In the context of September 11th and the current recession, our attention now shifts to meeting the health care needs of displaced workers.  Due to rising insurance premiums and growing unemployment, it is clear that any economic stimulus package should have provided health insurance coverage for displaced workers.  

In addition, our attention shifts to meeting the current needs of States that are experiencing tight Medicaid budgets.  At a time when States are strapped for extra dollars and leaning towards cutting back on services to Medicaid recipients, Federal Medicaid assistance to States is dwindling.  There is something very wrong with this picture and it is clear that we must act to assist States in providing appropriate Medicaid services so as not to increase the number of uninsured. 

Unfortunately, the President has the wrong idea when it comes to addressing this health care crisis.  The proposed FY 2003 budget asks for $89 billion over 10 years for individual tax credits.  The budget would provide $1,000 for individuals and $2,000 for couples.  The tax credits are designed for people who cannot get health insurance through their jobs or people who have recently become unemployed due to 9/11 and the declining economy.  

These types of tax credits do not make the health care system within easier reach of people who lack medical coverage.  The "free-market approach" offered by the administration leaves unemployed and uninsured workers with little leverage over insurers that have set their average annual premiums at about $2700 per person and $7200 per family.  

Displaced workers and the uninsured need state-run plans that guarantee a basic package of benefits.  In addition, these proposed tax credits dismantle the system of employer-based health insurance.  What I, along with other Democratic colleagues would like to see are tax credits that can be used towards purchasing employer-based health insurance that guarantees a basic package of benefits.  In addition, it's important for us to encourage proposals that provide coverage to certain vulnerable pockets of populations, such as parents of children eligible for CHIP or the near elderly population aged 55-65.

Another criticism of the proposed FY 2003 budget, is that the administration cuts Medicaid payments to public hospitals by $9 billion over five years.  Public hospitals throughout the nation will lose millions of dollars in Medicaid payments this year that help finance health care for the uninsured, poor and disabled.  These deep cuts not only harm Medicaid recipients, but also aggravate fiscal problems plaguing most states, including my home state of New Jersey.

The number of people on Medicaid is expected to grow by as much as 3 million during this recession, with about 2 million of them potentially being children.  If the administration cuts Medicaid just as more people need it, we are going to see a dramatic increase in the uninsured.  Leading economists also believe that substantial cuts in state Medicaid budgets would have dramatic ripple effects on the national economy. 

Under federal Medicaid rules, states can pay public hospitals up to 150% of the Medicare rate for certain services.  In an attempt to reduce Medicaid spending, the administration is seeking to reduce Medicaid's upper payment limit to 100% of the Medicare rate and HHS officials in January published a regulation that would make such changes effective March 19.  

Let there be no doubt about it.  The cost of ignoring the uninsured problem will be staggering in both human and financial terms if a viable and effective solution is not developed.

In the absence of any meaningful commitment by the Republicans to develop a system that provides for coverage of all Americans, we must continue to forge ahead with efforts to make insurance more accessible for key sectors of society.  Democrats have been out front in crafting proposals to accomplish this goal, but time and again the Republicans have shown they are not serious about addressing the nation’s most pressing health care reforms in any meaningful way.  Based on the President's proposal, it seems like Republicans would rather strip the poor of their limited incomes and throw the uninsured population into an insurance market that provides no consumer protections.

I hope at some point my colleagues on the other side of the aisle will be ready to consider meaningful solutions to the health challenges facing the country.  These problems are far too important to the average American and the federal government for us to be doing anything else.