Congress Considers Bills for Universal Health Coverage

Published September 1, 2006

Over the last few days of July, two U.S. senators with presidential aspirations offered bills outlining their plans for insuring the 19 million to 46 million Americans who are believed to lack coverage. It’s becoming an increasingly hot topic as November’s elections draw closer.

Former presidential candidate John Kerry (D-MA) unveiled a bill to establish universal health insurance by 2012. Kerry would start by expanding Medicaid to cover children from all socioeconomic backgrounds. His plan would then give private-sector workers a chance to buy into the same health plan that covers federal workers. Anyone still lacking coverage by 2012 would be forced to buy some kind of plan, and those who couldn’t afford it would be given money to do so by the government.

“Every day since the [2004] election, the health care crisis has grown steadily worse,” Kerry said in a July 31 speech in Boston. “The president has stuck to his guns or, more accurately, his empty holster and done nothing beyond trotting out the conservative hobby horse of health savings accounts.”

Noting Flaws

The business publication Investor’s Business Daily skewered Kerry and his plan in an editorial later the same day.

“The only crises are those at the individual and family levels when someone without insurance becomes gravely ill. Sickness and injury can be tragic, but making a federal case out of misfortune is not one of Washington’s duties,” the editors wrote.

“Want a real crisis?” Investor’s Business Daily continued. “Absolve people of their duty through a universal third-party payer–the government–and watch a problem erupt. With little or no money coming out of their pockets, people will overuse the system, sending costs even higher through increased demand. The strain placed on medical professionals will make waiting times unbearable. With no mechanism for self-rationing in place–such as personal responsibility or cost–the government will ration care.”

Offering Another Model

Sen. Russ Feingold (D-WI) took a somewhat slower approach to the same goal with his State-Based Health Care Reform Act, unveiled July 26. It calls for the federal government to give grants totaling $32 billion over the next 10 years to states to experiment with different models of universal coverage. Feingold’s bill would create a nonpartisan Health Care Reform Task Force, which would begin work by reviewing states’ applications and give five-year grants to the best two or three.

Though Feingold has long supported a single-payer system and universal coverage, he’d rather see states come up with innovative solutions than let the legislative logjam continue on Capitol Hill, his office said.

Wisconsin state Rep. Curtis C. Gielow (R-Mequon), who is sponsoring a state bill that would get rid of all 32 health insurance mandates in the Badger State, said that even though he supports few of Feingold’s ideas, this is a good one.

“I applaud that idea,” Gielow said. “I frankly think that if we could get a couple of innovations going and federal funding [for them], then we could choose the best of the best with the potential for a national model.”

Blocking Matching Funds

Devon Herrick, a senior fellow at the National Center for Policy Analysis in Dallas, said there could be problems with implementing Feingold’s ideas–particularly the matching-funds mechanism by which the grants would be delivered.

“We like the idea of giving states flexibility to tinker with their Medicaid programs, but expanding public coverage boosts spending and crowds out private coverage,” Herrick explained.

“Feingold proposes the federal government pay 75 percent of the costs of these pilot projects. It’s a step in the wrong direction from the type of incentives that states need,” Herrick said.

“A block grant would give states the leeway to decide how and on whom their Medicaid money is spent,” noted Herrick. “The current system of matching funds encourages states to spend more than they otherwise would have spent, thus increasing the burden on both state and federal taxpayers. Because they pay only a fraction of the cost, a system of matching grants also reduces states’ incentive to go after waste, fraud, and abuse of the system.”

Karla Dial ([email protected]) is managing editor of Health Care News.

For more information …

A fact sheet on Sen. Russ Feingold’s State-Based Health Care Reform Act is available online at

“Asking for a Crisis,” Investor’s Business Daily, July 31, 2006,