Health Care Key Test of Thompson’s Flexibility as Social Policy Champion

Tommy G. Thompson, the Wisconsin governor George W. Bush has tapped to run the sprawling Department of Health and Human Services, could be a breakout star in the new president’s Cabinet. He could also be the Cabinet member who inadvertently exposes the blind spots in Bush’s thinking about moving power from Washington to the states. Most likely, he’ll be some of both.

Thompson is a big, beefy pol with a supple sense of policy nuance well disguised by his Damon Runyon diction. He has probably done more than any political leader apart from President Clinton to cement the new consensus that social policy should simultaneously expand opportunity and demand personal responsibility.

As his state’s governor since 1987, Thompson was an early champion of the idea--later brought by Clinton to the national stage--that welfare recipients should be asked to exercise more responsibility in their lives. In Wisconsin, he passed a path-breaking program requiring welfare recipients to keep their children in school. And he has been more aggressive than any other governor in moving welfare recipients into the work force.

But far more than most conservatives, Thompson understands the other side of the opportunity-responsibility equation: the need for government to support low-income families that “work hard and play by the rules.” He has expressed that conviction not only in his speeches but also in his budgets. “He does seem to understand what the next generation of reform ought to be--to put these supports around those who have played by the rules,” said Tom Corbett, associate director of the Institute for Research on Poverty at the University of Wisconsin-Madison. “I haven’t seen him shy away from making those investments.”

In Wisconsin, Thompson has increased state spending on child care for the working poor by a factor of 20. He created and later expanded a state earned-income tax credit, which reduces state taxes on working-poor families. He reformed state laws to allow women on welfare to keep more of the child support payments collected from the fathers of their children. He has moved to expand job training and counseling services for the working poor and to more closely integrate former welfare recipients into the job placement networks in place for other workers.

Most strikingly, Thompson has put Wisconsin at the forefront of efforts to ensure health care coverage for the working poor. Under Thompson’s BadgerCare program, Wisconsin guarantees health care coverage for all families with incomes up to 185% of the poverty level--about $25,300 for a family of three.

That is one of the most ambitious programs in the nation, and it is receiving strong early reviews. Among other things, by providing coverage for entire families, Thompson has increased the incentive for parents to obtain insurance for their children. As a result, he has done a better job than most governors in signing up working-poor children eligible for coverage under the new State Children’s Health Insurance Program.

“They have worked quite aggressively to give families coverage,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. “That has been an important piece of their doing an outstanding job in enrolling kids.”

All of these programs offer Thompson valuable models for his new job. Over the last decade, the philosophy behind America’s social safety net has quietly shifted from providing minimum sustenance to those who don’t work (through welfare) to supporting those who do (through programs such as the earned-income tax credit and child care subsidies). Thompson’s experience uniquely qualifies him to accelerate that shift in emphasis when the 1996 welfare reform law comes up for renewal next year.

But Thompson’s experience may offer him less useful lessons in another respect. He was among the nation’s most militant governors in opposing federal mandates and insisting that Washington pass power back to the states. For the most part, that tracks with Bush’s own emphasis on devolving power over social programs, like education, back to local governments.

For those who have watched him closely, the question is whether Thompson will understand that state flexibility isn’t a silver bullet solution to social problems.

In some instances, flexibility doesn’t go far enough. The best example on this front is health care for the working poor. Bush has proposed that states be given more freedom to use the existing funds under the children’s health insurance program to cover entire families. That flexibility might prompt a few more states to follow Wisconsin in providing such coverage. But Bush has not proposed to provide states any additional money to cover parents. Most experts agree with Rowland, who said that “any meaningful coverage of adults is going to require more money.”

On the other side, flexibility sometimes can go too far--and become a blank check. Even some Bush aides worry that, as a former governor, Thompson may resist efforts to demand accountability from the states.

“That will be a challenge for him, and he has to get out of the mode of, ‘I’m a governor and I’m in battle with HHS,’ ” said one Bush policy advisor.

Once again, health care will provide the key test. Progress in signing up eligible kids under the children’s health insurance program has varied enormously from state to state. During last year’s campaign, Vice President Al Gore sensibly proposed that states be required to meet enrollment targets--or face reductions in their federal funds. And he proposed that Washington require states to make enrollment easier, from signing up eligible kids through the subsidized school lunch program to allowing families to apply by mail so parents do not have to miss work. President Clinton on Saturday announced some first steps in that direction.

In the name of state prerogatives, Thompson likely would resist such requirements. But if Washington is to give states more freedom in using federal money, surely it has a right to demand results in how the money is spent.

That’s the principle behind Bush’s education reform agenda, which would give states more control over federal dollars but in return require proof of progress. That principle would be just as valuable applied to the vast health care and welfare programs Thompson will now direct--even if his old colleagues in governor’s mansions across the country don’t want to hear it.

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See current and past Brownstein columns on The Times’ Web site at: https://www.latimes.com/brownstein.