Kaine Proposes Millions For Health
Insurance Plan Limited by Budget

By Tim Craig and Anita Kumar
Washington Post Staff Writers
Thursday, December 13, 2007; B01

RICHMOND, Dec. 12 -- Gov. Timothy M. Kaine proposed an expansion Wednesday of Virginia's effort to subsidize health care for the uninsured, targeting some women and small-business employees.

But a tight budget forecast kept the governor from expanding the proposal to hundreds of thousands of other residents who lack coverage.

Kaine's $25 million plan, part of the 2008-10 budget he will present Monday, also seeks to boost spending on community-based health clinics that serve the uninsured. It would pump additional money into programs that offer free or low-cost dental care.

About 1 million Virginia residents, one-seventh of the population, have no health insurance. Kaine (D) said this is unacceptable, given the state's relative wealth.

"We have tried to meet that dilemma and chart a path to improvement," the governor said at a news conference Wednesday.

Kaine has hoped to make expanding access to health insurance a cornerstone of his administration. He created a commission last year to study the issue; this fall, the panel recommended more than $130 million in new programs.

But Kaine is hampered by a projected $600 million budget shortfall. Because he has ruled out a tax increase, he said, Virginia will not be able to match other states' efforts on a system of universal health care for the uninsured.

The biggest component of Kaine's program is a proposal to spend an additional $7.7 million over two years to launch the VirginiaShare health insurance program, which would partner with small businesses to offer coverage to employees.

Under the program, the state, employers and employees would divide the costs of acquiring a health insurance policy. To qualify, an employee's income could not be greater than double the federal poverty level.

Kaine said the additional money could allow 5,000 more Virginians to receive health insurance.

A second component of Kaine's plan calls for spending $7.4 million over two years to offer prenatal coverage to an additional 400 women. The plan also would expand the program that offers free breast cancer and cervical cancer tests to some uninsured women.

Kaine also is proposing to spend an additional $5 million each on the Virginia Health Care Association, the Virginia Association of Free Clinics and the Virginia Health Care Foundation, community-based providers of care for the uninsured.

An additional $50,000 annually would go to a nonprofit organization that offers dental care to the uninsured, an issue particularly important in rural Virginia.

Although Kaine cautions that his proposals are the first steps in a multiyear process to expand access to health care, Virginia's efforts fall short of initiatives being debated or implemented in other states.

Last month, Maryland Gov. Martin O'Malley (D) and state legislators agreed on a plan to raise the state's cigarette tax by $1 to expand Medicaid coverage to 100,000 uninsured residents. An estimated 800,000 people lack insurance in Maryland.

In New Mexico, Gov. Bill Richardson (D) is pushing a proposal to offer universal health coverage, at a cost of $333 million over five years.

Four states -- Hawaii, Maine Massachusetts and Vermont -- have approved programs that come close to universal health coverage, according to Laura Tobler, program director for the health program at the National Conference of State Legislatures.

But Kaine is juggling a host of competing needs, including more funding for mental health programs after the Virginia Tech massacre.

Kaine has ruled out seeking a tobacco tax increase to pay for health care because the tax was raised three years ago. He also pushed for a tax increase last year to pay for transportation improvements.

Despite the budget challenges, Kaine stressed that Virginia should take steps toward tackling the problem of the uninsured. "I've got a pie of finite size, and it is a tight revenue time. But even in a tight revenue time, I want to figure out a way to serve more people, especially vulnerable people," Kaine said.

Terry G. Kilgore (R-Scott), chairman of the House Republican caucus, said he supports some of Kaine's proposals but is worried about how to pay for them. "Where will the money come from?" he said. "That's the question all of us have right now."

Tobler said Kaine's modest proposals mirror those in other states with tight budgets.

"To date, most health-care reform and most programs to target the uninsured have been incremental, smaller-scale, simply because of funding," she said.

Staff researcher Meg Smith contributed to this report.