“The Most Important Health Care Legislation of Our Lifetimes”

That is how Gov. Mitch Daniels describes his health care reform plan (which the Indiana legislature passed last night) in an email his staff helpfully forwarded my way.  According to the Indianapolis Star, Daniels’ plan will:

  • Expand Medicaid eligibility for pregnant women and children
  • Provide health insurance subsidies to individuals making $20,420 and families of four making $41,300 per year (i.e., 200 percent of the federal poverty level)
  • Provide those beneficiaries with $500 of free preventive care and $1,100 in a health savings account
  • Institute a “slacker mandate” that requires insurers to allow children to remain on their parents’ insurance policy up to age 24
  • Increase the cigarette tax by $0.44/pack, to $0.995/pack

Daniels was understandably moved.  Here is his full quote:

The health plan passed last night can fairly be described as the most important health care legislation of our lifetimes.  I have asked a host of people whether they can think of a better example and nobody has.  I am excited about the passage of the plan and what it can mean for uninsured Hoosiers and for low-income children, and, of course, to try to bring down the second-highest smoking rate in America.

Did Gov. Daniels (R!!) bother checking with anyone who has actually set foot outside of Indiana?  Whatever the case, here are a few things the Daniels plan will also do:

  • Crowd-out private coverage
  • Encourage cigarette smuggling and related crime
  • Trap more Indianans Hoosiers in low-wage jobs
  • Re-create in Medicaid the dependence problems that Congress sought to eliminate with welfare reform
  • Impose a brutally regressive tax on the poor.  According to Harvard’s Kip Viscusi: “The usual concerns about regressive taxes involve those that are regressive in percentage terms, that is, the poor pay a higher percentage of their income in taxes than do the wealthy. Cigarette taxes are actually so regressive that the poor pay a much higher absolute level of taxes than do the wealthy. In 1990, people who made under $10,000 per year paid almost twice as much in cigarette taxes as those who made $50,000 and above. The people who will bear the cigarette taxes are not the legislators who enact them but rather the janitors and support staff for the legislature.
  • Cost more than projected

When conservatives finally do start questioning why so many supposed good guys keep turning to the Dark Side, they might launch their inquisition with an examination of the Medicaid program, which makes Democratic and Republican governors alike this very tempting offer: big government at one-half the price.