Democrats, CEOs Outpace Bush On Health Reform

Posted May 21, 2003 at 1:39pm

As demonstrated by a remarkable press conference on Monday, it’s not just Democratic presidential candidates who are insisting that America’s health care crisis move to the top of the political agenda. [IMGCAP(1)]

The case was made by CEOs of Giant Food, the Kellogg Co., SBC Communications and Cinergy Corp., an energy giant, as well as the presidents of the Communications Workers of America and the California public employees’ retirement system.

The attendees didn’t just complain about the surging ranks of the uninsured. They called ballooning insurance costs “unsustainable.”

The press event, sponsored by the nonpartisan National Coalition on Health Care, demonstrated that the health issue needs to be attended to not only by Democrats, but the Bush administration, too.

Before she left Washington to return to Texas last year, colleagues say, former White House communications director Karen Hughes advised that Bush needed to “neutralize” the health care issue before the 2004 election the way he did the education issue in 2000.

Administration officials claim they’re staying even with Democrats by advocating a Medicare prescription drug benefit for seniors, although they admit that they could fall behind if a Republican-dominated government fails to enact a benefit into law this year or next.

But on the burgeoning issues of health costs, coverage and quality, some administration officials admit they are well behind the curve and need to “turbo-charge” Bush’s proposal to provide $99 billion worth of tax credits over 10 years to enable the uninsured to buy health insurance.

Among the Democratic candidates, Rep. Richard Gephardt (Mo.) got off the mark first, although his plan has been justifiably criticized as too expensive — at between $2 trillion and $3 trillion over 10 years — and lacking any cost-containment mechanism.

Former Vermont Gov. Howard Dean came in with a more affordable and politically feasible plan — at $700 billion — but it, too, is light on cost controls.

So far, Sen. John Kerry (Mass.) has the best combination of proposals on cost control, coverage for the uninsured and quality improvement, although Sen. Joe Lieberman (Conn.) promises to try to match him with a proposal this summer.

On Wednesday, Lieberman unveiled one pioneering proposal not on any other candidate’s agenda — an American Center for Cures, a new federal agency designed to cooperate with private companies to translate basic biomedical research into actual remedies for diseases.

Lieberman aides said his overall health proposal would resemble the one recommended in the 2000 campaign of Democratic candidate Al Gore, involving expansion of existing insurance programs to cover the uninsured.

That’s the fundamental basis of the Dean and Kerry proposals as well, and contrasts with such fundamental revisions of the health system as Gephardt’s mandate that all employers offer insurance, a mandate for all individuals to obtain insurance or a government-run single-payer system.

The National Coalition on Health Care, a consortium of corporations, unions, health providers, pension funds and church groups, prefers a “comprehensive” overhaul of the health system, but it has not yet said what form that should take.

As Simmons and the CEOs said, health costs are rising at a double-digit rate each year. “This year’s hike in average insurance premiums, 12.7 percent, is more than five times the increase in 1998 and more than double the increase back in 1993, when there was widespread agreement that the health care system was in crisis,” coalition president Simmons said in a prepared statement.

SBC CEO Bill Daley said that despite cost-cutting in every other area and a reduction of 25,000 employees over the past four years, his company’s health care costs have increased 50 percent in the past three years.

“We expect these costs to increase $1 billion, or another 50 percent, once again during the next three years,” he said, adding that “the present course we are following is unsustainable. Employers can’t continue to absorb double-digit increases in health care spending, year after year.”

Because of cost increases, Simmons said the number of uninsured persons would grow from an estimated 41 million in 2001 to between 51 million and 54 million by 2006.

One ranking administration health official told me that such estimates of the uninsured are too high, saying that the “chronically uninsured” number is 18 million to 24 million.

But he acknowledged that “we’ve got to spend serious money and we’ve got to control health costs.” Bush’s current $99 billion proposal would provide basic insurance coverage for about 6 million people.

This official estimated that a better plan might cost $150 billion overall and that cost savings might be achieved by phasing out the tax deductibility of “Cadillac” health plans offered by some corporations and cancelling subsidies currently given to health providers who treat the uninsured.

Such reductions will be condemned by Democrats, unions and health providers — which argue for Bush to start educating the public soon about his health ideas.

More importantly, though, he has to take the field seriously because Democrats are already occupying it — and corporate CEOs are demanding action.