A new health-care entitlement Glendening plan: While the goal is desirable, governor's proposal contains serious flaws.

January 25, 1998

AMERICANS generally agree that, for societal reasons as well as humanitarian ones, children should have access to medical care. The dispute revolves around the circumstances under which taxpayers should assume responsibility for making that care possible.

Gov. Parris N. Glendening's proposed Children and Families First Health Care Act reflects his belief that government should help as many as it can afford. Supported by a new federal law providing $2 for every dollar of state spending, the governor wants to extend Medicaid coverage -- $76 million in 1999 alone -- to children in families with incomes up to $35,000 for a family a four.

Not only are these parameters generous to a fault, but such middle-class families would be eligible even if they have access to private insurance at work.

The motive behind Mr. Glendening's plan is admirable, but the ramifications are troubling.

His legislation would create an entitlement that, because it would benefit politically unassailable children, would be very difficult to end if the federal government stops its contribution in five years, as it says it will, or when Maryland's rosy financial picture changes.

Supporters of the Glendening plan are betting that the federal money will never end because the states will exert pressure for it to continue. Yet even if that happens, there are other reasons why such a liberal extension of public support is unwise.

Americans have yet to conclude that health care should be socialized. Despite Medicare and Medicaid, we still believe health care should be a function of the private sector, with employers providing insurance choices individuals can accept or not.

Mr. Glendening's proposal discourages this; so does a competing House measure to the extent it too allows families with access to employer-provided insurance to choose free government coverage instead.

The House bill, sponsored by House Majority Leader John Adams Hurson, a Montgomery County Democrat, would avoid creation of a new entitlement. It would direct people toward private-payer insurance as their incomes rise above $28,800. A weaknesses of the House version is that it relies on an untested, newly legislated health-care foundation to devise private or quasi-public projects to cover children. But at least it makes clear that private, employer-provided insurance should cover the needs of most working families.

The governor's proposal, however, would provide a disincentive for firms to offer insurance. It also would encourage middle-class families who qualify to opt for free Medicaid health care for their children. And it contains language that would set the stage for expanding this program to adult family members.

Recent debates over welfare reform have yielded several points of agreement that are applicable here. One is that people should be given incentives to work for what they have, and aspire to do better. Another is that we should reserve government help for the neediest folks and those faced with an unexpected crisis. A third is that people must accept less government largess and more personal responsibility as they move up the income ladder.

Most Marylanders don't object to expanding Medicaid to cover more of the working poor, or to providing support for families in an emergency. But publicly funded health insurance for children up to age 18 in families making as much as $35,000 -- $16 an hour -- is too much.

We believe a reasonable child health-care bill would include: More restrictive conditions for full Medicaid eligibility, perhaps including time limits or a contribution requirement for families with higher incomes.

A mechanism for channeling families toward private insurance.

A stipulation that those with access to employer-provided insurance would be ineligible for Medicaid.

Additionally, it might be worthwhile to explore some type of voucher system to help families afford private insurance for their children.

The House bill seems to be moving in the right direction; the governor's measure -- which passed the Senate on Friday -- marks a return to the notion that government should solve everyone's problems. Maryland should be wary of heading back in that direction.

Pub Date: 1/25/98

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