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(Page 3 of 4)
What would President Bush do to shrink the number of uninsured Americans? Apart from the tax incentives mentioned above, not much. According to a non-partisan economic study quoted in the New York Times last July, Bush's plan would reduce the number of uninsured by only about 1.5 million, leaving the nation with 43.5 million uninsured. His policy reflects the priorities of his first term, in which an extra 1.5 million Americans lost their insurance in 2002 alone.
Bush pledges to infuse an unspecified amount of money into urban and rural "health centers" that treat patients regardless of ability to pay. However, it is inevitable that these centers will deliver far inferior standards of care, contributing to the perception that America is heading toward a two-tiered health system, with superb care for the wealthy, and inferior service for those on Medicare and Medicaid.
These are exactly the kind of results you would expect from a market-based approach. For most products, some consumers will be priced out of the market. Others will have to make do with an inferior product. The luckiest will have access to top quality care and will pay handsomely for it. Market approaches appeal to those who think that health care is a normal product like a soda can or a swimming pool; they tend not to satisfy those who see health care is a fundamental American right.
John Kerry's health care plan brings an entirely different set of ideological assumptions to the table. Like Bush, Kerry says he wants to reduce costs, increase coverage, and improve quality. But Kerry's plan clearly puts expanding coverage at the top of its agenda, appropriating sizable sums of money for just that purpose. According to independent economic analysis, the plan would cost $653 billion over ten years. Most of that money would be used to expand Medicaid to cover twenty-seven million people currently without insurance. To finance this expansion, Kerry would roll back the Bush tax cuts for those earning over $200,000 a year. In the Kerry plan, the winners clearly subsidize the losers.
Kerry's most important innovation involves an elaborate expansion of Medicaid, the health insurance program for the poor. Under current law, the states run Medicaid, partially financed by block grants from the federal government. In the last several years, however, deficit-ridden states have cut back on Medicaid spending to avoid busting budgets. In some states, even individuals below the poverty line are not eligible for Medicaid if they are childless adults. Although we tend to assume that Medicaid covers the poorest Americans, leaving the working-poor and lower-middle class struggling to obtain health care, in fact, six million Americans living below the poverty line lacked any health coverage in 2003.
The deal Kerry is offering to the states is a sort of entitlement swap: the Federal government will agree to take on the cost of all 20 million children currently on Medicaid if the states expand the program to cover children living on income less than three times the poverty line, families living on income less than twice poverty, and childless adults under the poverty line. Through this scheme alone, more than 18 million people would gain health coverage, including virtually every child. Cash-strapped states will be eager to unload their Medicaid burdens on the Federal government, especially with the additional $20 billion dollar "state bail-out" sweetener Kerry offers to states who promise not to cut Medicaid.
In addition to the Medicaid expansion, Kerry pursues a variety of other measures designed to extend health coverage to the uninsured. He would end the current 5-year mandatory waiting period that immigrant children must face before they are eligible for Medicaid. He would use the power of the presidency to issue an executive order forcing employers to award domestic partner benefits to same-sex couples. Workers between jobs, who represent many of the uninsured, would receive a seventy-five percent tax credit to help pay for health costs. As an incentive for small businesses to provide their workers with health coverage, Kerry would offer refundable tax credits of up to fifty percent of health costs. He would also allow all workers who don't get coverage from their employer to buy into the federal health plan, which would enjoy some of the lowest premiums due to its huge bargaining power. In contrast, individuals and small businesses currently purchasing insurance for a small number of people often pay the highest premiums because their bargaining power is minimal.
For people in the top two percent of incomes who already enjoy stellar health insurance, the Kerry plan will raise taxes only slightly. Those believing that a healthier workforce contributes to a more powerful economy might be willing, if not eager, to accept this cost.
Continued
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