Protecting the Youngest
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MARGARET WARNER: What to do about the one in seven children who do not have health insurance? We debate that issue now. Dr. Irwin Redlener is president and co-founder of the Children’s Health Fund, a private group that provides free primary health care to children in poor communities around the country. He is also director of community pediatrics at Monte Fiore Medical Center in New York. Bob Moffet is a health analyst at the Heritage Foundation in Washington. He was a deputy assistant secretary in the Department of Health & Human Services during the Reagan administration. Welcome both of you. Dr. Redlener, does this situation call out for, in your opinion, a new government program to cover these uninsured children in some way?
DR. IRWIN REDLENER, Children’s Health Fund: Well, I think, Margaret, that one way or another we’re going to have to find a way to make sure that children, all children in the country, have access to health care. It’s become a major crisis of enormous importance to children, families, and the country in general, but I know for a fact that we’re dealing with millions of kids, for example, with asthma that’s out of control, with low rates of immunization, with anemia, all kinds of medical problems which really must get medical attention. And I think that we could do this without creating new government structures. In fact, there’s lots to build on right now. We have state programs that could be enhanced. We have the Medicaid program, itself, which has been around for a while providing health care to the poor that could be expanded, there’s a number of ways to do it. The point is that we’ve got to get this job done.
MARGARET WARNER: But you are saying you think government should spend money to do this in some manner or another?
DR. IRWIN REDLENER: One way or another we’re going to have to figure out the way to get the resources to ensure that children do have access to health care. I think that’s part of the responsibility of our society. And I think our government has a role here, but so does the private sector. And I’m just saying I think we need now creative, maybe innovative ways of bringing more public resources but also private resources. And when I say public, I mean state and federal resources to the table to try to create the programs that’ll give children and families the health care they need.
MARGARET WARNER: All right. Bob Moffet, what’s your view of this? Should the federal government get involved?
BOB MOFFET, Heritage Foundation: Well, the federal government should get involved, but the most important thing that the federal government can do is to correct the problems that it has already created. Right now, Margaret, the government penalizes working families who do not get their insurance through the place of work. If you’re an American citizen today, you get unlimited tax relief as long as you buy your insurance from the place of work; however, if you lose your job, you change your job, or you work for an employer that does not offer insurance, your only option is to buy individual insurance on the individual market. The individual insurance market in America is very highly regulated, which means it’s got all kinds of mandate and benefits. The government’s saying what you should or should not have. But, more importantly, you have to buy that insurance with after-tax dollars which could add as much as 25 or 30 percent to the cost of that package. And beyond that, if you have an individual insurance market, you don’t have the same kind of tax treatment for group plans outside of the place of work that you have in the place of work.
So as a result, most of these working families are working for small firms. They’re in and out of small firms, but they do not have the same kind of tax breaks that families have who get their insurance through the place of work. That’s a tremendous inequity. I agree with Sen. Rockefeller. It’s not necessarily–Medicaid is not necessarily the best way to go about that. In fact, he said it’s not working so well. Certainly what we do not want to do is expand a program that is not working well while ignoring the problems that are created by the government.
MARGARET WARNER: So you think basically the same tax break that goes to people who get their health insurance for the employer should go to individuals?
BOB MOFFET: Exactly. In other words–
MARGARET WARNER: A tax credit.
BOB MOFFET: A tax credit, I mean, makes much more sense. It’s much more equitable, especially for lower income working families.
MARGARET WARNER: All right. Dr. Redlener, what about that idea, what’s wrong with just a tax credit and let these people buy insurance, themselves?
DR. IRWIN REDLENER: Well, the problem is that for many of the families who do not have health insurance and health coverage or access for their children, they’re dealing with such a deficit of spendable money and spendable income that they cannot afford the premiums whether they get tax–their tax deductible or not. So we’re dealing with a lot of families who are on the edge who are literally making decisions with their available cash whether they’re going to buy food, pay the rent, or get preventive health care for their children. And we think that kind of set of options is something that’s also tremendously unfair and not–certainly not in the best interest of children or the country as a whole. And I think we need to do something about that highly vulnerable group for whom the premiums or the health care costs in general are just too high and unaffordable and out of reach.
BOB MOFFET: Well, I would simply respond by saying that a tax credit can be structured many different ways. There’s no reason why a family would have to wait till the end of the year to get a tax credit. They could get a tax credit through the withholding system, just like we give tax–the earned income tax credit today. Congress could specify they got the tax credit up front. The most important thing is to structure the tax credit in such a way that the higher your health care costs or the lower your income the more generous the tax credit could be. It’s a design issue, and it’s really not a difficult issue. But the important thing is, is that it would give individuals and families the right to pick and choose the plans they want at the prices they wish to pay and control their own health care.
MARGARET WARNER: All right. Let’s look at a couple of the other ideas that are in the legislation, various legislative proposals out there. And one is, as Sen. Rockefeller was saying, Dr. Redlener, build on the existing Medicaid programs which now cover some children of the working poor. Would you advocate just expanding Medicaid to cover essentially all children under age 18 whose parents cannot afford it themselves, or for whose employers don’t offer it?
DR. IRWIN REDLENER: Well, I think the approach by Senators Chafee and Rockefeller is a very, very interesting one that deserves a lot of attention. It’s an excellent way to begin the process of getting health care to the children that need it. They’re really talking about expanding Medicaid, and Medicaid, for the most part, has worked very well as the only safety net we’ve had for children with respect to health care. And I think those Senators who are approaching it in that way by–by increasing eligibility ultimately to families up to 150 percent of the poverty guideline, which is what they’re intending to do, would be an absolutely tremendous way to get this thing kick-started. It would bring millions more children into the health care system.
MARGARET WARNER: How many of the 10 million uninsured do you think roughly would be covered if there was that kind of expansion of Medicaid?
DR. IRWIN REDLENER: Well, I think we can get at least another 2 million children into the system that way. And then we could bring another almost 3 million children into the system who are eligible under the current Medicaid guidelines who with some additional outreach and programs in the states could get into the system, and so we would have a total of those 3 million, another 2 million under this expanded Medicaid concept. And we could get to about half of the children who are currently uncovered. And I think that would be a tremendous step forward. And I think if you took that approach and then added the approach of the say Hatch-Kennedy bill which would then allow us to give grants to the states.
MARGARET WARNER: Which is to subsidize–
DR. IRWIN REDLENER: Yes.
MARGARET WARNER: –private insurance.
DR. IRWIN REDLENER: Exactly. This would be–these two would mesh very, very well. In fact, in the Kennedy-Hatch approach we then have money available in the form of grants to the states. That could be distributed in such ways that would allow people who were having difficulty affording health care to be able to purchase health insurance in the private market. So that would give the other approach, but both of those together really form a very excellent way to get the goal that was–was really laid out by the President in his–in his proposal, budget proposal earlier this year. So I think we’re on the right road here, and I think the exact mechanism will be worked out, but we have two very, very good bills right now in the four that are ready to step up and make sure that that happens.
MARGARET WARNER: Okay. Bob Moffet, I know you like tax credits, but now address the idea of using Medicaid for part of it and subsidizing insurance.
BOB MOFFET: There’s no reason–there’s certainly no reason, Margaret, why you could not use Medicaid in some way to make Medicaid more flexible and targeted to particular elements of the population that would need Medicaid funding; however, realize that just a blanket expansion of Medicaid, which is a huge government program, is an expansion of Medicaid now for working families. Medicaid is a welfare program for the most part, so now we’re talking about expending or basically expanding a welfare program for working families. It’s a much better idea to give these families targeted tax relief, enabling them to pick and choose the plans that are best for them and their children, not what the state bureaucracy happens to think is best for them at any given point in time.
DR. IRWIN REDLENER: Well, actually, there’s not that much choice involved here. I mean, it’s not all that elaborate. I think it’s very clear–I’m a pediatrician–we’re providing health care to children–there’s some basic needs that kids have which are preventive care, care of chronic illnesses–
BOB MOFFET: That’s right.
DR. IRWIN REDLENER: –appropriate care for acute problems that come up. It’s not–it’s not like there’s going to be 50 different ways to do that. It’s a fundamental benefit package that is reflected very, very well in the–at least in the ideal Medicaid scenario, that’s what kids need. And I think that there is a lot of flexibility even in the Medicaid programs. You know, many states, as Bob well knows, are now going to systems where managed care is providing some of those services for children in Medicaid, those kids who are still on fee-for-service Medicaid can basically shop around and get their services wherever they want to get them. I don’t think that’s–I don’t really think from my point of view that would be a problem. I think we should be in favor of expanding the base of the safety net, which is Medicaid, and then supplementing that with additional resources to allow people to buy other kinds of products that may be on the market.
MARGARET WARNER: All right. Bob Moffet–
DR. IRWIN REDLENER: The key thing is: Are we getting comprehensive health services to children in the end of the day?
MARGARET WARNER: Bob Moffet, let me ask you about a criticism that was raised by Utah’s other Republican Senator, Bob Bennett, who dropped off the Hatch-Kennedy bill. He said he feared that if the government started subsidizing private insurance that a lot of employers who now offer insurance because the employees really want it for the kids would say, fine, go get it through this government program. Do you think, and does experience in the states suggest that that, in fact, might–could happen?
BOB MOFFET: I don’t think there’s any question about it. If you take a welfare program like Medicaid–and it is a welfare program–and you expand it to cover working people, people who are working for companies, then there is an incentive for employers to simply say, look, why should I deal with this, why shouldn’t I just simply let the taxpayer pick up the bill for another class of people in the health care system? And I’m concerned that it will erode private insurance.
MARGARET WARNER: Dr. Redlener, briefly on that point.
DR. IRWIN REDLENER: Well, I agree that that’s a theoretic possibility, and there’s been a number of studies, some of which support that contention, and some of which do not, and I think there are ways of safeguarding that phenomenon, that substitution phenomenon from happening. And I think it would be important and not all that difficult to put those kinds of safeguards into whatever bills are going to be passed around this subject. I do think it’s doable. In other words, you have time limits. In other words, a person would not be able to get into the public program for a period of time after they were privately insured; other kinds of things that are around the concept of maintenance of efforts, therefore, requiring companies to continue at the level that they had been before.
MARGARET WARNER: All right.
DR. IRWIN REDLENER: So I wouldn’t let that be the stumbling block in getting some of these important programs through.
MARGARET WARNER: All right. Well, thank you, Dr. Redlener and Bob Moffet.