Congress Punts

After months of political battles over how to help displaced workers get or keep health coverage, Congress has decided to punt. The House passed a scaled-back economic stimulus bill yesterday that included neither Medicaid expansion (thank Heavens) nor tax credits for health insurance (the better option).

The Senate is expected to vote as early as today on the bill, which extends unemployment benefits for 13 more weeks and provides tax breaks to spur business investment. It also extends the MSA experiment for a year. The House passed the $51 billion bill by 417-3, and Senate approval is expected as well.

Both want to act quickly in time for the six-month marker of the September 11 attacks.

But the political battles over how best to provide health coverage still haven’t ended. Minority Leader Richard Gephardt complained yesterday that there is nothing in the bill to “help people to continue their health insurance.” But House Speaker Dennis Hastert said he pulled the health insurance provisions from the bill at the request of Gephardt. Asked about the dispute later, Gephardt told reporters the differences between the two sides over how to provide health benefits were just too great.

These battles are far from over.

The governors already are complaining about the stimulus bill, saying that the business tax cuts will drain nearly $15 billion from their coffers over three years since state tax laws usually follow federal law.

First, where do they think that the new jobs will be created? In the states, of course, and that means that it will help generate new revenue because more people will be working. This is not a static world, folks.

Second, governors are having trouble balancing their budgets because they have become addicted to federal Medicaid matching dollars and have expanded eligibility to many middle-class citizens. The economic stimulus bill is the least of their worries.

It’s time for the governors to go into rehab and understand that the more they grab for federal Medicaid dollars, the further into the quicksand their state budgets will fall. To take advantage of a sale, even a 50% or 75% discount, you have to have money to start with.

While too many states think the answer is more price controls, lower reimbursements, and more centralized control, a few are taking a different course – trimming excessive benefits and engaging consumers in using health services more responsibly. They can take advantage of the new Health Insurance Flexibility and Accountability guidelines to begin to move some Medicaid and SCHIP beneficiaries into private insurance – a healthier move for both the beneficiaries and the states.

Grace-Marie Turner

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research organization focusing on ideas to promote free-market health reform. She can be reached at P.O. Box 19080, Alexandria, VA, 22320.

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