Presidential Campaign: Kerry vs Bush on Health Care

The President claims that many of the necessary health care reforms were accomplished when the Medicare prescription drug benefit was passed in 2003. That program will subsidize seniors’ drug purchases $400 million to $534 billion for 10 years. It also eased restrictions on Medical Savings Accounts (MSA)

Bush strongly favors MSAs, which allow people to put money aside in a tax-free account for future health care costs and pay for medical expenses directly. MSAs have been available since January 2004, but today they are taxed when they are purchased. Bush wants to eliminate the taxes and make premiums paid through the accounts tax-deductible. The accounts can serve as primary health coverage, or help people fill gaps in their employer-sponsored coverage.

Bush also proposes a tax credit to help uninsured Americans purchase private health insurance. Under the Bush plan, individuals earning $30,000 or less would get a $1,000 tax refund every year and be able to use this money to buy insurance. Families earning $60,000 or less would get $3,000 back in taxes and use this money for family coverage.

Critics claim the Bush proposal sets up a dangerous shortfall, providing low-income people and families only about a third of what it costs to buy coverage, which could force many of them to go without health care.

For uninsured children, President Bush supports sending approximately $3.2 billion in unused money back to the states to fund State Children's Health Insurance Programs (SCHIP). He also proposes expanding prescription drug coverage offered by Medicare and creating 1,200 new community health centers where uninsured people can get primary care.

Another difference between Bush and Kerry is tort reform. The Bush plan limits medical liability awards for non-economic damages to $250,000. Punitive damages also would be capped. Bush claims tort reform will save $60 billion in consumer health care spending annually and $28 billion in federal spending.

Senator Kerry’s health care proposal would subsidize employer and state programs to reduce the number of uninsured Americans. For example, Kerry would reimburse employer health plans for 75 percent of all costs above $50,000. Employers would have to offer insurance to all employees and guarantee that any savings would be used to offset the cost of employee premiums.

The Kerry plan would push states to expand Medicaid and the State Children's Health Insurance Program, with the federal government picking up the extra cost. Kerry also would let Americans join the Federal Employees Health Benefits Program, which is often less expensive than private care.

The Bush campaign criticizes the cost of the Kerry plan, but Kerry says he intends to pay for the plan in part by eliminating Bush-sponsored tax breaks for wealthy Americans with annual incomes over $200,000.

Kerry says that the Medicare prescription drug benefit, which the president touts as a core element of his plan, doesn’t do enough. While Kerry hasn’t said anything about repealing the benefit, instead he favors letting consumers buy price-controlled prescription drugs from Canada. Kerry also says he will use the government's buying power to force drug firms to offer lower prices for federal health plans and to require greater price transparency.

Unlike Bush, Kerry opposes tort reform that would lead to any type of cap on damages for medical malpractice, because he says that kind of proposal "denies justice."

As with any political issue, both the Bush and Kerry plans have strong critics and advocates. Even the experts can't agree. "They're both pretty complicated plans," says Robert Moffit, health policy analyst for the Heritage Foundation. "Both rely on a complex variety of tax credits and incentives."

Complicated or not, most experts see clear and simple differences between the two plans. "Kerry's proposal would substantially reduce the number of people who are uninsured, cover all children, boost employer-sponsored coverage, and correct some of the real problems in Medicaid and SCHIPs," says Ronald F. Pollack, executive director of the Washington-based advocacy group Families USA. "Bush's plan, on the other hand, is insurance that doesn't really insure."

Devon Herrick, a senior policy analyst at the Dallas-based National Center for Policy Analysis, disagrees. He argues that Bush's plan gives individuals more control over their health care while keeping costs under control.

"If you're buying an MSA or using a tax credit to purchase private insurance, you'll be able to shop around and get the best deals for your needs," Herrick says. "Instead of having a plan that your employer chooses for you, you can buy and benefit from a plan specifically geared to you."

CATO health policy expert Michael Cannon thinks Bush's plan is marginally better than Kerry's. He likes the MSA expansion, but he believes tax credits aren't needed and tort reform should be left up to states. "The Bush plan has one good idea, one bad idea and one unnecessary idea," he says.

The final word will come from the voters in November, when they cast their ballots for either George W. Bush or John Kerry. Meanwhile, it pays to learn as much as you can about both candidates’ positions and proposals between now and Election Day.