Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/021792/02171010.000

Text File | 1992-10-19 | 8KB | 166 lines

                    
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                                                        ╚NATION, Page 20

SOCIAL POLICY

Rx: Band-Aids To Patch Up Health Care


The President and his Democratic rivals unfurl plans for curing
the crisis. But all of them have drawbacks, and none is likely
to be adopted in the fury of an election year.

By DAVID ELLIS -- Reported by Dan Goodgame and Nancy Traver/
Washington and David Seideman/New York


    The idea that every American should have access to
affordable health care has been gathering political force since
Democrat Harris Wofford used it to trounce former Attorney
General Dick Thornburgh in the Pennsylvania Senate race last
fall. Here, Democrats believed, was a domestic issue they could
use to help drive George Bush from the White House -- and
Republicans feared they were right. And so last week the
President, unnerved by declining approval ratings and a tepid
response to the hodgepodge of tax cuts he proposed in his State
of the Union address, unveiled his own prescription for
reforming the health-care system.

    Bush's plan is designed to make it easier for the 36
million Americans who currently lack medical insurance to obtain
it, while leaving the basic structure of the health-care system
intact. Working families who earn less than $14,300 annually
would receive vouchers worth as much as $3,750 to pay
health-insurance premiums. Middle-class families with earnings
of up to $80,000 a year could deduct premiums of as much as
$3,750 from their federal tax returns. To cut the cost of
policies, Bush urges small businesses to band together in
"health-insurance networks" that could bargain for lower rates.

    Health insurers -- who would gain millions of new
customers under Bush's plan -- hailed the proposal. The
President was praised for addressing one of the major flaws in
the existing insurance system: denial of company-sponsored
coverage to new employees if they suffer from "pre-existing"
ailments. With Bush's plan, companies could no longer legally
turn down applicants no matter what their health status, but the
cost of private coverage would still be prohibitive.

    But Bush's reform plan has huge drawbacks. One is that his
$3,750 tax credit and deduction will not cover the $5,600 price
of insurance premiums for an average family. Another is that it
will do little to curb the skyrocketing costs of medical care,
on which the U.S. spent $800 billion last year and which are
rising at a rate much higher than that of inflation.

    Moreover, Bush did not spell out precisely how to pay the
$100 billion, five-year cost of his program, saying, "We'll
figure that out." He sent Congress a 38-page list of financing
options, none involving higher taxes.

    Some of the money would come from restrictions on federal
payments for Medicaid, the program that serves 27 million
Americans, including half of all nursing-home patients. The plan
would also hike Medicare premiums for the wealthy, an idea that
is certain to provoke protests. In 1988, the last time Congress
attempted to make upper-income retirees pay more, a revolt
among seniors forced repeal of the catastrophic-care law the
following year. Fear of a similar backlash led Bush advisers to
drop the idea of reducing tax deductions for company-paid health
insurance, a subsidy expected to cost $43 billion this year.
Administrators of teaching hospitals, often the care providers
of last resort for the poor, are poised to battle Medicaid cuts.
They note that even now they do not receive enough money to meet
the task.

    The feverish partisan atmosphere of an election year
almost guarantees that neither Bush's prescription nor any other
competing scheme will be enacted before November. At least 30
different health-care bills are under consideration on Capitol
Hill, and every presidential candidate has brandished his own
proposal. Most of the ideas fall into three broad categories:


    UNIVERSAL CARE. Under this system, the government would
draw up a portfolio of minimum care for all Americans. Private
companies would continue to offer coverage to workers under
employer-paid plans and could devise policies to defray the
costs of risky or experimental procedures. A more advanced form
of universal care is the "single-payer" system, in which the
government would completely replace private insurers and
regulate physician fees. Such a system exists in Canada, and
Nebraska Senator Bob Kerrey has made a modified universal plan
the centerpiece of his presidential campaign.

    Universal care has little chance of being adopted. The
plan is under assault by the insurance industry, and
Republicans find the concept an unacceptable intrusion into the
free-enterprise system.


    PLAY OR PAY. The idea with the most support from
Democratic leaders, it would require businesses with 25 or more
employees to provide worker coverage or pay a 7% payroll tax for
the uninsured. To hold down spending on common medical
procedures, a federal board would monitor fees and streamline
the claim process.

    The nation's first comprehensive play-or-pay program was
enacted by Michael Dukakis when he was Governor of Massachusetts
to provide a shield for 400,000 uninsured state residents.
Under the Dukakis program, companies were compelled to
contribute to a state fund for each uninsured worker. But the
plan soon ran into resistance from business leaders, who said
the levy was cutting into profits. Current Massachusetts
Governor William Weld has promised to repeal the program.

    The Administration opposes play or pay. Health and Human
Services Secretary Louis Sullivan claims that many employers
would opt to pay the tax rather than foot the bill for private
care. If the bill passes, Bush will veto it and attack the
legislation. The message, a senior White House adviser says,
will be "the Democrats are for socialized medicine, and we're
not."


    MANAGED CARE. This approach is designed to maximize the
clout of consumers by encouraging them to organize into groups
to negotiate with health providers and insurers. Employers,
providers of group insurance, and agencies representing the poor
and unemployed would aggressively lobby for lower-cost coverage.
The downside: plan members would have a limited choice of
doctors and face restrictions on the use of specialists.

    The idea has been partly embraced by Democratic candidate
Paul Tsongas and practiced by financially strapped local
governments. Dick Phalen, president of the Cook County, Ill.,
board of commissioners, used managed care to reduce the cost of
care for his 25,000 public employees and their dependents. Using
the strength found in numbers, Phalen was able to obtain private
coverage at a cost of just $2,100 for an employee with no
dependents. "We're protecting our employees against the world's
vagaries at a savings," says Phalen, who may open the program
to all Cook County residents.

    In time the health-care-cost explosion could be stemmed by
a modified version of managed care, which is already being
practiced by many health-maintenance organizations. It could be
funded by a modest increase in taxes to provide coverage for the
uninsured, though the Bush Administration would resist it.

    Providing comprehensive care, cutting red tape and getting
more bang for the medical buck are easy ideas for politicians
to embrace. The question is whether they can deal honestly with
these issues in an election year. If the pressure of debate
shoots down some gimmicks and forces a candid discussion of the
nation's health-care priorities, America might get the reform it
desperately needs, perhaps as early as next year.