Like the hottest New York fashion designers, Washington politicians have decided that the "in" issue this political season will be "KidCare," providing health insurance for uninsured children. But rather than examining this issue from medical or economic approaches, the issue will likely be addressed politically. KidCare proponents want to force members of Congress to vote on the emotionally charged question, "Are you for or against health insurance for children?" As one union official put it, "We want to use KidCare the way we used Medicare last year." The media should not get caught in that trap. They should start by asking some fundamental questions:

Is there an uninsured children "crisis"?

The catalyst for KidCare is the supposed explosion in the number of children lacking health insurance and, therefore, presumably receiving inadequate care. However, in reality, the percentage of uninsured children rose less than one percent from 1990 to 1995, from 13 percent to 13.8 percent -- hardly an explosion. Of the ten million children who lack health insurance, three million are eligible for, but not participating in, Medicaid, the federal/state health insurance program that covers children of families whose incomes fall below 130 percent of the poverty line. It is estimated that another 1.5 million uninsured children live in households with incomes over $40,000 per year. Most of these families simply prefer paying their children's health care expenses out-of-pocket. Over half of all these uninsured Americans go without insurance for less than six months.

Furthermore, the low cost of child-only health care policies indicates that many families who do not insure their children have decided to spend their money in other areas. A recent survey found that child-only policies cost about $100 per month, with some as low as $50 per month.

Does a lack of insurance mean no health care?

Lack of health insurance does not necessarily preclude children from obtaining health care. Federal, state, and local governments operate countless programs to promote health. Health services for poor children are specifically targeted by dozens of those programs, including the Maternal and Child Health Services Block Grant to the States, the Residents of Public Housing Primary Care Program, Childhood Immunization Grants, and Emergency Medical Services for Children. Are KidCare proponents willing to exchange these government programs for government-sponsored health insurance?

In addition, private organizations, such as the Shriners, operate hospitals to care for seriously ill children -- at no cost to their families. Doctors and private hospitals often donate services to families in need.

What is the real solution?

The answer for uninsured children -- indeed for uninsured Americans of all ages -- lies not in a massive and expensive new federal intrusion into the health care system, but in changing the tax treatment of health insurance. Currently, employer-provided health care is purchased with tax-free dollars, while workers who purchase health insurance on their own must do so with after-tax dollars. That difference in tax treatment creates a disparity that effectively doubles the cost of health insurance for people who must purchase their own. For example, a small business might purchase each employee a $4,000 health insurance policy using tax-free dollars. A person working for a small business that offers no health insurance would have to earn over $8,000 before taxes to pay for the same $4,000 policy. As a result, Americans have been increasingly driven to pay for their health care through third-party insurers and to purchase insurance through their employers. That, in turn, has led to rising health care costs and made it harder for Americans without employer-provided insurance to obtain coverage.

Congress took the first tentative step toward alleviating that problem last year by enacting a limited pilot program of medical savings accounts under which individuals may spend pretax dollars, drawn from their own personal accounts, on routine health care expenses. One of the best things Congress could do for children this year would be to expand that program.

The media should not get caught in the trap of sensationalizing this fabricated crisis. Rather, they should examine free-market health care reform options that would benefit not only children, but all Americans. Asking these three questions would be a good place to start.

Michael Tanner is director of health and welfare studies and Naomi Lopez is an entitlements policy analyst with the Cato Institute.

— Rich Noyes