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Tax credits, more care for children key to coalition's plan for uninsured

The diverse collection of interest groups vowed to stick together to promote its vision to Congress for expanded health coverage.

By Doug Trapp, amednews staff. Feb. 5, 2007.

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Washington -- Sixteen organizations with often opposing views on health care reform announced a plan Jan. 19 to cover more than half of the 46.6 million uninsured Americans.

"No group is strong enough to shoulder this problem alone," said Jeremy A. Lazarus, MD, vice speaker of the American Medical Association House of Delegates. "We've learned that to succeed, we must unite." The AMA is a member of the group.

The Health Coverage Coalition for the Uninsured, after two years of discussions, proposed a two-phased plan. The initial part, called Kids First, aims to expand coverage to at least 97% of the 9 million uninsured children in the U.S. at a cost of $45 million over five years.

It would accomplish this, in part, by improving enrollment in the State Children's Health Insurance Program and Medicaid, and increasing federal funding to pay for low-income children who would join as a result.

SCHIP, the state-federal program created 10 years ago to cover children from families with incomes too high for Medicaid but too low to afford private coverage, is up for reauthorization this year. It has cost the federal government about $5 billion a year.

The plan's first phase also calls for tax credits to help low-income families with children buy health insurance. The percentage of the premium covered by the credit would be graduated on a sliding scale based on family income.

The second wave of changes would focus on uninsured adults. It would allow states to eliminate family status as a Medicaid eligibility requirement and calls for federal funds to cover the cost.

In addition, the tax credits would be broadened beyond families with children. The group offered no cost estimate for this phase because there were too many variables.

The discussions were inspired by a suggestion of Ron Pollack, executive director of the consumer group Families USA. Pollack said the organizations plan to keep working together to gather support for their proposal.

"We recognize we are strange bedfellows, but let this be clear: We are not interested in a one-night stand," he said.

Each organization began the discussions -- which were led by two professional conflict resolution firms -- with their own goals. Gradually, however, the groups began to focus on what they could all agree on: Expanding health coverage as much as possible, as soon as possible.

Some coalition members -- such as America's Health Insurance Plans -- had already released their own universal health care proposals. The AHIP proposal, unveiled in November 2006, also calls for government funding to expand Medicaid.

WellPoint, the nation's largest private insurer -- but not a coalition member -- proposed a similar expansion of public programs and suggested funding could come from increased cigarette taxes.

Pollack said the coalition's lobbying has begun.

"We've already started having meetings on Capitol Hill," he said. Coalition members have heard suggestions from lawmakers on how to pay for the plan.

Gathering momentum for reform

After the November 2006 elections, it seemed the states would take the lead on health care reform, while congressional leaders waited for the 2008 presidential race to play out before acting.

But that perception has changed. The coalition's plan is only one in a flurry of federal proposals.

President Bush announced in his Jan. 23 State of the Union address a plan to create a standard tax deduction for health insurance, similar to the deduction for dependents. The deduction would be $15,000 for families and $7,500 for individuals.

However, his proposal would tax employer-sponsored health insurance benefits as income.

Bush predicts that even with this change, taxes would be lower for about 80% of employer-sponsored policies and more than 100 million Americans would see their tax bills go down. The plan would require no new funding, the White House said.

Lawmakers also are getting into the game. One bill, unveiled just days before the coalition announcement, sticks with the notion of state leadership. The bipartisan Health Partnership Act, introduced in both the House and Senate, would authorize grants to states to enact reforms, then report to Congress on the success of their measures after five years. The American Medical Association supports the bills.

Pollack said he sees the legislation as compatible with the state-centered reforms in the coalition's plan.

Meanwhile, two days after the coalition released its proposal, Sen. Hillary Clinton (D, N.Y.) said she supported expanding SCHIP to cover all children whose families live at or below 375% of the federal poverty limit. States have previously set their own income limits for the program.

Sen. Ron Wyden (D, Ore.) on Jan. 16 introduced legislation that would mandate the purchase of private health insurance for all adults, while requiring states to work with insurance companies to create affordable plans.

Sen. Ted Kennedy (D, Mass.), chair of the Senate committee with jurisdiction over health reforms, supports expanding Medicare to all Americans.

The process that led to the coalition's consensus plan was not without its bumps. The group originally had three other members, which left for various reasons. They are the National Assn. of Manufacturers, the AFL-CIO and the Service Employees International Union.

The manufacturer group's staff member working in the coalition left in the spring, and the association was not able to find a replacement, said spokeswoman Kat Snodgrass.

"We just didn't have the time to work on [the coalition]," she said.

The Service Employees International Union applauds the coalition's effort, but the SEIU decided to focus on more fundamental change, according to spokeswoman Sara Howard.

In mid-January the union joined the AARP and the Business Roundtable to begin lobbying Congress to improve the health and long-term financial security of Americans.

Phone calls to the AFL-CIO were not returned before deadline.

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