Bush Health Plan Cost: $100 Billion : Insurance: The President’s proposal relies on tax breaks and would guarantee access to care. But he offers no clear explanation of how the package is to be funded.

President Bush on Thursday unveiled a much-touted plan that he said would cut health costs and guarantee access to care, but he offered no clear explanation of how his Administration would pay the $100-billion price tag.

“We’ll figure that out,” Bush said as he began a cross-country trip to drum up support for the election-year initiative.

In presenting the package, he proclaimed that its market-based approach would “preserve what works and reform what doesn’t” in a health care system choked by mounting costs. He warned that alternatives proposed by his Democratic rivals would force the nation to “swallow a cure worse than the disease.”

At the heart of the Bush proposal is a plan to offer new tax breaks to help low- and middle-income families pay for health care. At the same time, it would slash Medicaid funding by about $35 billion over five years, in part, to force states to model their systems on health maintenance organizations.

In contrast to various Democratic proposals that promise health care for all, sometimes under government auspices, the Bush plan promises only universal access to health care through tax credits and tax deductions designed to make health insurance affordable.

The proposed new assistance to low- and middle-income families would decline according to wealth. A needy family of three or more whose income fell below the poverty line would receive the maximum benefit of $3,750.

To remove another barrier to coverage, the Bush plan would require insurance companies to provide health plans to all groups that seek them. It would prohibit insurance firms from denying an application because of the illness of an employee who had previously been insured.

The plan, however, would stop short of requiring that insurance companies provide coverage even to new applicants, offering no guarantee to those denied health care because of AIDS, cancer or other pre-existing conditions.

But what Bush described as a “comprehensive” plan otherwise left unspecified how its vast costs would be borne. While pointing to a series of ways to make the health care system more efficient, Administration officials said that they would begin to fill in the details only if Congress shows interest in the program.

Their studied vagueness underscored the politics behind a program that apparently will be used to attack rival Democratic proposals as steps down a slippery slope toward socialized health care.

While describing the Bush program as a free-market alternative, the White House seemed determined to avoid giving offense to any quarter. Its 94-page “white paper” was at its most specific in a final chapter outlining “problems with other approaches.”

For his part, Bush used his appearance here less to discuss the details of his plan than to attack the so-called “play or pay” approach and other Democratic-backed alternatives. Although the plan to cut Medicaid funding would generate the program’s biggest savings, he made no mention of that potentially controversial idea in his 25-minute speech.

“We stand at a crossroads,” he told the Greater Cleveland Growth Assn. “We can move forward to dramatically reform our market-based system or we can force ourselves to swallow a cure worse than the disease.”

Bush assured the group of business leaders that his plan would “give Americans the kind of health care they want and deserve and put an end to the worry that keeps them awake at night.”

The approach aims to preserve a health care system that Bush said should be based on “choice, not central control.” Administration officials said that the plan’s main cost-cutting measure--to end unlimited federal reimbursement of Medicaid expenses--is designed to force states to emulate the private sector in creating scaled-down health care plans.

But the absence of further details about how the plan might be funded reflected what White House officials conceded was an election-year reluctance to offer targets for political attack.

The officials said that the vagueness reflected the results of a fierce internal White House battle in which Chief of Staff Samuel K. Skinner and reelection campaign officials warned that specificity could backfire against Bush.

Among the plans cast aside in the final days, the officials said, was a proposal to tax the insurance benefits of high-income workers enrolled in the top-of-the-line health care plans that are blamed for inflating health care costs.

Bush’s political advisers were said to have warned that such a step could alienate Republican voters. Similarly, the White House rejected a plan that would have cut Medicare funding after officials raised concerns that such a step would become vulnerable to Democratic criticism.

Even in proposing that Medicaid funding be provided to states on a per-capita basis rather than through unlimited reimbursement, the Administration was careful to specify that both elderly patients and the long-term disabled would be exempt from the new restrictions.

Without such potential sources of revenues, the Administration proposal cited cost-containment measures--including reductions in administrative costs and savings from “more healthy personal behavior” as the source of the additional $65 billion needed to pay the costs of the program over five years.

In a briefing for reporters, senior Administration officials insisted that the current health care system is so inefficient that such gains could be easily realized. “They are real, they are considerable and they are not pie in the sky,” one official said.

So monumental is the waste, fraud and abuse, the officials insisted, that the $100-billion program could be put in place without adding to any taxpayer’s burden.

“Why are you so uncomfortable with the notion of a win-win situation?” one official demanded. But the officials conceded privately that the White House harbored no illusion that the package could win a congressional embrace.

“This is a year for debate,” one official said, “and what this plan does is give us a script for the campaign.”

Among those raising questions about the Bush plan were the American Medical Assn. as well as some hospitals and insurers.

Dr. James Todd, executive vice president of the American Medical Assn., said that he was “very encouraged” by the White House proposal, calling it “a good first step.”

But Todd added pointedly: “Cost containment must be a priority in any meaningful reform” and that the AMA has “strong concerns” regarding any proposal, such as the Bush plan, that involves limiting Medicare and Medicaid spending.

That concern was further underscored by Cathy Feierstein, a senior official of the Time Insurance Co., in Milwaukee, one of the nation’s largest sellers of individual and small-group medical insurance.

“We’re very concerned about any caps on Medicare and Medicaid. That would result in more cost-shifting by providers to privately insured patients,” she said. “And that ultimately will drive up the rate of insurance and put more people in ranks of the uninsured. We think that would be a hidden tax.”

To maximize the political impact of the health care plan, the White House had held its details from the State of the Union address and federal budget that Bush proposed last week.

The health care plan Bush outlined here has been in the making for more than eight months. But its drafting was accelerated late last year after an upset Democratic victory in a Pennsylvania Senate race made clear that health care had become an issue of election-shaping importance for many voters.

Bush traveled to Cleveland to formally unveil his health care proposal, in part, as a tribute to efforts of health care reformers in the city to encourage small businesses to band together to gain access to more affordable insurance coverage, a principle embraced in the White House plan.

But his audience here appeared no more than mildly enthusiastic about its contents and interrupted his speech only once with applause, when Bush referred to a previously announced proposal to impose limits on malpractice suits.

Later in the day, Bush continued on to Las Vegas, making Nevada the 49th state he has visited during his presidency, to renew his appeal for health care reform. He flew to San Diego Thursday night and is to appear today at a family health care center in the Logan Heights area of the city and at a Rotary Club gathering before returning to Washington.

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Health Plans: Bush, Congress and the Candidates

President Bush on Thursday proposed to help Americans meet soaring health care costs with a set of federal tax breaks. Here is a look at the health care plans that have been unveiled:

Bush: Vouchers and Tax Credits

It relies on a system of vouchers and tax credits that would provide up to $3,750 that poor or middle-income families could spend on health insurance. Lesser benefits would apply to people with higher incomes. The Administration estimates the plan would cost $100 billion over five years and offers a variety of suggestions to pay for it, including proposals to hold down spending on Medicare and Medicaid.

The Candidates’ Ideas

Bob Kerrey: Introduced “Health USA,” in July. It would create an agency financed by state and federal revenues that would pay all the bills and would replace Medicaid and Medicare. The plan would allow for a variety of insurance plans, which would have to meet federally set minimum standards and benefits. Individuals and businesses would not pay insurance premiums; instead, they would fund the program through payroll, excise and income taxes, based on their ability to pay. This is a replica of Canada’s health care system in which provincial governments set tight spending limits.

Paul E. Tsongas: Introduced “Health for All Americans” in October. The plan would require all businesses to provide insurance to full- and part-time workers, paying at least 90% of premiums for most plans. Those unable to get work-based coverage would be eligible for plans through “buyer agencies” in each state. Would also retain Medicare for nursing home benefits, offer tax incentives for businesses to hold down insurance costs, ban pre-existing condition limitations and standardize benefits.

Tom Harkin: Has not offered a specific plan but favors national health insurance and of making prevention the cornerstone of his national health policy.

Bill Clinton: Has said he believes in universal health coverage, supports pay or play proposals that would require employers to pay employee premiums or extra payroll taxes; would establish a federal board to standardize benefits, control costs and the use of technology.

Edmund G. (Jerry) Brown Jr.: Has said he supports universal health insurance, would encourage alternative non-traditional forms of care, such as acupuncture, prefers eliminating private insurance in favor of special savings accounts to pay for medical care.

Plans Coming Out of Congress

Play or pay: The bill, sponsored by Sens. Edward M. Kennedy (D-Mass.) and George J. Mitchell (D-Me.), would require employers either to pay 80% of their employees’ health insurance coverage or pay a tax of 7% to 9% to a new federal program for the uninsured.

National health insurance: Other Democratic plans involve some form of national health insurance plan in which medical providers remain a private industry but private insurance is replaced by government-financed coverage, much like Medicare.

Savings accounts: House Republicans have devised a plan that would establish special savings accounts, similar to individual retirement accounts but intended to cover medical expenses.