HEALTH CARE IMPROVEMENTS
June 07, 2002 - WAR REPORT NUMBER 23-2002
This is the third in a series of WAR Reports adapted from a report by the Council for Affordable Health Insurance (CAHI) titled, "Helping the Uninsured Who Need it Most." The report appeared in the Council's Issues & Answers publication dated March 2002.

To address the additional cost for those with preexisting health conditions, the Litow-CAHI approach factors in an increase of between $400 and $1,090 per person per year, depending on income. Thus, a middle- income family of three with two healthy people and one person with a preexisting condition could expect a total of $2,800 ($800 each for the two healthy members and $1,200 for the one with a preexisting condition).

In contrast, a similar low-income ($7,500-$17,000) family of three could expect to receive as much as $4,760 ($1,360 each for the two health members and $2,040 for the member with a preexisting condition).

The bottom line is how much will this expanded coverage cost the
government. The authors project $20 to $25 billion a year assuming the credit is for those who do not have health insurance or who are not already getting a tax break through their employers. If the credit is expanded to include all workers under age 65 -- a much more comprehensive proposal than Congress is considering -- it would cost an additional $20 to $25 billion a year for a total annual cost of $40 billion to $50 billion.

If Congress were to decide to include Medicaid reform at the same time it created a tax credit for all workers, Medicaid recipients could also use a refundable tax credit to purchase a private insurance policy. Ironically, including Medicaid recipients in the tax credit structure would make the reform budget neutral, meaning there would be no additional cost to the government. The authors opine that since Medicaid is so costly and inefficient, the government could provide current recipients with a very generous tax credit to buy a policy with almost no out-of-pocket costs and still save $40 to $50 billion a year -- enough to offset a new tax subsidy given to all workers.

Stay tuned! Why? Because I tell it like it is and it's your money.

God Bless America.