Easing Pains

Medical care for the jobless

President Reagan had once promised that his Administration would help laid-off workers whose health insurance had disappeared with their jobs. Said he: "We're certainly not going to stand by and see that people, because of the misfortune of unemployment, are going to be denied necessary medical care."

The details of the Administration's solution emerged last week, and they came from Office of Management and Budget Director David Stockman. There were few surprises. The suggested program provides no new money, relies heavily on voluntarism, and is freighted with pay-as-you-go features. Stockman told a Senate Finance Committee hearing: "Any new program, no matter how meritorious, must be tax-financed in the same bill that creates the new measure."

In general the proposed plan would rejigger several existing programs. One recommendation would change the tax code to deny employers deductions unless they continued to offer health-insurance coverage to laid-off workers for at least a year, or until they found other jobs. The former employee would pay the premiums, but at group costs, which are usually lower than individual rates. The Administration also said it would back legislation requiring employers to permit the jobless to enroll in the health-care plans of their working spouses. At least 40% of the nation's 11.4 million unemployed have working partners, said Stockman, and nearly one-third of the jobless could retain health benefits that way.

For the long-term unemployed and for families who have run out of unemployment benefits but are not eligible for Medicaid, the Administration recommends opening up Title XX social-service block grants. To finance these new beneficiaries, the Reagan proposal suggests changing the Administration's health-cost-containment legislation now under consideration in Congress. That legislation would require that a family be taxed on an employer's contribution to a worker's health insurance if it exceeded a "tax cap" of $175. At present, health-insurance benefits are not taxable to workers. The plan proposed by Budget Director Stockman would lower the amount to $160. If implemented by 1984, the change is estimated to raise an additional $500 million in revenues.

Congressional reaction was tepid, and it split as much along regional as along partisan lines. Many Congressmen from states hit hardest by unemployment felt the package did not go far enough. "We have a national problem that requires a national solution," declared Democratic Senator Donald Riegle of Michigan, where the unemployment rate has exceeded 10% for the past 39 months. "The Administration's economic policies helped create the problem, and the Administration is obligated to help solve it." The proposal to lower the tax cap to $160 drew some hoots. "The Administration is making a terrible philosophical and political mistake," Republican Senator Bob Packwood of Oregon warned Stockman. "Eventually [the public] will turn and snap at us. You're going down the wrong path if you want to cut off debate on national health insurance."

To underscore the dissatisfaction, Senator Edward Kennedy of Massachusetts introduced a bill on the same day as Stockman's testimony, co-sponsored by the six other Democrats on the Senate Labor and Human Resources Committee. It would establish a Government-funded program of health benefits for the unemployed. The proposal calls for grants to states of $900 million this fiscal year, and $2.7 billion in each of the next three years. The Kennedy bill was only the latest congressional indication of the desire to ease the pain of unemployment. Republican Senators Robert Dole of Kansas, David Durenberger of Minnesota and Arlen Specter and John Heinz of Pennsylvania, and Democratic Senator Riegle of Michigan and Democratic Congressman Henry Waxman of California have already introduced bills to provide such health care. All would require federal spending; thus a clash between Capitol Hill and the White House seems inevitable. Said Specter: "We're going to have a tug of war on this issue." This file is automatically generated by a robot program, so viewer discretion is required.