It's one thing to criticize. What's needed is a low-risk way to
help people who can't afford insurance. The U.S. Census Bureau shows that of
the 47 million people identified as "uninsured," 14 million are
already eligible for government programs such as Medicaid and SCHIP (for
children) and simply need to sign up. Another 10 million have household incomes
over $75,000. That leaves 23.7 million people who need help affording
insurance, not 47 million.
Food debit cards help 27 million people buy food, similar to the
number who need help buying health coverage. In all fifty states, debit card
technology has transformed the federal food stamp program, which used to be
notorious for fraud and abuse. (Only 2 percent of card users are found to be
ineligible, according to the General Accounting Office.) Cards are loaded with
a specific dollar amount monthly, depending on family size and income, and
allow cardholders to shop anywhere. The same strategy could be adapted to
provide purchasing power to families who need help buying high-deductible
health coverage. It's what all Americans used to buy, and it's
all that's needed for families with moderate incomes, who can afford a routine
doctor visit.
Debit cards are better than refundable tax credits for three
reasons. Many people are uninsured only temporarily (about 22 percent) and not
at tax time. Also, some people don't file an income tax return. Finally, a
refundable tax credit would remove even more people from an obligation to pay
federal income tax at a time when half of Americans don't pay it.
Providing sliding scale assistance, based on household income, to
families to purchase this type of coverage would cost $20 to $25 billion a
year. The cost estimate could vary for two reasons. First, only a fraction of
people who are eligible for government programs actually apply (50 percent of
those eligible for food debit cards). Second, U.S. Census data show that many
of the uninsured are newcomers to the U.S. (some here illegally).
The largest influx of immigrants in any seven years in American history
occurred in the present decade. In this same decade, the lion's share of the
increase in the number of uninsured took place in the five Border States. In San Francisco, 61 percent of the uninsured are not U.S. citizens, according to
public health officials there. The public has not yet decided whether newcomers
should be covered.
Whatever the costs of debit cards, it will be less in both dollar
terms and risk than a healthcare overhaul that forces individuals and
businesses to buy coverage and puts European-style limits on healthcare
consumption.