April 30, 2007 5:26PM # “The Most Important Health Care Legislation of Our Lifetimes” By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE That is how Gov. Mitch Daniels describes [his health care reform plan](https://www.cato.org/2006/11/21/hoosier-tax-and-spender/) (which the Indiana legislature passed last night) in an email his staff helpfully forwarded my way. According to the *[Indianapolis Star](http://www.indystar.com/apps/pbcs.dll/article?AID=/20070430/LOCAL190102/704300418/1108/LOCAL1901)*, 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](https://www.cato.org/2007/01/26/gruber-simon-crowd-out-is-clearly-significant/) - [Encourage cigarette smuggling and related crime](https://www.cato.org/pub_display.php?pub_id=1327) - [Trap more Indianans Hoosiers in low-wage jobs](https://www.cato.org/pub_display.php?pub_id=6841) - Re-create in Medicaid the [dependence problems](https://www.cato.org/pub_display.php?pub_id=4528) that Congress sought to eliminate with welfare reform - Impose a brutally regressive tax on the poor. According to [Harvard’s Kip Viscusi](https://www.cato.org/pubs/regulation/regv25n4/v25n4-13.pdf): “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](https://www.cato.org/pub_display.php?pub_id=6407) [guys](https://www.cato.org/pub_display.php?pub_id=7169) keep turning to the Dark Side, they might launch their inquisition with an examination of the [Medicaid](https://www.cato.org/pub_display.php?pub_id=4049) program, which makes Democratic and Republican governors alike this very tempting offer: big government at one-half the price. ##### Related Tags [General](https://www.cato.org/general), [Health Care](https://www.cato.org/health-care), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).