When Americans go to the polls Nov. 2, President Bush and John Kerry’s respective health-care proposals should be high on the list of priorities. Voters need to know which candidate is better positioned to get the millions lacking coverage insured in the most efficient manner possible and to handle the looming Medicare crisis. Moreover, the next president will need to settle unresolved issues from last year’s prescription-drug legislation, and to deal with the controversy surrounding drug reimportation. Neither candidate has the ideal solution for our health-care woes. But a careful review of the proposals set forth by Messrs. Bush and Kerry shows that the president’s plans are better for the nation.
At the heart of Mr. Bush’s health-care strategy are the dual principles of ownership for consumers and competition among providers for position in the industry. At present, most Americans do not own a health plan. They get coverage from their employers, risk losing benefits when they change jobs and face a bewildering array of third-party payment options.
Mr. Bush’s plan makes significant moves to widen the options consumers can choose from. Its most promising feature — the creation of health savings accounts (HSAs) — is already law, having passed as part of last year’s landmark Medicare bill. HSAs let consumers create tax-preferred accounts, which, as the president puts it, allow Americans to “own their own health care” and retain the account when moving from one job to another. For those electing not to establish an HSA, the Bush plan allows a health-care tax credit of as much as $3,000 for lower-income families so long as such families buy high-deductible insurance. HSAs effectively combine insurance with a new tax-deductible savings plan to give consumers more control over their health-care choices than current arrangements allow.
Under the president’s proposal, competition would also be enhanced. Another intriguing idea, creating association health plans (AHPs), would allow small employers to combine purchasing power in the market to obtain coverage. Coupled with a new provision to allow people to buy insurance from providers in other states, AHPs promise to greatly increase competition among providers.
But the president’s plan is expensive. The Lewin Group, an independent health-care consulting firm, says it would insure 8.2 million currently uninsured persons at a cost of $227.5 billion over the next 10 years. Mr. Bush’s prescription-drug bill is already expected to cost more than $500 billion over a decade, and a Medicare crisis still looms on the horizon.
Yet it is certainly preferable to Mr. Kerry’s proposal. Although the Massachusetts senator’s plan is not without merit, it fails where Mr. Bush’s plan succeeds in important respects. First, it lacks the consumer-centered vision of the president’s proposal. Second, it promises to dampen incentives for innovation. Third, it opens the door for increased future government control. And fourth, it is significantly more expensive than what Mr. Bush is offering.
The centerpiece of Mr. Kerry’s proposal, as he put it in the debates, is to “let everybody buy into the same health-care plan senators and congressmen give themselves.” He also proposes to expand Medicaid eligibility and enable millions of additional children to receive health care at federal expense. To accomplish all this, Mr. Kerry would among other things provide hefty subsidies to employers in exchange for their assent to a host of new regulations. He estimates the cost of his plan to be $653 billion over 10 years. But outside estimates put the price at between $1 trillion and $1.5 trillion over a decade — substantially more expensive than the president’s proposals.
Mr. Kerry asserts that his program could be financed solely by increasing taxes on people making more than $200,000 a year. But as small-business representative Dirk Van Dongen notes on the facing page, there simply aren’t enough of these “rich” people to tax in order to pay for Mr. Kerry’s health plan. Moreover, the Massachusetts Democrat’s $200,000 threshold would hit hundreds of thousands of small businesses which pay taxes at the personal rate. In other words, Mr. Kerry would harm the very small businesses he claims to want to help purchase health insurance for their workers.
It’s also worth noting that Mr. Kerry opposes much of the president’s market-based reform agenda, and he also wants Americans to be able to reimport drugs freely from Canada. This latter position is one of the most potentially damaging elements of his platform. Mr. Bush has thus far opposed the move on grounds that it would permit contaminated drugs to enter the country. But loosening restrictions could harm public health in another way: by undercutting pharmaceutical firms’ incentive to create new drugs. Mr. Kerry seems essentially oblivious to this problem.
For voters who want a health-care plan that balances the demands of cost-effectiveness and consumer needs — all the while making strides to cover more uninsured Americans — the choice is clear: Mr. Bush’s plan is by far the better one.
Please read our comment policy before commenting.