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Kerry and Bush offer dramatically different health care proposals
by Mark Zdechlik, Minnesota Public Radio
August 25, 2004

Democrat John Kerry speaks to undecided voters during a town hall-style meeting at Anoka Technical College Thursday in Anoka, Minnesota. (Photo by Scott Olson/Getty Images)

Democratic presidential candidate John Kerry holds a campaign event Thursday morning in the Twin Cities area to talk about improving health care coverage. Kerry says his plan would save the average family $1,000 a year in medical premiums. President Bush is telling voters one of the best ways to reduce the cost of health care would be to clamp down on "frivolous lawsuits."

St. Paul, Minn. — Whenever President Bush or Sen. Kerry campaigns in the region, one topic that frequently comes up is the rising cost of health care. And that's no surprise. Polling shows voters rank the issue high among their concerns, right behind national security and the economy.

Democrats accuse Bush of failing to address the problem. In early July, on his last visit to Minnesota, John Kerry ripped the Bush administration during a speech at a rally in Cloquet. "For four years -- four years -- how long does it take a president to figure out there's a problem in the health care system?" Kerry asked.

Last week in Hudson, Wisconsin, President Bush took credit for "modernizing Medicare" by adding a drug discount benefit for seniors. As he often does, the president blamed the rising cost of health care on medical malpractice lawsuits and the higher insurance premiums that often result.

	Bush in Wisconsin

Bush criticized Democratic vice presidential candidate John Edwards, who has had a successful career as an attorney specializing in negligence cases.

"You have to choose between patients and doctors, and plaintiffs' attorneys -- you have to make a choice," Bush said. "You can't be for both. My opponent made his choice, and he put him on the ticket."

As the rhetoric suggests, Kerry and Bush are proposing dramatically different approaches to health care coverage.

"These are quite different philosophies," says Princeton University professor Uwe Reinhardt, an expert on health care policy. "The Kerry plan essentially helps cement the employment-based system by subsidizing it with federal dollars ... while the Bush plan basically says we're not going to do anything about business one way or the other -- but ... we will (help) individuals to buy their own health insurance."

Reinhardt says Kerry's plan would cost an estimated $600-$700 billion over 10 years. Bush's plan would cost less than $100 billion over the next decade.

Specifically, President Bush is proposing tax incentives for people who buy their own health insurance, and for people who set up personal medical savings accounts. Bush asserts that if people paid directly for their health care, they would be more likely to use only services they really need -- thereby reducing the overall cost.

Bush's plan would also increase funding for community health clinics to help poor Americans. It would also allow businesses to pool their buying power to bring down the cost of health insurance.

The Kerry plan essentially helps cement the employment-based system by subsidizing it with federal dollars ... while the Bush plan says we will (help) individuals to buy their own health insurance. - Uwe Reinhardt, health care policy expert

Kerry's plan would increase funding for medical safety-net programs like Medicaid. He promises that it would provide health insurance coverage for 99 percent of children. It would also offer tax credits for businesses that provide health insurance to employees, and it would allow individuals to buy into the same health insurance program that's available to many government employees, including members of Congress.

Kerry says the hefty price tag for his proposals would be covered largely by rolling back tax cuts on people who earn more than $200,000 a year. He says he would also pay for it by reducing health care administration costs, and allowing the re-importation of prescription drugs from other countries, where they're sold at deep discounts relative to prices in the U.S.

Reinhardt says Kerry's plan would insure about 27 million of the roughly 44 million Americans currently without coverage. Bush's approach would extend coverage to 4.5 million of them.

But what about President Bush's contention that frivolous lawsuits are inflating the cost of health care?

"A lot of these lawsuits are driving docs out of business... I'm telling you," Bush said in Hudson last week.

Reinhardt says President Bush is exaggerating the extent to which lawsuits are driving up the cost of health care in the United States. He says studies have concluded that malpractice insurance premiums account for less than 1 percent of the total cost of health care.

Reinhardt says the biggest problem facing the nation's health care system is administrative costs. He says nearly 25 percent of the $1.7 trillion spent every year in the United States on health care is spent on paperwork. He says the candidates should spend more time focusing on that.

"That should be a health care speech with nothing else but just that in it," Reinhardt says. "Obviously such a speech would have to have a vision -- what would I do to get rid of this? And I don't think Kerry has done that, and the Bush camp wouldn't -- because that doesn't fit into their scheme of things."

Reinhardt says savings from cutting administrative costs in half could finance health insurance for every American currently not covered.

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