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Democrats to Seek Expansion of Health Coverage for Children

By Spencer Rich
Washington Post Staff Writer
Sunday, December 8, 1996; Page A19

Looking for a more measured way to expand health care to those without it, congressional Democrats have decided to make medical coverage for uninsured children one of their top legislative priorities in the new Congress.

The proposals, being drafted by Senate Minority Leader Thomas A. Daschle (S.D.), House Minority Leader Richard A. Gephardt (Mo.) and other key Democrats, essentially could create a new class of federal social support. Some of the initiatives would offer a tax credit to help a family buy their children a health care policy, while others would offer a direct federal subsidy of some type.

Although the details are still being worked out, most of the measures focus on children in families that fall between the cracks: They're not poor enough to qualify for Medicaid but not affluent enough to pay for private insurance entirely out of their own pocket.

By focusing on children's health, the Democrats think they have seized on an issue that is politically more palatable than the ambitious health care reform plan that collapsed in Clinton's first term. And by taking a more tempered approach, they hope to build on the successes achieved last year in the bipartisan effort to pass the Kassebaum-Kennedy bill that strengthened coverage for the unemployed.

"We will be attempting to improve access to health care, especially for children, in the 105th Congress," said Daschle after his reelection to the leadership post last week. He called this one of his top priorities.

Within the administration, Secretary of Health and Human Services Donna E. Shalala has made it known she strongly favors some action to expand coverage of children, and on several occasions President Clinton himself has indicated an interest in expanding coverage of children as long as it were within the context of a balanced budget.

About 10 million American children are without health insurance, according to estimates by the General Accounting Office. Because nearly 3 million of those are eligible for Medicaid, part of the Democrats' effort will be aimed at spurring these parents to take advantage of this already existing federal program.

But many more ambitious plans are in the works. Among the most detailed thus far is a proposal being drafted by Sens. Edward M. Kennedy (D-Mass.) and John F. Kerry (D-Mass.) that would provide grants to the states to help families afford health insurance for their children.

The plan would target families in that no man's land — that is, those who are not poor enough to be eligible for Medicaid but who don't get insurance on the job and can't afford to pay for it themselves. Under the Kennedy-Kerry plan, families would be paid a federal subsidy that would gradually decrease as their income went up.

The plan would cost between $20 billion to $24 billion over five years and would allow subsidies for a majority of uncovered children, according to one estimate. As conceived, it would be paid for through an additional 75-cent-a-pack cigarette tax.

"Every American child deserves a healthy start in life, and every family should have the opportunity to help that child get that start," Kennedy said.

Few would disagree, but Republicans, whose support would be crucial for any of these efforts to succeed, say they want to see the actual proposals before signaling their support.

"Senator Roth is concerned that health care be available to children," said an aide to Senate Finance Committee Chairman William V. Roth Jr. (R-Del.). "He would like to see the details of the proposals before commenting."

Already, though, a coalition of children's groups is gathering behind the "Kiddycare" concept, the label being attached to many of these proposals. And, as their Democratic backers realize, the concept has strong political appeal for the millions of families without coverage, people such as Rod and Elaine Gaither of Clarksville, Md.

The Gaithers earn about $40,000 a year, but they don't get health insurance on the job and say they can't afford the $3,600 to $4,500 that buying insurance would cost them.

The size of the family paycheck sounds pretty respectable, admits Elaine Gaither.

"But it shrinks very substantially after taxes, house costs, cars to go to work, food and clothing for three really fast-growing children and other day-to-day expenses," she said. "I get very creative with how far a pound of meat can go."

Once they had insurance based on a job she held, but when she left the job a few years ago, they lost it. Since then they have been searching for a modest-cost insurance policy, or at least something that would protect their children. But so far they haven't found a good policy that is also affordable.

"I worry every day," said the Howard County woman. "I've got three kids, one with asthma, which really frightens me. Once in a while he gets a bad attack. It's a scary proposition."

Groups lining up in support of these initiatives say that children who aren't covered often end up never getting treatment when they become ill.

"What happens to uninsured children? Usually their financially strapped families tend to delay or forgo needed pediatric medical care because of the out-of-pocket expense," said David Tayloe, a physician speaking for the American Academy of Pediatrics in a recent plea for action on the Kiddycare concept. They tend to get less preventive care, fewer immunizations and contract more diseases, he said.

Stan Dorn of the Children's Defense Fund, another backer of Kiddycare, said the 1987 National Medical Expenditure Survey, the most recent, found that one-third of uninsured children with two or more ear infections and a majority of uninsured children with asthma "never saw a physician."

Despite the emotional appeal of broadening coverage for children, the proposals could bog down in disputes over how much to spend, where to get the money, whether the plans would affect existing workplace insurance coverage of children and whether the initiatives would create a new federal entitlement.

The most frequently cited concern is the potential for something called "substitution" — the notion that employers may stop offering coverage for children of their workers if they know the government will provide it.

"My only concern is that whatever they do, it should not weaken the existing employer system," said Bill Gradison, president of the Health Insurance Association of America. "They might say, `We don't have to do it. The government will do it.' "

Gradison and others are also concerned that if insurers are required to take any subsidized child who applies to them, part of the cost of covering these children may be pushed onto existing policyholders.

On the political front, obstacles also loom.

Congressional Republican aides note that conservatives have generally shown a resistance to initiatives that involve mass federal subsidies.

"Republicans generally prefer tax credits that would allow the market system to work," said one aide.

While some conservative policy groups such as the Heritage Foundation agreed that the problem of children's health is one worth addressing, they were quick to challenge the Kennedy plan or anything like it that establishes what they view as a new federal entitlement.

"We hope to draft a plan or policy concepts that conservatives could accept," said Heritage's Carrie Gavora. That plan, she assured, would bear little resemblance to the Kennedy proposal.

© Copyright 1996 The Washington Post Company

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