House SCHIP Legislation Would Repeal Dubious “45-Percent Threshold” Provision

Publication Date: July 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein; James Horney

Research Area: Health

Keywords: Economic projections; Health care costs; Health insurance; Income diversity

Type: Report

Abstract:

The 45-percent threshold is an ideologically laden measure that is based on a misleading measure of Medicare’s financial health; it is designed to take certain options for improving Medicare financing off the table. As a result, the 45-percent threshold could make it harder to address the Medicare’s financing problems in an equitable manner, rather than easier. Repealing the 45-percent threshold provision would actually be a positive step; repeal would remove a misguided measure that makes it more difficult to have an informed debate on Medicare’s financing problems and that establishes the wrong goal to aim for in restoring Medicare’s financial health. Removal of the 45-percent threshold consequently should increase the potential for Medicare reform legislation that is effective and equitable to be considered in the future.