D.C. Plan Could Aid Uninsured

from the Washington Post

New Taxes Would Help Pay for Care

By David Nakamura

A D.C. Council member will propose a sweeping plan next week to mandate health-care coverage for all District residents by offering a city-subsidized program for the uninsured that would be funded through new taxes on health companies and cigarettes.

David A. Catania (I-At Large), chairman of the council's Committee on Health, said his legislation, titled Healthy DC, is aimed at an estimated 25,000 uninsured residents who are not eligible for Medicaid programs or the city's Health Care Alliance.

Under the proposal, residents would pay monthly premiums of between $20 and $100, depending on their gross income. The city would subsidize about $21 million of the cost, with CareFirst BlueCross BlueShield contributing $5 million and making their providers available, Catania said yesterday.

The plan, if approved by the council and Mayor Adrian M. Fenty (D), would begin in July 2009, and residents would have until January 2010 to enroll or risk being fined $250. There would be exceptions to the mandatory enrollment, such as for those with religious objections, Catania said.

In all, Catania's plan would spend about $50 million in public money on the new program and supporting health-care initiatives. The money would be raised in several ways: by increasing the tax on commercial health-care premiums from 1.7 percent to 2.0 percent; by implementing a 2.0 percent premium tax on HMOs; and by doubling the cigarette tax to $2 a pack.

Catania said the benefits outweigh the costs.

"We are currently paying for these uninsured individuals today," said Catania, who has scheduled a news conference Monday to lay out details. "We pay for it in uncompensated care in emergency rooms. Those of us who are insured pay an extra premium. What we have not done before is construct a system where people can help themselves."

Catania's proposal comes at a time when the city is wrestling with slowdowns in several revenue streams, including sales, income and deed taxes. Fenty last week proposed a $5.66 billion budget that holds the line on new spending. Catania, however, said his plan pays for itself.

Mayoral spokeswoman Carrie Brooks said yesterday that Fenty is "supportive of the concept" of Catania's plan, but she added that the mayor has not finished reviewing the details. Council Chairman Vincent C. Gray (D) could not be reached for comment yesterday and it was unclear how many of the 13 council members support the plan.

Jack Evans (D-Ward 2), chairman of the council's Committee on Finance and Revenue, said he also supports the concept, but he warned that the costs could balloon.

"If there's a way to beat the system, the people beat them," Evans said. "The idea is usually noble, but the implementation is a disaster."

Catania said he has anticipated potential problems that could increase costs, such as companies scrapping their own health-care programs, and uninsured people moving from the suburbs into the city to take advantage of the low fees. He said his legislation mandates that residents live in the District for six months before taking part and requires companies to disclose their health-care programs on their tax returns. Companies that terminate or change their programs would risk sanctions, Catania said.

Judith Solomon, a senior fellow at the Center on Budget and Policy Priorities, said Catania's proposal stacks up well against similar initiatives in other cities across the country because costs are low for residents.

"The fact that something is this affordable and comprehensive is a good step forward in coverage," she said.

Barbara Lang, president of the D.C. Chamber of Commerce, said she has participated in several meetings with Catania and CareFirst representatives. She said the chamber supports the plan, though she said she had not seen the final version and intends to review the new taxes more closely.

Catania said he has been working on the plan for six months with CareFirst, analysts from George Washington University's school of health, business leaders and others. He stressed that though the proposal allows for fines for those who do not buy health insurance, he does not intend it to be punitive.