Striking contrasts in reforming healthcare
Kerry and Bush differ dramatically on how best to improve a system in crisis

Differences between John Kerry and George W. Bush are easy to find, but if you want an especially dramatic one, look no further than healthcare. In a nutshell, Kerry proposes to expand health insurance to cover virtually every child in America, help employers out by subsidizing the cost of “catastrophic” healthcare costs and generally support the employer-based system of providing insurance. By contrast, the Bush administration’s initiatives consist of tax breaks aimed at destroying employer-based plans by shifting the cost and risk to individuals. What’s more, the president is running on the questionable merits of a Medicare prescription drug plan that includes gaps big enough to drive an ambulance through.

At a time when more and more Americans lack any health insurance—44 million at last count, including9 million children—AFT members covered under collective bargaining agreements enjoy some of the best coverage anywhere. However, health insurance has become the defining issue in almost every contract negotiation. Members are paying more out of pocket for the same—and sometimes less—coverage, and skyrocketing premiums are squeezing out funds that might have gone toward pay raises, as well as countless resources that could help students.

PSRPs are probably hardest hit among the AFT’s constituencies by rising insurance costs. Some school districts and colleges already play nasty games in which they limit employees to just under the number of hours needed to quality for benefits. And even when some part-time PSRPs do qualify, they earn so little that they are literally working for health insurance. The premiums eat up every cent of their paycheck, and sometimes more.

Federal health insurance reform is unquestionably an expensive item, but a good group insurance plan is always going to cost less than treating people without insurance who show up at the emergency room as a last resort. Sen. Kerry has estimated the cost of his various proposals—which would take the country a big step toward universal coverage, as well as improved quality—at $653 billion. He would pay for the initiative by rolling back the Bush administration’s tax cuts for the wealthiest Americans: those earning more than $200,000 a year.

Not only does the president not have a meaningful initiative to cover the millions of uninsured Americans, but he also wants to further expand the tax cuts that have produced record deficits since he took office. Despite the deficits, he wants to set aside an additional $990 billion—you read that right, almost $1 trillion—to expand and make his tax cuts permanent.

Kerry’s wide-ranging plan

Kerry’s plan includes a number of elements, among them:

• a plan to reimburse employer health plans for 75 percent of individual catastrophic costs over $50,000, as long as the employers use those savings to reduce workers’ premiums;
• efforts to make prescriptions more affordable by, among other things, letting the government negotiate substantial discounts (the Bush Medicare “reform,” incidentally, explicitly prohibits the federal government from negotiating with drug companies to reduce prescription costs);
• insuring every child by having the federal government pay the cost of 20 million children enrolled in Medicaid, if states expand their coverage of kids through the Children’s Health Insurance Program; and
• allowing Americans to buy into the Federal Employees Health Plan, which offers a wide range of affordable health plans at group rates.

So what does the Bush administration’s highly touted, but little understood, Medicare prescription drug plan offer? Besides the mind-boggling ban on negotiating lower drug costs, the law will likely seriously undercut retiree health coverage as employers drop coverage and move retirees into the new plan. (Recent estimates from the U.S. Department of Health and Human Services indicate that employers will reduce or drop benefits for 3.8 million retirees after the coverage kicks in.) What’s more, the drug “benefit” will cost most seniors much more, and it offers no coverage at all for prescription expenses between $2,251 and $5,100. In a shrewd move (some might call it cynical), the administration and its allies in Congress passed through a law that doesn’t even go into effect until 2006, so seniors won’t experience the shortcomings until long after this year’s elections.

As for increasing the number of uninsured citizens, the president’s approach relies on the tax code through credits for the uninsured, medical savings accounts and health reimbursement accounts. All of these work against the idea of lower rates through group coverage and undercut the current employer-based system.