[GW Bush] President Bush believes that all Americans should have access to affordable, high-quality health care. To achieve that goal, he has:
Created New Health Savings Accounts. The President signed legislation that makes HSAs available to millions of Americans. HSAs offer flexible, affordable insurance options for small businesses and individuals. The Treasury Department estimates that HSAs as enacted, in addition to the President’s proposal that allows individuals to deduct the cost of premiums for major medical coverage purchased in conjunction with a HSA, will result in over 1 million newly-insured Americans. This estimate may be too low, since insurers who have begun selling HSAs this year have found that at least one-third of their customers had been uninsured for at least six months.
Created a Prescription Drug Benefit under Medicare. In December 2003, President Bush signed legislation that will make prescription drug coverage available to 40 million seniors and people with disabilities through Medicare. The new benefit will become available on January 1, 2006. Until that benefit is implemented, beneficiaries will have access to Medicare-approved prescription drug discount cards that will save them 15% - 30% off the retail price of most brand name drugs, with even larger discounts on generic drugs. In addition, low-income beneficiaries will receive $600 this year and next year to help them purchase their medicines.
Opened or Expanded Community Health Centers. Access to health care has been extended to 3 million additional Americans -- part of the President's five-year plan to fund 1,200 new or expanded sites to serve an additional 6.1 million people. Today there are more than 600 new or expanded health centers delivering preventive and primary care to patients in medically underserved communities across America.
Strengthened Medicaid and SCHIP. HHS helped states develop new approaches to expanding coverage and avoiding reductions in their Medicaid and SCHIP programs. HHS-approved waivers and state plan amendments have expanded eligibility to more than 2.6 million people and improved benefits for more than 8 million people since 2001.
Provided a Health Insurance Tax Credit. The trade bill provides a tax credit to help workers who lose their jobs due to international trade obtain health insurance coverage. The tax credit has helped thousands of these displaced workers get insurance coverage.
Building On Our Success. President Bush believes more must be done to provide greater access to affordable health care. To achieve that goal, the President has proposed:
Medical Liability Reform. The President proposes to address the skyrocketing medical malpractice premiums through national adoption of proven minimum standards to make the medical liability system more fair, predictable, and timely. A more fair, predictable and timely medical liability process speeds compensation to patients, reduces health care costs, and improves access and quality of health care.
Association Health Plans (AHPs). The President supports legislation that enables small employers to pool together in order to offer health insurance options to their employees by giving small businesses the same purchasing power that large employers and unions have. CBO estimates that by 2008, 7.5 million people would obtain health insurance through AHPs and 600,000 would be newly insured.
Refundable Tax Credit. The President proposes a refundable tax credit that will make health insurance more affordable to millions of Americans who do not have employer-provided insurance or public insurance. The Treasury Department estimates that the tax credit will extend insurance to 4.5 million Americans.
HSA Deductibility. The President proposes to allow individuals with HSAs to deduct 100% of the premium for their catastrophic health care coverage from their taxes.
Health Information Technology. The President proposes to use modern health information technology to achieve high-quality care, reduce preventable medical errors, and reduce costs. President Bush’s FY’05 Budget request doubles the amount of funding for demonstration projects for broader adoption of health IT systems in communities and states to $100 million. The President announced a goal that most Americans have personal electronic health records within the next ten years, and is working to make sure the federal government is fostering the adoption of these technologies.
Kerry’s Proposals for Health Care
State Children’s Health Insurance Program (SCHIP)/Medicaid
Under Kerry’s plan, the federal government would take over 100% of the costs for the 20 million children currently enrolled in state Medicaid plans if states agree to:
Provide SCHIP: to children who are not eligible for Medicaid but whose family income is less than 300 percent of poverty ($55,200 for a family of four).
Expand SCHIP: to families with incomes less than 200 percent of poverty ($36,800 for a family of four).
Cover Childless Adults: States must provide health care coverage to adults whose income is under 100 percent of poverty ($8,980 for individuals or $17,960 for a couple).
Legal Immigrants: Senator Kerry would also repeal the current Congressionally mandated 5-year waiting period for eligibility for legal immigrant pregnant women and children.
What’s the catch?
This is a complete departure from the federal-state partnership of the Medicaid program and will free states from any incentive to control costs.
States must meet these conditions to receive $15 billion in bonus payments during the first three years of the program.
Research by RAND Health suggests this expansion would result in as many as 18 million Americans losing their employer-sponsored coverage and end up on Medicaid, where many will be forced into HMOs and/or have their choice of doctors limited because many physicians do not accept Medicaid patients. Not only would this result in millions of people losing coverage they like, it would force taxpayers to bear costs that today are borne voluntarily by the private sector.
Pool based upon Federal Employees Health Benefits Program (FEHBP)
This pool would be available to those in firms with 50 or fewer workers and uninsured individuals (including workers between jobs).
Employers would have to contribute at least half the premium.
Employers participating would receive a 25% refundable tax credit for all workers under 150% of poverty, phasing out at 300% of poverty.
Workers between jobs may purchase insurance through their former employer or the pool.
Workers in poverty would receive a 75% subsidy phasing out at 300% of poverty
Individuals without access to employer-sponsored insurance (and not eligible for public plans) could purchase insurance through the pool and receive a 25% refundable tax credit.
What’s the catch?
The Kerry health plan would draw much of the private health insurance market into a nationwide "health alliance" created and tightly regulated by the federal government.
Health care costs continue to rise not for lack of government involvement, but because too much government has crippled the normal market processes that allow individuals to have more control over their health care spending.
Kerry’s remedy for rising health care costs is additional regulation and higher tax-supported subsidies. To participate in the Kerry health alliance, large employers would face government requirements on the level of contribution they currently make to employee health premiums. Health plans within and outside the health alliance would be required to offer specific mandated benefits which just increase costs.
In the past three years, Sen. Susan Collins (R-ME) and Sen. Mary Landrieu (D-LA) have introduced 3 separate bills to provide a tax credit for small business to purchase health insurance: S. 2042 and S.674 in the 107th Congress and S.100 in the 108th Congress. Despite the fact that he now claims to support this idea, John Kerry never cosponsored any of these bills.
Reinsurance of health care costs
Senator Kerry proposes to reduce health care costs for employers and employees by providing federally financed reinsurance for catastrophic costs. The plan would reimburse employee health plans for 75 percent of catastrophic costs incurred over a $50,000 threshold. Although it is unclear whether this benefit would be available to all employers or only businesses of a certain size, eligible employers would have to meet several requirements to participate in the premium rebate pool.
What’s the catch?
Firms are only eligible if they contribute toward the cost of insurance for all workers, not just full time or those currently eligible; somehow pass the savings back to employees; and encourage the development of disease management programs.
Although Kerry claims that his proposal would reduce overall health care spending, Clinton Administration appointee and Emory University Professor Kenneth Thorpe has analyzed the Kerry plan and concluded that it would merely shift existing costs from premium-payers to taxpayers -- some $290 billion over nine years. (“An Overview and Analysis of the Democratic Presidential Candidates’ Health Care Reform Proposals,” 9/7/03).
Kerry Fails to Address the Fundamental Problem
Historic Cost Increases. According to the Kaiser Family Foundation, expenditures in the United States on health care have increased 87% since 1990, and are more than 5 times the amount spent in 1980. The $1.3 trillion in national health expenditures (NHE) in 2000 represents 13.2% of the Gross Domestic Product (GDP), more than 8 percentile points higher than the industry’s share in 1960. (Kaiser Family Foundation: Trends and Indicators in the Changing Health Care Marketplace 2002)
John Kerry’s health proposal is a $900 billion government expansion that does nothing to deal with the underlying factors driving up higher health care costs. (“An Overview and Analysis of the Democratic Presidential Candidates’ Health Care Reform Proposals,” 9/7/03)
Kerry opposes plans to reduce frivolous medical liability lawsuits. According to a 2003 Joint Economic Committee report, meaningful medical liability reform could lower health care costs sufficiently and another 3.9 million Americans could afford health insurance. A recent survey found that 8 out of 10 doctors say they have ordered more tests than they need to as a defensive measure to avoid litigation, and 3 out of 4 refer patients to specialists more often than they believe is medically necessary. The broken medical liability system drives up costs for patients and for taxpayers – at least $28 billion each year for the federal government alone.
Kerry opposes Health Savings Accounts. A major factor in the rise in health care costs is the removal of the patient from the health care decision-making process. Studies show that consumer-driven health care lowers costs. Aetna recently unveiled results of a nine-month study comparing their consumer-driven HealthFund and a similar population enrolled in the insurer’s PPO plan. Costs for HealthFund participants rose by just 1.5%, compared with 15.7% for the control group. (Source: Aetna press release, “Aetna Research Shows Positive Impact of Consumerism on Health Care Decisions,” 2/16/2004)
Kerry’s plan simply shifts the burden to the taxpayer. What Kerry claims is a “savings” of 10 percent is simply a shift of the burden of high health care costs to the American taxpayer. In addition, the Kerry reinsurance program is only available to employers and insurers who agree to mandates of the level of coverage, the use of savings, and the eligibility of workers.