Budget Treats Uninsured As "Job 21"

Feb 01, 1999

FOR IMMEDIATE RELEASE

February 1, 1999

CONTACT: Richard Coorsh

202) 824-1787

email: rcoorsh@hiaa.org

The following statement was released today by Chip Kahn, President of the Health Insurance Association of America (HIAA).

The nation's most pressing domestic problem is the need to provide affordable coverage for the 43.5 million Americans who lack health insurance. Current trends indicate that by the year 2007, the number of uninsured Americans will climb to 53 million, and more than 60 million if the economy turns sour.

Solving the problem of the uninsured must be "job one." But based upon its latest budget, apparently, the Clinton Administration considers the need for affordable coverage more like "job 21." The Administration has missed a great opportunity by not including in its budget a 100 percent tax deduction for health insurance premiums to make the cost of coverage more affordable for individuals who buy their own coverage and the self-employed.

Instead, the Clinton Administration would increase the number of the uninsured with so-called patient protection legislation that will raise the cost of coverage and price hundreds of thousands out of the insurance market. The most important "patient protection" should be protection against mandates that drive up the cost of coverage and enrich trial attorneys and doctors at the expense of hard-working consumers.

HIAA and its members are troubled by several of the budget's Medicare-related provisions. Regrettably, the Administration's latest budget throws yet another hurdle in the path of Medicare beneficiaries who want high quality, affordable private coverage by raising user fees charged to private Medicare HMOs in excess of 50 percent. The budget's call for expanding Medicare eligibility to age 55 is fundamentally flawed because it would substantially raise the program's cost in order to provide coverage for a relative handful of people who should instead receive a tax benefit to obtain private coverage. Furthermore, the budget calls for the sale of private Medicare supplemental coverage on a guaranteed issue basis to Medicare beneficiaries below age 65 - a move that would raise premiums by about 20 percent for seniors and compel many of them to drop their private coverage.

At least on long-term care, the President is moving in the right direction, as the budget contains tax credits for people who provide long-term care to relatives or loved ones. It also encourages the federal government to provide affordable long-term care insurance to federal employees. These proposals are a good start, though much more needs to be done. Tax law ought to be amended to provide a 100 percent deduction to encourage Americans to purchase private long-term care insurance to protect against the catastrophic costs of long-term care and nursing home stays.