From HillaryCare to KerryCare
Plus ça change.
May 24, 2004, Vol. 9, No. 35 • By DAVID GRATZER
SENATOR JOHN KERRY hasn't done much to distinguish himself on health care policy. A look at his voting record shows him to be hesitant on medical savings accounts, although not on tort lawyers' trashing HMOs, concerned about the long-term sustainability of Medicare, yet delighted to expand the entitlement--a pretty typical Democrat, but nothing more than that. In his twenty years in Congress, Senator Kerry has never made health care a priority, passing not a single bill in this area. Candidate Kerry, on the other hand, is just wild about health care and has made it the major domestic issue of his campaign.
Asked what his first act in office would be, Kerry told the Associated Press: "I will send to Congress a health care plan that stops spiraling costs, covers every child in America, and makes it possible for every American to get the same health care as any member of Congress."
Why the sudden interest in health care? For one thing, it's polling very well. A recent Fox News poll shows that the economy and health care are the biggest concerns to the American public. By contrast, only 9 percent of respondents listed terrorism as a major concern. Thus, last June, Kerry released a plan to overhaul American health care.
Since the collapse of HillaryCare, Democrats have avoided sweeping initiatives. Kerry, thus, proposes small ideas, and a whole lot of them. Most notable about his effort, however, is the price tag. So say even its supporters. Kenneth Thorpe, deputy assistant secretary of health and human services under Clinton, pegged the total bill to be $972 billion over ten years. "It's his single biggest program, spending-wise," notes Thorpe, "and his single biggest domestic priority." Thorpe, a professor at Emory University, did recently revise his estimate down to a mere $653 billion. But to reach this politically more convenient number, he had to suddenly discover incredible savings that would be brought about by disease prevention, computerization, and other magic to improve the bottom line of Kerry's plan.
Not only pricey, Kerry's proposal is big on promises. He hopes to cut in half the number of uninsured Americans, reduce the price tag of employee coverage by $1,000 per worker, and provide millions of children with insurance. His biggest idea is to "give every American access to the health care plan that the president and members of Congress already have." All federal employees are covered by the Federal Employees Health Benefits Plan (FEHBP), a program that allows each worker to choose from a menu of insurance choices. Kerry isn't proposing to expand FEHBP. Rather, he wants to set up another program, and then force insurers participating in FEHBP to cover those in the new insurance pool. Premiums would be community-rated (in other words, the same for everyone), a model of equity.
Kerry also wants to expand existing government programs to cover children in families whose incomes are up to 300 percent of the poverty level. He aims to help offset the high cost of health insurance, offering to pay 75 percent of expenses above $50,000 if employers pass the insurance savings on to their employees. Add to the mix requirements (mandates) for wellness and disease management and tax credits for the uninsured. Finally, with an eye on Medicare's costs, he favors drug reimportation from Canada.
The basic problem with KerryCare is its impracticality. Take his commitment to provide federal employee-style health care to every interested individual or business. Since joining would be voluntary, the odds are that the older and less healthy would be overrepresented in the rolls. Further complicating matters is Kerry's plan to make the insurance community- rated. This attempt at equity would further attract older, sicker patients (they would get a relatively good price on the insurance), while those typically without insurance--healthy, young men and women with low incomes--would balk at the cost.
Voluntary purchase pools have been tried extensively at the state level, but the results haven't been encouraging. Researchers at the think tank RAND studied California, Connecticut, and Florida--states with the largest such efforts in the nation--and found the schemes had little impact on health coverage. In fact, in those three states, fewer businesses ended up offering insurance to their employees. State experimentation, observes health economist Tom Miller in Regulation magazine, shows that "low-risk individuals and employer groups are less likely to join, and they are most likely to leave early," making the pools unsustainable.