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Shortsighted States Are Putting Health Care on the Chopping Block

The number of Americans without health insurance now equals the population of Pennsylvania, Michigan, Illinois and North Carolina combined. From 2000 through 2002 alone, the number of uninsured Americans jumped by nearly 4 million, to 43.5 million overall. Today almost one in six Americans lacks health insurance.

And the problem is about to get worse.

Americans obtain health insurance from two principal sources: employers and government programs. Employers provide most of the coverage, but they are retrenching under pressure from double-digit increases in health-insurance premiums.

The share of Americans receiving health coverage from their employers has declined in each of the last two years, as higher premiums encourage businesses to either pass on more of the bill to their workers (which means fewer buy insurance) or drop coverage altogether.

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The only reason the number of Americans without insurance hasn’t increased even faster is that public programs, like Medicaid and the Children’s Health Insurance Program, are providing coverage to nearly 4 million more people today than in 2000, many of them children.

But now the public programs are facing debilitating cutbacks too. And the result will be a continuing rise in the number of uninsured Americans -- even if the recovering economy slows the loss of health insurance on the job.

A study due to be released today by the Center on Budget and Policy Priorities in Washington shows that 34 states over the last year have cut spending on either Medicaid, which provides health care for the poorest families; CHIPs, which primarily insures children in working-poor families; or both. The result could be to eliminate health coverage for 1.2 million to 1.6 million low-income people, almost half of them children.

Even when states last faced a fiscal squeeze, in the early 1990s, they did not slice nearly as sharply at health benefits. But with the budget shortfalls now facing the states even more dire, health care has moved onto the chopping block.

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“This is definitely new business,” said Leighton Ku, a senior fellow at the center who conducted the survey. “It’s a sign of how bad things are that states are now doing the unthinkable.”

States are squeezing these vital programs from every angle. Some are simply narrowing eligibility. Missouri reduced the income eligibility level for parents under Medicaid from about $15,260 for a family of three to $11,750. Texas lowered the income threshold for pregnant women to receive coverage.

Other states reduced coverage by making it tougher to enroll for the programs. Arizona, Connecticut and Texas, which had allowed parents to enroll children for a full year, now require reapplications or reviews every six months; that burden inevitably reduces the number of children covered.

Another 10 states increased the premiums low-income families must pay. The survey found that after Oregon increased premiums for Medicaid, nearly one-third of beneficiaries fell off the rolls.

In the most draconian step, half a dozen states -- Alabama, Colorado, Florida, Maryland, Montana and Utah -- have frozen enrollment in the CHIPs program and declared that they will not cover any more eligible children.

California Gov. Arnold Schwarzenegger wants to join that list by freezing enrollment in the state’s Healthy Families program -- which he praised during his campaign -- on Jan. 1.

Add it up and the result is severe -- in some places catastrophic -- reductions in coverage. The changes in Texas will deny coverage to as many as half a million low-income people, the center calculates. In Florida, the number is 74,000. Schwarzenegger’s plan would freeze out nearly 114,000 eligible children of the working poor in California next year.

States are facing perhaps the worst fiscal crisis since World War II, with combined deficits last year of nearly $80 billion. But even so, the assault on the health-care safety net is shortsighted.

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Both Medicaid and CHIPs are federal-state partnerships, with Washington paying most of the bill. That means for every dollar the states cut from those programs, they lose at least that much in federal aid.

And eliminating insurance for low-income families doesn’t eliminate their need for health care. Without insurance, they will be less likely to visit doctors. But they will still come to emergency rooms when problems can no longer be ignored. That means public hospitals and clinics will face mounting bills for uncompensated care that further strain their already tenuous finances.

It’s virtually guaranteed that the 2004 presidential election will feature a serious debate between President Bush and the Democratic nominee over how to expand coverage to the uninsured. But the crisis in the public health-care system can’t wait that long. Washington and the states need to act now.

The cutbacks would have been even worse if Congress hadn’t forced Bush earlier this year to accept a temporary $10-billion increase in federal Medicaid payments to the states. Washington has a responsibility to prevent further reductions by extending that aid before it expires next summer.

But states have a responsibility too. Each year it becomes more apparent that the tax cuts states adopted during the boom years of the late 1990s have left many of them without enough revenue to provide the basic services their citizens expect, not only in health care but in education.

With states facing deficits of another $40 billion to $50 billion this year, the diagnosis for the health-care safety net isn’t complicated. If states won’t generate more revenue, more low-income children, most of them in working families, won’t have their earaches treated before their hearing is endangered.

Talk about a profile in courage: Governors are punishing poor children to avoid asking for anything more from comfortable families already luxuriating in tax cuts from Washington.

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Ronald Brownstein’s column appears every Monday. See current and past columns on The Times’ Web site at www.latimes.com/brownstein.


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