2 Very Different Cures for Healthcare Crisis

Although the presidential campaign has been dominated for months by Iraq and, more recently, the candidates’ military records, few issues matter more to voters -- or more profoundly divide President Bush and Sen. John F. Kerry -- than the plight of the U.S. healthcare system.

The system’s problems now are coming into sharper focus on the campaign trail. Bush and his Democratic challenger began running ads on health policy in the last week, and their differences on the topic were spotlighted by an exchange Monday between the two camps.

The issue’s new prominence has been spurred by a spate of reports documenting the rising cost of healthcare -- and the dearth of adequate coverage for many.

Bush and Kerry do not simply disagree on how to deal with these troubling developments. They want to take the system in radically different directions.

Kerry would expand the existing system of employer-provided insurance and federal health programs for those who slip through the cracks. Bush, in healthcare as in other aspects of social policy, wants to rely on market-oriented alternatives to government programs.

Bush on Monday portrayed Kerry’s healthcare plan as a “government takeover.” Citing a new study by the American Enterprise Institute, a conservative think tank, the president also charged that the plan would cost $1.5 trillion over a decade -- more than twice the estimate by the Kerry camp.

“What would you expect from a senator from Massachusetts?” Bush told supporters in Michigan. “That’s what you would expect. A government takeover of healthcare with an enormous price tag.”

Kerry aides said Bush’s critique was off-base because the Democrat’s health plan would be built on private insurance as well as government programs. They dismissed the new cost estimate as riddled with false assumptions, and they noted that it came from a think tank with links to Vice President Dick Cheney and his family. Cheney’s wife, Lynne, was a senior fellow for the institute.

In “town hall” meetings and campaign ads, Kerry has stepped up his effort to blame Bush for recent bad news about healthcare and to decry the consequences of its rising cost. “It’s wrong to allow skyrocketing healthcare costs to choke off new jobs, eat up family incomes and leave millions uninsured,” Kerry said last week in Iowa.

He also has begun to connect his criticism of Bush’s foreign policy to the administration’s domestic priorities, saying the money spent on Iraq was a “wrong choice” that shortchanged health and education needs at home.

Democrats say the healthcare issue is rich with political potential for Kerry because it is a top concern for many voters and he has a detailed plan. A Time magazine survey published last week showed that Kerry led Bush on the question of who best could solve the nation’s healthcare problems, 48% to 42%.

But many Democrats worry that Kerry has not succeeded in capitalizing on the issue. They say that is partly because voters’ concerns about national security have eclipsed just about every domestic policy issue. Also, they acknowledge that it is difficult to distill such a complex issue into the shorthand of the standard stump speech.

Still, some Democrats say Kerry’s handling of the healthcare issue reflects a broader problem afflicting his campaign: an inability to effectively go on the offensive against Bush with a crisp, clear message.

“Kerry has a good healthcare plan -- but without a good bumper sticker,” said Rep. Rahm Emanuel (D-Ill.), who was an aide to Bill Clinton when healthcare was a big issue in his 1992 presidential campaign.

Healthcare is an important aspect of both candidates’ broader themes.

For Kerry, healthcare’s rising cost is a big part of the “middle-class squeeze” that he says is Bush’s legacy. For Bush, the health insurance system is -- like pensions and workplace rules -- an outmoded, government-regulated relic of another era. He would replace it as part of his push for an “ownership society,” which he says would give individuals more responsibility and control over their lives.

Each campaign acknowledges that big problems plague the healthcare system, including three related but distinct issues:

* The growing number of uninsured Americans, which the Census Bureau recently reported had grown to 45 million in 2003. That was the third year in a row that the number increased.

* Rising costs for those who are insured. The Kaiser Family Foundation reported last week that premiums for employer-sponsored health insurance grew more than 11% in 2004 -- the fourth consecutive year of double-digit growth.

* Rising costs for seniors, who are the biggest consumers of prescription drugs. Although Medicare has begun subsidizing drug purchases, seniors will not be immune from rising healthcare costs. The Medicare premium for doctor bills and other non-hospital costs will jump 17% next year.

So far, campaign debate on healthcare has focused on reducing the ranks of the uninsured and making insurance more affordable for working people.

Although the precise cost of the candidates’ proposals is in dispute, by any measure Kerry’s plan is more far-reaching and expensive than Bush’s. The Kerry campaign estimates that his healthcare plan would cost about $650 billion over 10 years and provide coverage for 27 million more Americans by expanding existing government programs and increasing subsidies for private insurance.

Bush’s plan centers on tax breaks to encourage individuals to buy their own health insurance or to save for future expenses. Bush aides estimate that his plan would cost $145 billion over 10 years and provide coverage for more than 11 million uninsured people.

But the same American Enterprise Institute study Bush cited in criticizing the cost of Kerry’s plan projected that the president’s proposal would cover 6.7 million additional Americans.

The Kerry plan does not seek the kind of sweeping overhaul that President Clinton unsuccessfully sought early in his first term, and would instead rely on existing programs.

For instance, to increase coverage for lower-income people, Kerry proposes expanding federal-state health programs to cover almost all children and more working poor adults.

To expand access to private policies, he proposes subsidies for small businesses to ensure that workers buy their own coverage.

To cut private insurance premiums, Kerry proposes having the federal government take responsibility for workers’ “catastrophic” health costs -- in excess of $50,000 a year -- if their employers pass the savings to workers in lower premiums. Kerry estimates that could save families $1,000 a year.

Bush’s approach is based on the assumption that costs are best controlled by making consumers more cost-conscious. So his plan aims to help people buy their own insurance or medical care rather than expand government and employer-based coverage. He argues that, on their own, consumers would find better deals on insurance and avoid unnecessary care.

To make insurance more affordable, Bush proposes a tax credit of up to $3,000 for low-income families to buy health insurance. He also proposes expanding a tax incentive for people to save their own money for routine healthcare.

As part of the 2003 Medicare law, Congress provided tax-favored health savings accounts for people with high-deductible polices. Contributions are tax deductible and money can be withdrawn tax free -- provided it is used for medical expenses.

This provision was approved over the opposition of Democrats, who said it was a tax shelter that would appeal most to the wealthy and the healthy. That would leave traditional health plans with poorer and sicker people, who would face higher premiums, critics say.

Bush wants even more incentives for people to have these accounts. He would give employers tax credits for contributing to their workers’ accounts and provide money to low-income people to help them start health savings accounts.

Wallsten reported from Muskegon, Mich.