- The Washington Times - Monday, September 30, 2002

The new Census Bureau numbers on the uninsured in America should make Congress both Republicans and Democrats sit up and take notice. In the past year, layoffs, rising unemployment, and escalating health-care costs, have increased the numbers of uninsured substantially. Congress has been dithering with the Patient Bill of Rights and mental health parity mandates, but it hasn't done squat about the uninsured.
There is plenty Congress could do to help the uninsured gain access to health insurance, and most of it wouldn't even cost that much money.
Congress could enact Association Health Plan (AHP) legislation, which would allow small business groups to jointly purchase coverage and enjoy some of the same savings large employers have. An AHP law wouldn't cost taxpayer much, if anything. It would simply remove the existing obstacles that prevent small employers from purchasing insurance coverage in the most efficient way possible.
Congress could also expand Medical Savings Accounts (MSAs). MSAs allow workers to take money that is currently going into insurance premiums, and put it into a savings account to pay for the same services that insurance would have paid. BecauseMSAs allow people to pay directly for services instead ofprocessing claims through a third party, they save a lot of wasted administrative costs and make consumers more aware of the price of services. This creates an incentive for workers to think twice about their use of health care services. MSAs also enable people to buildup a source of money to pay for coverage when they lose their jobs, and thus, their insurance.
Congress could extend to the uninsured a tax break similar to that enjoyed by people who get insurance on the job. Employment-based benefits are completely free of taxes income and payroll, state and federal. The value of that tax break is approaching approximately $1,500 per household. This tax break is automatic. There is no annual debate in Congress about whether it is a good idea or not, about who benefits and who doesn't, or about what it costs the government. It is just assumed that employer-based coverage is a good thing and should be free of taxes.
The uninsured, on the other hand, do not get insurance benefits from their employer, and therefore they don't get the benefit of the tax break. If they want to purchase insurance, they have to pay for it themselves with no help from either their employer or the government.
Put simply, they are uninsured because without that help, they can't afford it.
It is a cruel irony that the government provides no help to the very people who also get no help from their employers, but provides a very generous, unlimited subsidy to those whose employers also subsidize their coverage.
Congress could fix all this for a fraction of what it currently spends to subsidize employer-based coverage chicken feed, by Washington standards. The current tax break for employer-based coverage costs about $140 billion a year, while most estimates of the cost of MSAs and tax credits are around $15 billion a year.
President Bush has proposed legislation addressing all three ideas tax credits, MSA expansion and AHPs. Adopting these three ideas would be the most serious assault on the problem of the uninsured in more than 35 years.
These are also the only viable ideas currently on the table. Some who prefer to have the government run everything have argued for expanding Medicaid, the government's health care program for the poor, to include all of the uninsured. But 75 percent of the uninsured are in working families, most of whom wouldn't want to be stuck with what they see as "welfare medicine."
Another knock against simply expanding Medicaid, is the fact that most states can barely pay for the Medicaid programs they already have. More than 40 of the 50 states currently run deficits, and most of them are cutting back and not expanding, Medicaid programs.
To date, Congress has done very little on any of these ideas. But it isn't too late. With the right leadership, Congress could begin addressing the problem of the uninsured this year. It doesn't have to wait for another year and another Congress and another round of shocking new numbers.

Greg Scandlen is senior fellow of the National Center for Policy Analysis.

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