- The Washington Times - Monday, January 22, 2007

Last week, we speculated that the two new health-care coalitions to grab headlines of late could be a sign that America’s health-care debate is moving left. Our editorial prompted one of the groups, the Health Coverage Coalition for the Uninsured, to meet yesterday with the editorial board of The Washington Times to make its case. Having heard the case, we can say with some certainty that if this is the “middle ground” of the new health-care debate, then that debate has indeed lurched leftward.

Their plan transcends ideology, said Ron Pollack, the executive director of Families USA, and Alissa Fox, vice president of the BlueCross BlueShield Association. It should appeal across the political spectrum, they contended, with refundable tax credits for families earning up to 300 percent of the poverty level — that’s $60,900 for a family of four. These credits would finance a “significant” percentage of the premium for “meaningful health coverage.” “Significant” could mean 80 percent for the poorest of the uninsured and less as one moves up a sliding income scale, Mrs. Fox said. At a time when the median household income is $46,326 (the 2005 figure), this credit extends well into the middle class.

The plan’s other key features include extensions of the State Children’s Health Insurance Program and Medicaid to cover uninsured children, plus new rules allowing states to expand Medicaid eligibility to all adults below the federal poverty level and a series of other grants and subsidies. Together, these would indeed effect a measurable decrease in the number of uninsured in the United States, currently around 47 million.

But it would also be staggeringly expensive (at least $45 billion over five years for the children alone) and does nothing to fix the structural inefficiencies of America’s health-care system, which, compared to the major industries democracies, gives relatively poor health outcomes on a dollars-spent basis. It opts instead to build upon what already exists.

We did back-of-the-envelope calculations to reach a rough cost estimate to the U.S. Treasury, which would certainly run into the tens of billions annually and possibly to a hundred billion or more. We mooted a possible cost of $100 billion and neither Mrs. Fox nor Mr. Pollack contested our number.

Suppose a family of four at 200 percent of the poverty level, which is $40,600, purchases a $12,000 health-insurance plan under this proposal with a “significant” credit of 80 percent. That’s a tax credit of $9,600. The typical family at this income level is already exempted from federal income taxes. For 10 million households, that’s $96 billion per year.

We commend the Health Coverage Coalition for the Uninsured for entering the fray, something the other much-noticed coalition, Divided We Fail, has yet to do. But a plan that does nothing to remedy the structural inefficiencies of American health-care with much-needed market mechanisms while increasing federal health-care liabilities by tens or possibly more than one hundred billion dollars per year is not, at least by any real conservative judgment, the “middle ground,” unless that ground has already shifted leftward.

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