GOVERNMENT & MEDICINE

Health groups unite on plan for uninsured: Insure low-wage workers

AMA applauds the effort but prefers its individual health insurance tax credit plan to reduce the number of uninsured Americans.

By Susan J. Landers, AMNews staff. Dec. 11, 2000. Additional information

Washington -- Three national health care organizations have set aside the differences that divided them during the 1993-94 health system reform battle to develop a plan they believe could provide health insurance for up to half of the nation's 43 million uninsured citizens.

The plan, unveiled Nov. 20 by the Health Insurance Assn. of America, the consumer group Families USA and the American Hospital Assn., focuses on low-wage workers. It would expand existing federal programs and provide a tax credit to employers to help defray the cost of workers' insurance premiums.

The lack of universal health insurance is one of the nation's "greatest shortcomings," said Families USA Executive Director Ron Pollack.

"In the past, every group interested in extending coverage to the uninsured held out for their favorite approach, and their second choice always was the status quo," said HIAA President Chip Kahn. "As a result, nothing was accomplished."

The cost of the proposal was estimated at $250 billion over 10 years. Although expensive, the surpluses now being generated by America's economy could cover the cost, said the groups.

"At a time when America is enjoying a booming economy, we can -- and must -- do better," said Rick Pollack, executive vice president of the American Hospital Assn.

The groups intend to promote their proposal to Congress and the president-elect. Members of the public already support reforms to help reduce the number of uninsured Americans, according to a poll released at the plan's unveiling.

When 800 adults were surveyed on the proposal, 55% said they strongly favored it and another 30% said they were somewhat in favor. When the plan's price tag was included, 53% of those surveyed continued to strongly favor the proposal and 27% said they somewhat favored it.

"A majority of Americans even support this proposal at an increase of $200 per year per taxpayer, which is the highest price tag we've ever tested in a survey," said William McInturff, partner and co-founder of Public Opinion Strategies, the firm that conducted the poll.

The plan would:

• Expand Medicaid to people with incomes at or below 133% of the federal poverty level, or $18,820 for a family of three. States would be eligible for enhanced federal matching funds in excess of the current Medicaid funding formula to encourage the enrollment of eligible people.
• Allow states to extend Medicaid or State Children's Health Insurance Program coverage to adults with incomes between 133% and 200% of the federal poverty level. Coverage would be based on income, not parental status. States would be eligible for enhanced federal matching funds.
• Provide businesses with a nonrefundable tax credit to encourage them to make coverage affordable for their low-income workers. The tax credit would be available to employers who pay a large share of the premium for workers whose family incomes are between 133% and 200% of the federal poverty level.

The three groups came together under an initiative of the Robert Wood Johnson Foundation. The foundation has been holding conferences under this initiative to draw attention to the importance of health insurance, said the foundation's executive vice president, Lewis Sandy, MD.

"People who don't have health insurance often delay care," Dr. Sandy said. He cited as an example the case of a middle-aged man who, unable to afford medication for hypertension, had a stroke. "I know his stroke and suffering, as well as cost, could have been avoided if his high blood pressure had been treated."

"In the future, no American should lack health care because of uninsurance," Dr. Sandy said.

The AMA is "very supportive of finding ways to increase coverage for the uninsured so that all Americans can have health care coverage," said AMA Immediate Past President Thomas R. Reardon, MD.

One AMA goal is to allow patients to have more choice of coverage options. Therefore, the Association would prefer that a refundable tax credit, inversely related to income, be provided to the individual, rather than to employers, Dr. Reardon said.

The AMA recently released an updated report on its plan to expand health insurance to the uninsured. In addition to individual tax credits, the proposal includes increased opportunities for groups, such as coalitions of small employers, unions and trade associations, to join together to purchase insurance at lower rates.

Common ground

"The important thing is we all want to achieve the same goal. We differ a little on how we might achieve it," Dr. Reardon said. "We are quite willing to sit down and work with the groups to try to achieve the coverage we all think should be provided."

The American College of Physicians--American Society of Internal Medicine also applauded the efforts of HIAA, Families USA and AHA. "We think it represents an important step forward when organizations that in the past have disagreed on public policies to help the uninsured populations are able to put aside their differences to propose innovative ways to expand coverage," said Bob Doherty, ACP-ASIM senior vice president.

The internists noted that the groups' proposal has similarities to a plan that ACP-ASIM unveiled last year to make coverage available to individuals with incomes up to 150% of the poverty level. Both plans would expand Medicaid and target tax credits to low-wage workers who can't obtain insurance through their employers. But the tax credit mechanism and other features of the new plan differ.

Long-time champion of health reform, Sen. Edward M. Kennedy (D, Mass.), also commended the groups' plan. "The proposal by Families USA, HIAA and AHA builds on the current SCHIP and Medicaid programs, which have broad bipartisan support," he said. "It's very similar in many respects to the proposal that Congressman [John] Dingell [D, Mich.] and I introduced."

Kennedy's proposal also gives states additional federal funds to provide insurance to the parents of children enrolled in SCHIP.

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The new plan developed by Families USA, the Health Insurance Assn. of America and the American Hospital Assn. to provide health insurance to as many as half of the nation's 43 million uninsured residents would:

• Provide additional federal funds to states that expand Medicaid coverage to people with incomes at or below 133% of the federal poverty level, or $18,820 for a family of three.
• Extend Medicaid or State Children's Health Insurance Program coverage to adults with incomes between 133% and 200% of the federal poverty level.
• Offer businesses a nonrefundable tax credit to encourage them to provide affordable health insurance to low-income workers.

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Expanding Health Insurance: The AMA Proposal for Reform (http://www.ama-assn.org/advocacy/healthpolicy/reform/reform.htm)

Health Affairs journal, which published the HIAA, Families USA and AHA proposal (http://www.healthaffairs.org/)

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