Progressive States at NCSL

If you are attending this year's NCSL conference in Boston (Aug. 5-9), we invite you to celebrate this year's many progressive legislative victories with Progressive States Network at a reception on Tuesday, August 7th at 6:30pm at the Westin Copley Place.

We are happy to sponsor this event with our partners the AFL-CIO, American Federation of Teachers (AFT), AFSCME, Center for American Progress Action Fund, Center for Policy Alternatives (CPA), International Brotherhood of Electrical Workers (IBEW), National Labor Caucus of State Legislatures, and the Teamsters (IBT).

We are also pleased to have Robert Kuttner, columnist for The Boston Globe and co-editor and co-founder of The American Prospect, deliver his perspective on the current state of the country and how states can bring about the reforms we need.  Bob Kuttner writes regularly for The American Prospect on political and economic issues, and he has just completed a book, to be published in 2007, on the connection between political and economic inequality and systemic risks facing the economy.

An Unholy Alliance Dumps the Sick Onto the Individual Health Insurance Market

It's an unholy combination when corporate America's worst health care offender, the Right's consumer-driven health care ideology, and the Religious Right come together to abuse the tax system in an effort to undermine group health insurance standards and place everyone into the morass that is the individual health insurance market. 

A Utah-based company founded by Paul Zane Pilzer, best-selling author of "God Wants You to Be Rich", and backed by Sam's Club, a unit of Wal-Mart Stores Inc., as well as AOL founder Steve Case, is offering a tax-based scheme to small businesses that replaces employer-sponsored small group insurance with monthly contributions to what are known as employee "health reimbursement accounts", or HRAs, where employees get some cash but have to use it to find their own individual insurance.   

An Illegal Scheme? Critics, including health policy experts, Texas regulators, and even an insurance company in Utah, say the scheme violates federal law, namely ERISA's requirement that if employers offer health insurance, they must offer it fairly to all employees in order to spread risk and maximize affordability for as many people as possible. By sending employees out on their own to navigate the pocked insurance system, they leave older employees and employees with medical histories without affordable options - or no insurance at all. Only 6 states now require insurers to guarantee issue in the individual market, meaning insurers in the other 44 states can refuse coverage to individuals because of their health status or perceived risk. Although 33 other states have high risk pools, which offer insurance to individuals denied coverage in the individual market, premiums are often 150% to 200% higher than market prices and some states routinely close enrollment when costs run too high, like Florida and its high risk pool which has been closed to new enrollment since 1991.

Pilzer says he is "doing God's work switching people from group plans to individual insurance." In interviews with outlets like the Christian Broadcasting Network and its rabid religious-right idol Pat Robertson, Pilzer argues disingenuously that individual insurance is cheaper than small group coverage. In making his pitch as the champion of corporate-backed health reform, he neglected to point out that individual insurance is cheaper mostly for those under age 25, who have a clear medical history, and get only bare-bones coverage and a high deductible. 

In reality, Pilzer's scheme is a variation of the Right's latest attempt to prevent comprehensive health care reform and distract Americans from real solutions. The Right's answer to the health care crisis, from President Bush to recent proposals by candidate Rudy Giuliani, is to dissolve the employer-based system in favor of individual insurance with poor benefits and high deductibles. 

Dangerous State Experiments: As we profiled in our recent report of state activity in 2007, Taking the Lead, some state lawmakers have enacted programs for low-income residents that build on the Right's philosophy. Oklahoma expanded health care for children to 300% of poverty, but the program hinges on a voucher for families to purchase private coverage, an approach that doesn't guarantee affordable options for families even with the vouchers. And, Indiana just enacted a new health plan providing catastrophic coverage with a Health Savings Account to adults with incomes up to 200% of poverty. Even state officials are skeptical they'll be able to convince low-income residents with little to no disposable income to participate in a program with high cost-sharing. 

States have a stake in ensuring employers continue to make meaningful contributions to health coverage (either by shoring up employer-sponsored insurance or creating state-based programs where employers contribute on behalf of their employees) and resisting attempts to push families into the private individual markets. When families go without coverage and health care, state governments and taxpayers inevitably bear the brunt of the resulting social and economic costs.

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