Tim Kaine has matched Jerry Kilgore’s health care plan with one of his own. According to the May 27 edition of the Richmond Times-Dispatch, the thrust of his plan is to encourage small businesses to offer medical insurance to their employees and, thus, reduce the huge number of Virginians–one out of seven–lacking healthcare coverage. Strategically, the idea is sound. The best way to increase access to the healthcare system is to encourage more businesses to offer medical insurance. The devil is in the details.
Kaine wants to use tax credits to encourage small businesses to offer the coverage. I’m wary of expanding the use of tax credit when Jerry Kilgore recommends them to advance his healthcare plan, and I’m wary when Tim Kaine recommends them. Kaine admits this his proposal could cost the state as much as $250 million a year if all small businesses signed on. His argument that the state would recoup some of that money through lower Medicaid pay-outs doesn’t hold water. The plan would benefit only working Virginians, and working Virginians don’t qualify for Medicaid.
By relying on tax credits, Kaine avoids confronting the reasons why health insurance are unaffordable to begin with. One reason is that Virginia mandates more medical benefits in a health insurance plan than almost any other state. Insurance companies are restricted by state law from offering an affordable, “bare bones” policy that covers only essential medical needs at a lower price. That leaves working class Virginians with a choice between a gold-plated plan and… nothing. That’s the underlying problem, and Kaine needs to address it directly
Kaine’s second idea is a good one. He would encourage the creation of voluntary insuance pools that would allow small businesses to spread risk and buy insurance more affordably. According to the Times-Dispatch, “He said he will work to overturn legal restraints that keep trade associations from starting their own insurance pools.” Now that’s addressing an underlying problem. As is so often the case, some kind of government rule or regulation is interfering with the workings of the marketplace.