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Senators Question Bush Plan for Uninsured

Originally published by Reuters Health, March 12, 2002

WASHINGTON, DC — Members of the US Senate Health, Education, Labor and Pensions Committee Tuesday praised the Bush administration for proposing to spend $125 billion over the next decade to reduce the number of Americans without health insurance, but most said they disagree with many aspects of the plan.

Presidential health adviser Mark McClellan told the committee that the administration’s proposal – the heart of which is tax credits of up to $1,000 for individuals and $3,000 for families – would “provide good, affordable health insurance options for the vast majority of individuals who are eligible for the credit.”

But several Senators, led by Committee Chairman Edward Kennedy, D-Mass., took exception to that claim. Kennedy said a survey by his staff found few policies available—even to young and healthy individuals—that did not have high premiums and even higher deductibles. “Their plan does nothing for the millions of Americans who cannot afford the $1,000 deductibles,” he said. “It does nothing for Americans with disabilities or other chronic conditions who cannot buy affordable coverage in the private market at all,” he added, including people like his son, who had bone cancer as a child.

Hillary Rodham Clinton, D-N.Y., said an analysis by her staff found the President’s plan would reduce the number of uninsured New Yorkers by only 1.6%. By instead expanding public programs like Medicaid and the State Children’s Health Insurance Program, “we could cover far more people than even the most optimistic estimates of tax credits,” Clinton said.

Even some of those who support tax credits in general took issue with the Bush plan’s approach. Sen. Susan Collins, R-Maine, said that in her state, premiums for small businesses are rising by as much as 40% per year, “and they just can’t absorb that.” She wanted to know why the administration plan does not subsidize small businesses or allow workers to use the credits to pay their share of employer-provided insurance.

McClellan said other aspects of the President’s plan would help small businesses band together.

Senators also complained about the administration’s handling of the Medicaid program. At a time when many states are so strapped they are actually cutting Medicaid, the administration should not be opposing a temporary increase in state matching rates that “will mean keeping afloat the current offerings,” said Sen. Tim Hutchinson, R-Ark.

And Kennedy criticized the administration’s new “waiver” program that in some cases has allowed states to cut benefits for certain Medicaid recipients in order to offer coverage to others. In Utah, he noted, new coverage comes without hospital insurance. “That sounds like buying a car with no transmission,” he said.

McClellan said the Utah plan was approved only because the state has created a network of hospitals that has promised to provide services to those who lack coverage.