As the debate over the nation’s health system rages on, the number of uninsured Americans continues to grow–to more than 44 million, including 11 million children. This, the second of an occasional series looking at the presidential candidates’ economic proposals as the election approaches, examines the plans of Al Gore and George W. Bush to reduce the number of uninsured and help patients pay for skyrocketing medical costs.
After Peter Overholt lost his medical coverage, he and his wife, Tish, mortgaged their North Shore home twice and tallied up personal loans in the six figures paying for medical care for their two young children.
Leticia Herrera, today the president of Chicago industrial maintenance firm ECI, went for three years without insurance for herself as she built her business. Today she has more than 30 employees and pays out more than 3 percent of sales on health insurance premiums for them. Still, she remembers the years when she was without coverage and the day her father told her he would sell his own home if disaster struck and she needed money.
Chris Nelson quit her job as a nurse 12 years ago to care for a young patient with cerebral palsy who had been abused in a former foster home. The boy, Stephen, now 14, has complicating medical problems that require continuing care. They live in Naperville on about $1,400 a month that comes from Social Security, foster care and child support payments from Nelson’s former husband, in addition to a small lump sum Nelson inherited from her father’s estate. Although grateful to the government for the assistance programs that cover the majority of Stephen’s care, Nelson dreams of a universal health-care system where she could see only the best doctors, and one that is less complicated to use.
“Stories like these show why Americans feel so vulnerable to the health-care system,” said Frank McArdle, a principal in the Washington, D.C., research practice at Lincolnshire-based benefits consulting firm Hewitt Associates. “It can really devastate a family.”
Stories like these are also why Bush and Gore have been trumpeting their proposals for fixing the nation’s health-care problems. Lately the candidates have been slugging it out over their respective plans to add a prescription-drug benefit for senior citizens.
The Gore plan is a costly package that covers virtually all Medicare patients who currently have no drug coverage, while the more austere Bush plan would give some benefits immediately to poor seniors but would cover far fewer people, analysts said.
Recently announcing a $158 billion prescription-drug plan for seniors, Bush called Medicare “too vital to be neglected.” He outlined a $48 billion interim plan that would cover prescription-drug costs for seniors earning up to $11,300. The money would go to the states by 2001. Over 10 years, he would spend $110 billion more to guarantee senior coverage under Medicare and a prescription-drug package that would pay 25 percent of premium costs for drug coverage for people earning 175 percent of the poverty level. Bush would place a $6,000 cap on out-of-pocket drug spending.
His plan would offer an alternative to what many constituents view as a bureaucratic, big-government Medicare by offering patients a choice among private health insurers for the drug coverage, although it’s uncertain how willing private insurers are to take that on.
Gore has proposed spending an estimated $253 billion over 10 years to add a prescription-drug benefit to Medicare. It would pay half of prescription drugs up to $5,000 and carries a provision for catastrophic expenses beyond $4,000 in out-of-pocket costs per year. It also covers premiums and co-payments for people who make less than $11,000 a year.
The Gore $4,000 cap on catastrophic costs would cover 2.8 million people, while the Bush plan would cover up to 600,000, according to an analysis expected to be released Monday by Emory University health-care expert Kenneth E. Thorpe.
“The Bush plan is less expensive because there are fewer people eligible, because Medicare would cover a lower share of the premiums and it has less catastrophic protection,” Thorpe said. He also believes the Bush system would add a layer of bureaucracy, not remove one, because private insurers would be reporting into a central Medicare clearinghouse how near each senior was to reaching the spending cap.
Critics charge that the Gore health-care plan is too expensive and not appropriately targeted to the most in need. If the expected budget surplus doesn’t materialize, they argue, everybody gets left in the cold.
“The bulk of [Gore’s] prescription-drug benefit goes to the 60 percent of seniors who spend less than 1 percent of their disposable income on prescription drugs,” argues Robert Goldberg, PhD, senior fellow at the National Center for Policy Analysis, a Dallas-based organization. “The Bush proposal is targeted to people who need it most.”
Gore, meanwhile, supports the House-passed patient bill of rights that allows patients to sue their health plans for denial of coverage and other issues, while Bush supports patient protections but limits employer liability.
Bush would supply tax credits for families buying health insurance, while Gore would give tax credits to families that sign up for the federal Children’s Health Insurance Program, a federal subsidy begun under the Clinton administration in 1997. Gore would expand the program to families earning up to 250 percent of the poverty level, or about $41,000 for a family of four, adding about 1 million uninsured families to the program, his campaign estimates.
Above that level, Gore is promising that families with higher incomes but without insurance can buy into CHIP, paying the full premium, which he says will be lower than commercially available insurance. Those families can also get a 25 percent tax credit on the premiums.
Gore supports the House-passed patient bill of rights that allows patients to sue their health plans for denial of coverage and other issues, while Bush supports patient protections but limits employer liability.
Analyzing how the two plans measure up for a hypothetical family of four, Emory’s Thorpe again gave the nod to the Gore plan.
“A family earning $30,000 would essentially get free health care under the Gore plan,” Thorpe said, citing the candidate’s plan to expand the Children’s Health Insurance Program to the parents of kids covered under the federal subsidy program.
Comparatively, he said, such a family would qualify for $2,000 in tax credits under the Bush plan. Coverage above that level would come out of the family’s pocket.
Hitting home
How would everyday folks be affected?
The Overholts, for example, would have been able to buy into the CHIP program as expanded by Gore and receive coverage, rather than depleting their assets. Also, they would be eligible for a 25 percent tax credit to offset the premium cost because Peter, as a futures trader, would be covered as an independent under another provision in the Gore plan, McArdle said.
Under the Bush proposal, tax credits phase out as income rises above $60,000.
For a time during their ordeal, the Overholts were told they would have to pare all their financial holdings and apply for Medicaid.
Five years ago, Tish Overholt was just coming off another five-day stint with her daughter in the pediatric intensive care unit at Children’s Memorial Hospital when she got a call from the Chicago facility that her medical insurance was gone.
In disbelief, the Overholts immediately began making telephone calls in the hope the situation was just an administrative mistake. It wasn’t.
Peter’s career at the Chicago Mercantile Exchange paid handsomely, enough that the couple live in a posh North Shore suburb. But as an independent cattle futures trader, Peter wasn’t part of a large company health plan. Instead, he had banded together with other local traders and purchased a small group policy. When the size of that group dwindled, the policy was dissolved.
The Overholts were quickly able to buy private insurance for themselves, but pre-existing conditions with both their children prevented them from buying a family policy. Their daughter, Maggie, was born with her trachea and esophagus fused, a condition known as tracheoesophageal fistula. Today, the 9-year-old still has a tracheostomy, or an artificial opening in her throat to help her breathe. Their son, Maxwell, now 10, is a high-functioning autistic child who has required, at times, 30 hours a week in professional behavioral programs.
With the help of a persistent clerk at Children’s Memorial, the Overholts found a state waiver program that now pays for Maggie’s in-home care and the couple have slowly worked their way out of debt.
But expanded children’s insurance coverage remains a critical issue to Tish Overholt.
“This country’s health-care system is a disgrace,” she said. “It’s embarrassing. Every child should have insurance.”
Those most in need
Chris Nelson, the former nurse caring for Stephen, longs for a system in which benefits are determined by need, not the richness of a private insurance policy.
In that sense, the more populist-sounding Gore plan gets the nod with Nelson, though even he isn’t advocating a universal system that Nelson envisions. And because she already receives substantial government subsidies, the widening of benefit programs doesn’t affect her situation.
Still, notes Thorpe, the Gore plan to bring parents into the same CHIP program as their children should help alleviate some of the confusion among the plans and boost participation rates.
Nelson wrote a book last year chronicling her experience with the U.S. medical system, called “Eagle Doctor: Stories of Stephen, My Child with Special Needs.” Her book and subsequent talks about her story sparked the attention of policymakers in Washington, where she recently traveled to talk with congressional health-care legislators about the Family Opportunity Act of 2000, a bill that would expand health-services access to families with disabled children.
Though she knows neither candidate is promising a miraculous overhaul of the U.S. health system, she hopes to raise awareness about the complicated, exhausting nature of the health system in America.
“If we tell our stories, other people will eventually listen. I feel like the most privileged person on Earth to be able to have Stephen home with me, but I know the system so well now, and not everybody does.”
Entrepreneur sees relief
Herrera, the business owner, likes Gore’s plan to give a 25 percent tax credit for premium costs of employees in small businesses that join coalitions to purchase health insurance.
Bush advocates the formation of health buying cooperatives, where groups such as trade associations purchase insurance in blocks on behalf of many small firms.
“I’ll take the tax credit,” said Herrera, who once experimented with a plan through an association but was disappointed with the quality of care.
Both plans fall short of solving the problems of out-of-control costs and decreasing quality and coverage, said Henry Simmons, president of the National Coalition on Health Care, an association of 90 groups including organized labor, corporations and physicians.
“The fact both parties want to enact a patient bill of rights is not going to fundamentally affect the underlying causes” of a declining system, Simmons said. “Covering children is a useful first step, but if we haven’t figured out a way to improve quality, it won’t work in the long haul.
Issues scorecard
What George W. Bush and Al Gore propose regarding health-care issues:
CHILDREN
BUSH
Provide more flexibility to innovate and expand coverage of the uninsured under CHIP. Implies states would have ability–and financial responsibility–to expand eligibility for CHIP beyond current levels.
GORE
– Expand federal Children’s Health Insurance Program to include kids in families with up_to $41,750 in annual income. Wealthier families can buy in to CHIP or Medicaid.
ADULTS
BUSH
– Provide refundable tax credit for low-income health insurance buyers if ineligible for other programs like Medicaid and CHIP. Expands and reforms Medical Savings Accounts, making them permanent and removing the 750,000 cap on the number of accounts. Allows all employers to offer such plans and lowers the minimum deductible to $1,000 from $2,000. Allows formation of small-business buying groups.
GORE
– Expand CHIP coverage to uninsured parents whose children are eligible for Medicaid or CHIP. Disabled individuals could keep Medicare and Medicaid coverage when they return to work by buying into these programs. Proposes purchasing groups for small businesses.
TAX BREAKS
BUSH
Provide refundable tax credit up to $1,000 for individuals and $2,000 for families to cover up to 90 percent of the cost of health insurance. Tax credit decreases as individual income rises above $15,000 and family income goes above $30,000. Two long-term care tax breaks: one for premiums and a deduction for the caregiver.
GORE
– Provide 25 percent tax credit to individuals and families without employer-sponsored coverage who buy private insurance or buy into CHIP; to individuals who buy into Medicare; and to small businesses that form purchasing coalitions.
MEDICARE
BUSH
– Establish bipartisan task force to prepare Medicare reform plan, including coverage of prescription drugs. Proposes $40 billion package to increase payment rates to doctors, hospitals and health-care providers that were cut in 1997 balanced budget act. Immediate Helping Hand interim program would provide drug benefit to low-income seniors and those with catastrophic drug costs over $6,000.
GORE
– Provide 25 percent tax credit for individuals 55-65 with employer-based coverage who buy into Medicare. Would pay for half of drug expenses, and for all catastrophic drug costs over $4,000 per year.
Source: Hewitt Associates
