Plan aims at health care for uninsured

Health insurers yesterday proposed providing health care coverage to the nearly 50 million uninsured Americans by expanding public programs such as Medicaid and offering financial incentives to buy private health insurance.

If successful, the proposal would provide health insurance to the 8 million uninsured children in three years and extend some type of coverage to nearly every adult within 10 years.

The plan was drawn up by America's Health Insurance Plans (AHIP), a Washington trade association that represents more than 1,000 health care companies. The plan's overall cost eventually would reach $300 billion, funded through federal grants to states and through tax breaks.

A key element of the plan includes creating universal health accounts that could be used to pay monthly health care bills and for hospital and doctor visits. The accounts are similar to existing health savings accounts that allow people to put money away tax-free. For example, individual health insurance purchased with money from the accounts could be used for a tax deduction.

In addition, the federal government would match contributions to the accounts -- up to $2,000 for families with an income level of $60,000 and $500 for individuals with an income level of about $30,000.

The shift of power in Congress to Democrats will give the proposals a boost because Democrats are in favor of expanding federal programs such as Medicaid and Medicare to cover more of the uninsured.

"The uninsured is one of those anchors that can take down the entire system," said David Merrit, a project director at the Center for Health Transformation, a health care policy strategy group led by former House Speaker Newt Gingrich, a Republican. "This is a bipartisan plan that will start a serious conversation in Congress, especially the Democrats."

The last time Congress thought seriously about universal health care was 1993, when Sen. Hillary Rodham Clinton, then the first lady, spearheaded President Clinton's attempt to reform the country's health care system.

"Health care is coming back," Mrs. Clinton, New York Democrat, told the Associated Press yesterday. "It may be a bad dream for some."

The rising cost of health care is a primary factor for the 46.6 million uninsured Americans. Costs for coverage in health maintenance organizations are projected to increase by 12 percent next year, according to a report by PricewaterhouseCoopers. Preferred provider organizations also are expected to increase their coverage costs by nearly 12 percent next year.

Because uninsured people receive health care in high-cost settings such as emergency rooms, the large number of people going without coverage significantly contributes to skyrocketing U.S. health care costs, which hit $2.2 trillion this year, the highest amount of any country in the world.

As Congress begins work this year to reauthorize the State Children's Health Insurance Program, which provides coverage to children in low-income families, AHIP is asking Congress to expand the program to make eligible all uninsured children from families with incomes well below the federal poverty level. For instance, under the proposal, children in a family of four with an income level of $40,000 would become eligible for the program.

Medicaid, the federal health care program for the poor, would be expanded to include single adults with incomes up to the federal poverty level, which is $9,800 for a single person. Medicaid generally does not cover single adults. There are about 12 million single adults who make about the federal poverty level, according to the Kaiser Family Foundation.