April 18, 2002 | Executive Memorandum on Health Care
Some Members of Congress are seriously considering enrolling millions of uninsured Americans in Medicaid, the troubled welfare program for the poor. Instead of burdening the already fragile public health care delivery system, Congress should give the uninsured the ability to choose the kind of private health insurance they need, just as most of their fellow Americans do, by giving them direct financial assistance through tax credits or premium subsidies to purchase the coverage they want. President George Bush has already unveiled such a proposal.
The estimated 39 million Americans without health insurance are diverse not only in their health care needs, but also in the reasons why they are uninsured. Many simply do not have access to affordable health care coverage through their job, the primary way most Americans are insured. Either their employers offer no coverage, as is the case in many service-oriented jobs, or employees cannot afford the package their employer does offer. Still others are unemployed or between jobs.
Several proposals would broaden Medicaid eligibility to expand the government health care safety net for the indigent to include the uninsured. But Medicaid is not equipped to handle such an expansion; in fact, it desperately needs comprehensive reform to help those already enrolled in the program get the care they need. Among the major factors discouraging an expansion of the Medicaid program:
To control their rising Medicaid costs, states across the country are cutting services, limiting medication and treatment options, and reducing payments to doctors, hospitals, and other providers. This adversely affects patient access to quality care. In Washington State, fewer doctors are seeing Medicaid patients because of reductions in already low reimbursements. A major expansion of the financially troubled program to cover the uninsured would increase such rationing and reduce the quality of care, leaving the truly indigent and poor with even fewer benefits and poorer care.
Instead of forcing hard-working Americans into a substandard welfare program run by financially strapped state governments, Congress should mainstream uninsured Americans into the private health insurance system. Tax credits or subsidies would enable them to choose the plans and benefits that are best for their families, just as Members of Congress, federal workers, and millions of privately insured Americans do now.
President Bush's proposal of health care tax credits would enable the uninsured to secure the private coverage they want and create real portability of health insurance for low-income working Americans. Regardless of their job or job status, this would allow them to maintain continuous coverage and control of their health care decisions. The three key features of the President's $89 billion health care tax credit proposal are that:
Congress must take steps to address the growing problem of the uninsured, not only to do the right thing, but to do it right. Rather than expand Medicaid, a broken welfare program that promises more than it can deliver, Congress can directly help the uninsured get quality private coverage by creating a new system of refundable tax credits as the President and a bipartisan group of congressional leaders have proposed.
Nina Owcharenko is Health Care Policy Analyst at The Heritage Foundation.