ED111402: Give Credit Where It's Due
It appears high on nearly every wish list President Bush has
mentioned for the next Congress: health-care legislation. Why?
Because lawmakers can't wait much longer before they do something
about the growing number of Americans who lack health
The latest figures from the U.S. Census show that about 1.2 million
people lost their health insurance last year, bringing the grand
total without coverage to about 41.2 million. This raises an
obvious question: Why?
Is it because we're a cold, unfeeling people who refuse to give
Canada-style socialized medicine a chance? No. To a large extent,
it's because -- despite the unprecedented mobility of the American
work force -- health insurance remains tied to our jobs. Employees
get unlimited tax relief for the purchase of health insurance but
only as long as they are buying into the plans their employers
provided their employers.
The results aren't hard to predict. Control over the type of
coverage most of us get is completely out of our hands. You're
stuck with what you get. Employers choose the plan, the provider,
the co-pay, the deductible and the benefits. Oh, you can go buy
your own plan, but you must a) pay for it yourself and b) forego
the tax break enjoyed by workers who stick with their employer's
plan. How many of us can afford to do that?
The Census report said the decline could be traced "almost
entirely" to a drop in employer-sponsored coverage and that the
"most substantial drop" was among small businesses. Naturally, some
lawmakers believe this means we should rely more heavily on
government programs or mandate that employers carry coverage.
But the government-run programs don't fare so well themselves.
Currently, 41 states are planning cuts to their Medicaid programs.
Various states have proposed everything from limiting access to
prescription drugs to further reducing already-low reimbursements
to providers to cutting enrollment. Adding 40 million people to
Medicaid probably will mean more cost-cutting and greater rationing
of care. It certainly won't help the insured or the indigent who
rely on the program.
And forcing employers, especially small-business owners, to carry
coverage isn't the solution. In tough financial times, too many of
them must choose between cutting back on health benefits and going
out of business. If coverage is mandated, employers in financial
straits will have to choose between closing down and laying off
workers. "Mandated coverage" won't help people who don't even have
Why not let individuals control their own coverage? This would
foster continuity and let workers choose the plans that best fit
their needs and the needs of their families, as well as protect
them against gaps in coverage when they change or lose their jobs.
(Today, the average 32-year-old has changed jobs seven times
already, with more changes to come.) Workers should rest secure
that they and their families will be covered no matter what their
President Bush has proposed a plan to do just this. His plan calls
for tax credits for those not covered by their employers -- up to
$3,000 for families and $1,000 for individuals, to cover as much as
90 percent of average health-insurance costs. The credit would be
upfront, so individuals could apply it when premiums are due, and
it would be refundable, so even those who owe no taxes would be
Critics claim that policies offered to individuals are hard to find
and too expensive to be covered by the tax credits. But policies in
the individual market have become far more available and affordable
in recent years. (A family of four, for example, can go on the
Internet and buy a Blue Cross/Blue Shield plan that includes
prescription drugs for about $220 a month.)
Americans deserve control over their health-care purchases, and tax
credits are an affordable way to provide them. Tax credits also
give people the opportunity (and incentive) to ensure that costs
don't spiral out of control. It's time Congress gave control over
health insurance to those who deserve it -- individuals and their
Owcharenko is a policy analyst in health care at The
Heritage Foundation (www.heritage.org), a Washington-based public
policy research institute.
Distributed nationally on the Knight-Ridder Tribune wire.