Their Preferred Issues
Both Bush and Gore address three basic problems: (1) the problem of the un- or under-insured; (2) prescription drug coverage under Medicare; and (3) patient rights under managed care. (They also have made other proposals, such as Gore's plan to give tax credits to people who care for the chronically ill and Bush's push for more funds for community and migrant health care plans, but these three are by far their major focuses.)
Neither candidate addresses health care inflation, even though health care costs are rising at between eight and 10 percent per year (compared with an overall rate of inflation of around three percent)(Chicago Tribune, 4/14/00). This is unfortunate, since rising health care costs are, in part, responsible for people lacking adequate health insurance and being unable to afford prescription drugs, and for employers and other third-party payers pushing people into managed care plans where they may feel their rights are being compromised.
Unfortunate, but perhaps not surprising: the problem of increasing health care costs, arguably, is much tougher than the problems the candidates do tackle. It will be interesting to see if health care inflation emerges as an issue later in the campaign. In addition, neither candidate has said much about nursing home care, although Gore does propose up to $3,000 in tax credits for persons caring for people with long-term illnesses.
The Big Three
Let's examine what the two candidates have to say about these three issues:
Lack of Insurance
Everyone seems to recognize that we have a serious problem in the U.S.: at any one time, 44.3 million individuals, many of them children, lack health insurance, and many people who have health insurance don't have policies that meet all of their perceived health care needs. Two points are not so obvious: Why do these people lack insurance and what should an adequate insurance plan cover? The second point is important from a policy perspective because of its relationship to the overall lack-of-insurance problem: If our goal were merely to provide everyone with some health insurance, we could solve our problem quite easily by giving everyone an entitlement to, say, one aspirin tablet a year. Everyone would now be insured, but of course for only one aspirin. To resolve the problem of lack of insurance without being absurd, we must decide what health care people should have access to at a minimum, and make sure that our solution provides at least this degree of access. (President Clinton's health insurance proposal attempted to do this, for example, by stipulating a minimum benefits package.)
The first point is also critical because it pertains to whether those who lack health insurance have voluntarily made this choice. Twenty percent of the uninsured have access to health insurance through their employer but do not purchase it. (Dallas Morning News, 4/2/00). This may be because they can't afford to pay their portion of the premiums or because they are young and healthy and gambling on the odds of not getting sick. Subsidizing the purchase of insurance will not result in everyone becoming insured; most likely, some individuals in the latter category still will decline. Yet health insurance only functions as insurance (as opposed to a sort of lay-away savings plan) if those who do not submit claims are among those who are paying the premiums. (That is presumably why former senator Bill Bradley proposed to require that every newborn be insured before they left the hospital.) So subsidies to aid the purchase of insurance can be targeted at two very different populations - the poor and the gamblers - and the difficult question is how much assistance should be given to each group.
Bush's Plan
Bush would provide tax credits to help people purchase insurance on the open market. Individuals with up to $15,000 in annual income would receive a $1,000 tax credit and families with up to $30,000 in income would receive a $2,000 credit (Wall Street Journal, 5/1/00). The credit would be given as a refund to people who didn't owe taxes (New York Times, 4/24/00), and would be provided on a declining scale to individuals and families until their incomes reached $45,000 and $60,000 per year respectively (Atlanta Journal and Constitution, 4/13/00; New York Times, 4/24/00). The credit only would be available to people who did not qualify for Medicaid and who did not have the option of purchasing insurance through their employment (LA Times, 4/12/00).
Estimates differ on how much the plan would cost and how many uninsureds would be covered. One report says the cost would be $40 billion over five years (Atlanta Journal and Constitution, 4/13/00). Another estimates $135 billion over 10 years (Washington Post, 4/12/00). Bush's aides are reported to have said that the plan would cover as many as 18 of the 44 million uninsured (New York Times, 4/12/00). A health economist estimates that about 3.1 million people without insurance would be induced to buy it, and that about 10 million people who already have insurance would receive some financial benefit.(Washington Post, 4/12/00)
Bush also would eliminate a number of restrictions currently imposed on Medical Savings Accounts ("MSA's"), which allow people to set aside funds tax -free to pay for health insurance or health care. These plans, which, at present, are limited to self-employed individuals and small employers, would become available to all (Chicago Tribune, 4/13/00), and $500 would be permitted to be rolled over from one year to the next (USA Today, 4/12/00).
Gore's Plan
One of Gore's promises is, by 2005, to cover all the 11 million U.S. children who currently lack health insurance. He would do this first by expanding an existing government program, the state Children's Health Insurance Program ("CHIP").
This program was created in 1997 and provides federal funds to assist states in providing health coverage for children whose family income exceeds the federal poverty level ("FPL"), which sets the basic eligibility cut-off for Medicaid. CHIP allowed states to expand the income level to 200 percent of the FPL. To cover more children, Gore would increase this to 250 percent of the FPL, or $41,000 for a family of four. His campaign estimates that this would provide Medicaid-like coverage for one million additional children. Children in families with incomes above 250 percent of the FPL could buy into CHIP or Medicaid, providing coverage for as many as two million additional children. Moreover, Gore would encourage states to enroll children already eligible for CHIP by simplifying the enrollment process and providing bonuses to states that achieved enrollment targets.
In addition, Gore would provide a tax credit of up to 25 percent of the cost of insurance premiums for families that did not receive coverage though employers (USA Today, 4/12/00). Gore would also expand the CHIP and Medicaid programs to cover the parents of eligible children, with the states free to establish upper income limits. Finally, he would permit persons between the ages of 55 and 65 to buy into Medicare, again using the tax credit to cover up to 25 percent of the cost.
The cost of Gore's plan is estimated at $150 billion over ten years, although this presumably includes the cost of providing prescription drug coverage, discussed below.
The Two Positions Compared
The main problem with Bush's plan is that his tax credits would not pay for much of a health insurance package. The average cost for health insurance in the U.S. is approximately $5,000 a year for a family of four, not $2,000, which is all that the Bush tax credit would provide. A family purchasing $2,000 worth of health insurance would have to settle for a policy that denied coverage for many basic services or that charged high additional amounts in deductibles and co-payments, which the family could not afford. Most likely, the family would buy something resembling catastrophic coverage - a policy that kicked in once the family medical bills exceeded a certain threshold. But families poor enough to receive the tax credit might not be able to afford to pay the uninsured bills, leading them to forego health care until their ailments became serious or emergent - i.e., more expensive to treat. Another criticism of Bush's proposal is that it could discourage employers from providing health insurance to employees. Finally, some people object to medical savings accounts on the ground that they can lure healthier people away from buying insurance, thereby making insurance more expensive for less healthy people.
The main problem with Gore's proposal is the extent to which it relies on the CHIP program. This program has been plagued by low enrollments and it remains to be seen whether the enrollment incentives Gore proposes would give states the impetus to significantly improve the enrollment system. Moreover, CHIP is a government insurance program and some people may prefer the Bush approach which would give them money (in the form of the tax credit or refund) to purchase private insurance. Finally, the CHIP program is not an entitlement program and the states have considerable discretion to limit eligibility and benefits.
Prescription Drug Insurance
Bush's Plan
Prescription drugs would be covered under Medicare. There are no details yet.
Gore's Plan
Medicare beneficiaries could buy prescription drug insurance that would pay 50 percent of prescription costs, up to a total of $5,000 a year, and 100 percent of costs after the beneficiary paid $4,000 out-of-pocket. Coverage would be voluntary (like Part B) and people electing it whose incomes exceeded $11,000 a year would pay premiums.
The Two Positions Compared
This is not possible until Bush provides details of his proposal.
Patient Rights Under Managed Care
Bush's Plan
Bush supports managed care protections like those provided under Texas law [which, ironically, he opposed as governor (Houston Chronicle, 4/13/00)]. Texas law allows patients to sue managed care plans, but holds plans to the standard of care of a "reasonable managed care plan." It is unclear what this standard means or how it would be interpreted in a lawsuit.
Gore's Plan
Gore supports the Democratic version of the Patient Bill of Rights (H.R. 2723), including the right to sue plans (including ERISA plans) as provided under state law.
The Two Positions Compared
Gore is more supportive of patients' rights under managed care.
Conclusion
Anyone expecting grand health reform proposals like the President's Health Security Act will be disappointed in the Bush and Gore proposals; both are incremental, rather than sweeping. This gives them less reach, but a greater chance of being enacted. Neither candidate's proposals completely solve the problems of the uninsured, prescription drug costs or patients' rights under managed care. Whoever wins, the question will be whether they deal with enough of the problems to cause pressure for further reform to abate.
