table from a market-oriented viewpoint. The 
time is right for health care tax credits, Pauly says. 
''Employment-based insurance is eroding, even in a period of 
tight labor markets, and employees are becoming increasingly 
dissatisfied with the type and portability of insurance they are 
offered,'' he said at a recent press briefing of the consensus 
group. 
Rep. Fortney H. ''Pete'' Stark, D-Calif. 
	     Stark, a liberal who understands America's health care 
system better than almost anyone else in the House, is likely to 
have a hand in any bipartisan tax credit proposal that emerges 
from the chamber. As the top Democrat on the Ways and Means 
Health Subcommittee, Stark has already defined some key 
differences that divide Democrats and Republicans. For instance, 
he and Armey were unable to agree on how to make it easier for 
people with tax credits to buy health insurance on their own. 
''He and I agree that you can't just give the people the credit 
and say, 'Go buy what you want.' But getting there was the 
difficult part,'' Stark said. The moment Stark began talking 
about requiring insurance companies to take all applicants, ''We 
couldn't find a way to deal with it.'' In the end, Stark 
introduced a bill on his own that makes available a refundable 
tax credit to anyone who doesn't participate in an employer- 
sponsored health plan. Participating health plans could not turn 
away unhealthy applicants. 
Rep. Bill Thomas, R-Calif. 
	     Thomas, the chairman of the House Ways and Means Health 
Subcommittee, has been examining broad-based solutions to reverse 
the growth of the uninsured. But some of his early ideas alarmed 
his colleagues in Congress, as well as health care analysts. He 
proposed offering tax credits for health insurance to everyone, 
including those who now get health care through their employers. 
Critics predicted that would cause employers to stop providing 
coverage for workers. As a result of the flap, Armey decided to 
become more active in health care reform and push his own, more 
modest, proposal. But, now, Armey appears to be deferring to 
Thomas more than he was. Thomas acknowledges the difficulty of 
pursuing comprehensive legislation and suggests that a multi- 
committee task force might be formed in the House to deal with 
the issue.