HIAA and Families USA Seek More Government

Published April 1, 2001

The Health Insurance Association of America (HIAA), an insurance trade organization, has partnered with the American Hospital Association (AHA) and Families USA, a liberal advocacy group that supports government-run health care, in a compromise initiative they call the “Common Ground Proposal.”

The strange bedfellows, who announced their partnership in November 2000, have been joined by such groups as the American Nurses Association, the Catholic Health Association, and the Service Employees International Union.

John J. Sweeney, president the AFL-CIO, has hailed the Common Ground Proposal as an “important step” toward “building a consensus” on federal policies to deal with the uninsured. Senator Edward M. Kennedy (D-Massachusetts) praised the proposal as an indication that “bipartisan cooperation” is possible.

The Common Ground Proposal has three parts:

  • A dramatic expansion of Medicaid. Medicaid would be expanded to cover all persons with annual incomes below 133 percent of the federal poverty level—about $18,800 for a family of three. In a break with current rules, eligibility would be based solely on personal income.
  • Expansion of the SCHIP, the State Children’s Health Insurance Program. Under the Common Ground Proposal, the $48 billion SCHIP plan would be expanded to cover all adults with incomes between 133 percent and 200 percent of the poverty level. Again, eligibility would be based solely on income.
  • More health insurance tax breaks for business. The Common Ground Proposal introduces a new non-refundable tax credit for employers, to encourage them to pay a larger share of the premium for employees with incomes between 133 percent and 200 percent of the poverty level.

Moves in the Wrong Direction

Robert Moffit, director of domestic policy at The Heritage Foundation, warns the Common Ground Proposal is not the sort of market-oriented reform the country’s health care system needs.

Writing in the March issue of the newsletter of the Association for American Physicians & Surgeons, Moffit notes, “Many members of Congress, including liberals and conservatives, have made reduction of the uninsured a top policy priority. Leading conservatives . . . all backed comprehensive reform based on consumer choice and competition. But the Common Ground Proposal goes exactly in the opposite direction.”

Moffit explains,

  • “Congress should be getting Americans off Medicaid and into private insurance, not putting more Americans into Medicaid.”
  • “The Common Ground Proposal would contract the private health insurance market, rather than expand it. It would surely encourage a mass dumping of Americans out of private health insurance and into Medicaid.”
  • “The Common Ground Proposal lays the groundwork for even greater government control over American medicine.”

Moffit further suggests the Common Ground Proposal is a “hop, skip, and a policy jump to employer mandates: the core component of the 1993 Clinton Health Plan.”

“While Families USA gets closer to its objective of government control over medicine,” Moffit points out, “the HIAA gets expansion of the New Deal tax treatment of easily regulated and controlled employer-based health insurance. The insurance industry gets a fresh flow of taxpayer cash through the new tax credit, and the health insurance contracts are and remain the exclusive preserve of company health benefit managers and insurance companies.”

“Politically,” Moffit concludes, “with the Common Ground Proposal, the left wins–and conservative and centrists advocates of consumer choice lose–big time.”

For more information . . .

on the HIAA/Families USA Common Ground Proposal, visit HIAA’s Web site at www.hiaa.org and see the news release at http://www.hiaa.org/news/news-current/press-releases/release25.html.