Anemic Healthcare Plans

Healthcare should get its Rodney Dangerfield moment of respect tonight during the debate between President Bush and Sen. John F. Kerry. If things go true to form, Bush will blame the problem of soaring healthcare prices on trial lawyers, while Kerry will point to greedy health insurers and unfair prescription drug policies. Too bad the issues are nowhere near that simple.

Given that both candidates have been advised to avoid talking about the real, complex woes afflicting the U.S. healthcare system, it’s likely the debate will quickly mire itself in digressions. Like: Which is more sensible, Bush’s modest plan to give health insurance to 7 million Americans over 10 years (at a cost of at least $90 billion) or Kerry’s much more ambitious plan to insure 27 million Americans over a decade (costing at least $650 billion)?

What’s troubling about such tussles is that they will distract voters from what should be their key concern: Though both candidates have plenty of ideas about how to increase healthcare expenditures, neither has a viable plan to reduce them.

That’s a big problem because U.S. healthcare costs, which are rising faster than inflation, have trapped the nation in a vicious cycle. As premiums rise, more businesses and individuals forgo coverage, throwing more patients into public programs. To make up for the low reimbursements of those programs, doctors, hospitals and insurers charge employers and individuals with private coverage even more. As two top healthcare economists, Princeton’s Uwe Reinhardt and Johns Hopkins’ Gerard Anderson, put it in a recent journal article, “It’s the prices, stupid.”

It’s unlikely that the debate’s moderator, Charles Gibson, the sunny anchor of ABC’s “Good Morning America,” will be able to expose the faulty economics inherent in both candidates’ healthcare reform plans, but we hope that someone will pose hard questions like these:

* Mr. President, though tax credits have been the centerpiece of your healthcare reform proposals since 2001, you haven’t indicated how you’d pay for them. Further, your proposed tax cut of up to $3,000 to help low-income families buy health insurance won’t do much to pay for such policies, which now cost $9,000 to $10,000 a year. So where does the money come from?

* Sen. Kerry, you propose extending coverage mostly by expanding Medicaid and the Children’s Health Insurance program to enroll families with incomes up to three times the federal poverty level. You say you will reduce employer healthcare costs by about 10%, but because employers’ premiums rose by 11.2% this year alone, how can you argue those savings will stem the tide? Moreover, you propose to pay for your plan by repealing the taxes President Bush cut on people making more than $200,000 a year. What happens if Congress doesn’t let you fully repeal that tax cut? What’s Plan B?

There’s one last question that we wish Gibson or some other moderator would ask Kerry and Bush: Why are you advocating reforms far less ambitious than any of your predecessors, when the problems have grown much worse?

Kerry and Bush are both fond of saying all Americans should have access to the same health plan that covers members of Congress. But in recent years, that plan’s costs have risen even higher than those of the average employer-based plan. Instead of disingenuously promising Rolls-Royce coverage, which they are unlikely ever to find the money for, they should support Volkswagen plans for a bigger population.

In a report to Congress earlier this year, the federal Institute of Medicine urged U.S. leaders, for both moral and fiscal reasons, to commit to guaranteeing that kind of basic health insurance to all Americans by 2010. The institute showed that the cost of providing medically necessary benefits to all 45 million uninsured Americans could be kept to under $70 billion a year, not much more than Kerry would spend to insure 27 million people, if the federal government did what both Bush and Kerry have so far been too timid to do: provide subsidies only for the most cost-effective medical treatments and drugs.

In recent months, think tanks ranging from the conservative Heritage Foundation to the centrist New America Foundation have come to support a government mandate for all Americans to have health coverage, much as all citizens are required to have auto insurance now.

Despite lofty talk from both candidates, neither is proposing the kind of fundamental reforms the system needs and neither is being realistic about funding. One can only hope the winner has a better plan to be unveiled after the election.