Although President Bushs effort to push more Americans into the individual insurance market was seen by many as dead on arrival, his proposal to slash hospital funding to pay for state experiments on access isnt quite so moribund. Anytime the budget process is involved, it is time to man the barricades. If you need further illustration of this point, just take a gander at the presidents fiscal 2008 budget, out Feb. 5. We may be looking at the 1997 budget fight all over again.
The idea of effectively ending the disproportionate-share hospital program to pay for covering the uninsured is a twist of logic that only this administration would even attempt to pull off. Heres the lowdown: Bush is saying that by reallocating the DSH funds so that states can provide at least catastrophic coverage for low-income Americans and by giving the wealthier uninsured a tax incentive to buy individual plans, there is no need to reimburse safety-net hospitals for treating the uninsured. (Keep in mind that these are twin pillars; without both, the house of cards falls apart.) Yet even under the White Houses optimistic scenarios, only 10% to 30% of the nearly 47 million uninsured would be covered.
The other element of the plan is cost savings. The presidents plan would lower the growth in national healthcare spending right away, and decrease spending even more in the long run with increased competition and the development of new cost-effective technologies, says a White House briefing paper. This bit of magic will take place mainly by giving the uninsured more ownership of their healthcare, which will avoid costly and unnecessary medical visits.
On the latter point, the standard deduction for health insurance would spell doom for the most vulnerable of our society. The chronically ill would be shifted to the private insurance market without the protections of community rating and could no longer deduct the cost of uncovered medical expenses.
The best illustration of the folly of the Bush strategy is in Louisiana, where officials have been working with the Bush administration to remake the shattered healthcare system. HHS Secretary Mike Leavitt has told state officials that no more money would be available to the state, but said that slashing funding for the charity-care hospital system would help provide coverage for 40% of the states massive uninsured population. Members of Louisiana bipartisan healthcare redesign panel say that even factoring in the DSH savings, the coverage plan would cost an additional $1 billion a year that the state doesnt have.
Best of luck, the administration is basically saying.
Fortunately, there are better ideas before Congress. Just one example is the bipartisan Health Partnership Act put forth by U.S. Sens. Jeff Bingaman (D-N.M.) and George Voinovich
(R-Ohio) and U.S. Reps. Tammy Baldwin (D-Wis.) and Tom Price (R-Ga.). That would authorize grantsyes, including new moneyto the states or groups of states to increase access to health insurance. Participating states would submit plans for expanding access to a bipartisan State Health Innovation Commission, which would send its recommendations to Congress for funding. Among state proposals that could be considered are tax credits, expansion of Medicaid and the State Childrens Health Insurance Program, creation of pooling arrangements similar to the Federal Employees Health Benefits Program, development of single-payer systems or a combination of all of these options.
There are other options as well, each with at least some elements that are better than a plan that would rip apart the safety net that its sponsor says he is trying to improve.