Uninsured Debate Will Continue in Congress as Spending Increases, Budget Deficit Threaten Other Health Measures, CQ’s Goldreich Predicts

How to help the unemployed with health coverage -- the issue that sank negotiations over an economic stimulus bill in December -- will continue to divide Congress when it reconvenes on Jan. 23, predicts Congressional Quarterly senior reporter Samuel Goldreich in this week's "Congressional Quarterly Audio Report." With elections looming in November, the "first round of the campaign" began Jan. 4, when Senate Majority Leader Tom Daschle in a speech "revived" the Democrats' version of the stimulus bill (Goldreich, "CQ Audio Report," 1/8). That bill would have provided $12.3 billion to help unemployed workers purchase health insurance through COBRA and would have allowed states to extend Medicaid coverage to unemployed workers who do not qualify for COBRA. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, allows unemployed workers to retain health coverage under their former employers' insurance plans by paying 102% of the premiums. The bill also would have provided $1.4 billion to boost the federal match to states for Medicaid (Kaiser Daily Health Policy Report, 11/15/01). In turn, President Bush responded that the Senate should pass a GOP-backed bill, approved by the House shortly before adjourning, which would provide health insurance tax credits to cover 60% of health premiums for uninsured workers. Goldreich predicts that while the economic stimulus debate may shift more toward whether to speed up other tax cuts, the uninsured will "remain an issue all year long," with Congress unlikely to reach consensus. He explains that both sides are "proposing solutions that they know the other party won't support" -- Republicans say COBRA subsidies amount to a "new entitlement," while Democrats say moving toward tax credits will ultimately eliminate the entire employer-funded health insurance system.

Medicare and Patients' Rights
Also unlikely to pass this year is any effort to extend Medicare solvency or add a prescription drug benefit, Goldreich says. With health spending rising rapidly and the recession and war on terrorism fueling a return to budget deficits, there "isn't much room to do much of anything big on new health benefits this year," he says. However, Goldreich notes the situation "could help spur action on patients' rights, which won't cost taxpayers much in terms of new spending." Lawmakers will face a "political calculation," balancing the risk of taking no action on patients' rights during an election year against employer warnings that increasing lawsuit risks "could end up increasing the ranks of the unemployed."

Spiraling Spending
Goldreich also discusses a new report from federal officials that health spending rose nearly 7% in 2000, the biggest one-year jump in 12 years (see story 1). The numbers suggest that managed care organizations have "very little leverage to reduce costs at this point" and leave Congress confronting the "huge question" of who will pay for the new spending as more costs are shifted to individual patients and state Medicaid programs. Goldreich warns that the situation "is threatening to spin out of control while lawmakers and the administration get stuck in an election year debate." He concludes, "There might not be much money in the federal budget this year, but lawmakers at some point will have to consider the public role in subsidizing health care and the burdens placed on taxpayers by new benefits such as seniors' drug coverage and patients' rights legislation" ("CQ Audio Report," 1/8). The full report is available online.