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12/15/2000

Opposing Groups Find Common Ground on Health Care Coverage

Nancy Tarleton Landis

Arguing that proposals to cover the 43 million Americans who lack health insurance must "transcend ideological, partisan, and interest group boundaries," two vocal antagonists present a compromise plan in the policy journal Health Affairs.1 In hopes of influencing the agenda for the new President and Congress, coauthors Charles N. Kahn III, president of the Health Insurance Association of America (HIAA), and Ronald F. Pollack, executive director of the health care consumer advocacy group Families USA, unveiled the proposal at a November press conference, joined by an American Hospital Association representative.

The recommendations urge policymakers to focus initially on low-wage workers and families. For both Families USA and HIAA, the proposal is not an ideal plan but "a good second choice," wrote the authors. The two groups were at opposite poles of the 1994 debate over President Clinton's plan for health care reform. Families USA supported the Clinton plan, while HIAA's "Harry and Louise" television ads helped to sink it.

In discussions over the past year, the two groups concluded that a viable approach must build on the current system of employer-based insurance without threatening those who currently have coverage, and that it will require a major investment of new federal dollars.

In their stepwise strategy, the first priority is to cover workers and families whose incomes are at or below 200% of the federal poverty level—people who often do not have coverage through their employers and who may decline coverage when it is offered because they cannot afford the copayments.

The proposal is "a policy framework, not a set of legislative specifications"—a first step in consensus building that will involve other stakeholders, as well. The proposal has three parts:

  • Medicaid expansion,
  • Expansion of coverage for higher-income persons, and
  • Tax credits.

Public-sector programs like Medicaid and the Children's Health Insurance Program (CHIP) now exclude a large number of uninsured persons. While children are covered in most states if the family income is below 200% of the poverty level, their parents face stricter requirements for coverage. And most states exclude childless adults, no matter how low their income. The authors' proposal would base eligibility for such coverage solely on income. Medicaid would cover all those with annual incomes below 133% of the poverty level, and federal matching funds to states would be increased.

After Medicaid expansion is phased in, states would have the option to establish coverage for adults with incomes between 133% and 200% of the poverty level, again with increased federal funding. At the same time, a tax credit to encourage businesses to offer low-income workers affordable coverage would be established. The tax credit policy "would seek to secure, not weaken, current employer coverage and contributions that workers receive through their jobs."

The plan involves concessions by both organizations. According to the article, Families USA has never favored tax incentives and agreed to the tax credit only because it is linked to expansion of Medicaid and CHIP. HIAA, on the other hand, has traditionally pushed for a larger role for the private sector and far more modest increases in public-sector programs.

"We expect that this proposal will not be considered ideal by other major health care organizations as well," wrote the authors. "However,…any so-called ideal plan that cannot get enacted is an illusionary ideal. It is no solution at all."

  1. Kahn CN III, Pollack RF. Building a consensus for expanding health coverage. Health Aff. 2001; 20(1):40-8.