The media says that the states are taking the lead on health reform. The number of health reform commissions that are meeting in various states, the Massachusetts plan, and the fact that California is (always) working on single payer are invariably listed as evidence. Oregon and Switzerland, once popular, are missing in action. Their citizens decisively rejected single payer.

The policy focus of the commissions created by legislation is typically universal insurance coverage, defined as making sure that everyone has someone else to pay for his medical care. The authorizing legislation makes this clear. Focusing all policy on the uninsured is a brilliant notion. It is tirelessly promoted by those who dislike private medicine so much that they think that no one should be allowed to have it. They assert that any program requiring a sign up, an income check, or any sort of fee creates “A Barrier To Access.” This must be avoided at all costs, so any program having any such requirement cannot possibly be adopted. It does not, after all, ensure coverage for all. In British Columbia, even the Canadian insurance system has an estimated uninsured rate of 1 percent simply because people do not pay the required provincial fee.

If all reforms will fall short unless everyone is insured, then the only health system that meets the cover everyone criterion is the National Health Service (NHS). Universal medical care, a better policy goal, does not meet the requirements of those who hate private medicine. By international standards the U.S. already has universal care. If medical care was the policy focus, then reform would focus on reducing its cost. In addition, the discussion would include ways of allowing innovation by deregulating the payments and insurance systems that the regulatory crowd (“we’re from the government and we’re here to help you”) have been screwing up since the 1930s.

Most authors of current U.S. reform proposals appear to view Medicaid as the perfect stepping stone to the NHS. They plan to insure everyone by expanding Medicaid to 300, 400 or 500 percent of the federal poverty level (FPL). They prefer to ignore the fact that illegal aliens make up a big chunk of the uninsured. Illegal aliens are only eligible for Medicaid matching funds under EMTALA. They have to be actively delivering a new U.S. citizen or have immediately threatening illnesses or injuries. Those who focus on coverage for all finesse this problem by ... ignoring it. They talk about residents. Most people don't realize that the definition of resident differs from program to program. DMV definitions are not the same as tax definitions. For Medicaid purposes, a resident is often someone who says he lives in a particular place. No fixed address is required. A fixed address would be “A Barrier to Access.” To prove income eligibility, one need only bring a recent paystub. This invites fraud, as the audit of the Massachusetts uncompensated care fund showed.

Extending Medicaid to the middle class appears to be the current goal, and quoting everything in terms of FPL is a nice way to get there. Most people think poverty means struggling for food or housing. They don’t realize that 300 percent of FPL is roughly the national median income. For a single person, 300 percent of the federal poverty level is an income of $30,630. The median annual earnings for men in the U.S. who worked full-time year round in 2004 were $41,194. Median earnings for women, who are more likely to take jobs that pay less, were $31,374. People interested in exposing this scam might consider cuddling up to the federal poverty level tables. It also helps to take a vow to swear off FPL shorthand and try to state cut-offs in terms of income.

For practical purposes, a 300 percent of FPL standard means that most high school graduates in their first jobs will be eligible for Medicaid if they aren’t still on their parents’ plans under the slacker provisions that have passed in some states. Slacker provisions make insurance carriers cover kids until they are 26. In short, adult children (a typical oxymoron) can delay getting their own policy thanks to that mandate. This increases the probability that they will be uninsurable by the private sector and dependent on government programs. A 22 year old man in good health can get fairly rich individual health coverage for less than $100 a month in reasonably regulated states. Some policies are roughly the price of cable television packages that include ESPN.

As a slacker’s dream, the proposed Medicaid expansions have only one problem. A CDC report notes that in 2003-2004, 25 percent of office-based physicians weren’t accepting new Medicaid patients. The reason? Medicaid reimbursement has a nasty tendency to be less than physician cost. Medicaid is also the major generator of uncompensated care for hospitals, so hospitals are closing in areas with large populations of Medicaid residents.

Evidence that the reformers the media lauds live in an alternate universe also comes from the fact that while state governments whine about the fraction of their budgets devoured by Medicaid, they support reforms to solve the problem by expanding Medicaid. Recent proposals suggest that they plan to adopt the New York State strategy: tax the daylights out of everything that can’t move, for in the long run we are all dead.

With a little more reform like this, U.S. citizens might finally be assured that their health care, and their economic opportunity, will finally match the standard of care prevailing in Canada, the U.K., and much of Europe.