Rivals' Health Plans Ailing, Experts Say

Rivals' Health Plans Ailing, Experts Say

PROPOSALS: Bush and Kerry are faulted for their responses to rising costs and the uninsured.
Friday, October 15, 2004

By DOUGLAS E. BEEMAN and DOUGLAS QUAN / The Press-Enterprise

Southern California health-policy experts say neither President Bush nor Sen. John Kerry has offered a plan that will solve the nation's problems with rising medical-care costs and growing numbers of people without health insurance.

"I don't think that either plan is going to go far enough in solving the problems," said Dr. Keith Richman, a Republican assemblyman from Granada Hills who has been active in bipartisan efforts to save California's crumbling health system.

Other policy experts concur, noting that soaring medical costs, if left unchecked, will leave more people without health coverage and further burden an already strained health system.

Glenn Melnick, who teaches health policy at the University of Southern California, said Bush's plan will make health insurance more affordable for higher-income people, but do little to reduce the number of uninsured. Kerry's plan will cover more people, but won't solve the uninsured problem or control soaring medical costs.

Richman, a physician, said a comprehensive solution is needed to control rising medical costs while expanding health coverage to the nearly 6.4 million Californians who lack insurance.

The Uninsured

About 45 million Americans lack health insurance, and experts fear that number may grow as health costs rise and employers - and employees - opt to drop their health insurance because they cannot afford it.

Bush and Kerry are touting different approaches to containing health costs and expanding coverage for those without insurance.

Bush's solution relies largely on tax credits and private markets. He supports health savings accounts, malpractice liability reform and a campaign to get more children to enroll in existing government-funded insurance programs.

Kerry would use the federal government as a facilitator, allowing individuals and businesses to buy health insurance through the existing federal employee benefit program, offering tax credits for the uninsured and having the federal government cover catastrophic health-insurance costs.

Rising medical costs have been a vexing problem for Infotech Software Solutions, a Riverside-based information-technology and engineering-design services firm with just under 100 employees across the United States.

The company covers the entire cost of its employees health insurance, said Rajan Kasetty, the company's president. But over the last four years, that cost has doubled - something Kasetty did not anticipate.

'We Feel the Pinch'

As a result, Kasetty said he has not been able to raise salaries or add benefits.

"We feel the pinch," Kasetty said.

Kasetty said he's seen neither candidate put forward a clear plan for how to reduce health costs.

Elsewhere, people had mixed feelings about the candidates' health-care proposals.

George Asberry, 68, of Riverside, gets full health coverage as a retired Air Force veteran. However, as a technologist in a medical laboratory, Asberry said he knows many others aren't so lucky.

"The cost of health care has skyrocketed. People can't afford to pay."

He said he believes Kerry's plan provides a greater breadth of coverage than Bush's plan because it helps uninsured children.

Asberry said he also likes the equality in Kerry's proposal to allow people to buy coverage through a plan that is similar to what is offered to members of Congress.

Like all federal employees, members of Congress can choose from an array of health plans. The federal government pays on average about 71 percent of the premium. Employees pay the rest, said Abby Block, a deputy associate director at the federal Office of Personnel Management.

A federal employee in Southern California, for example, could choose from among 19 health plans, including HMOs, PPOs and health savings accounts, she said. Block did not comment on either candidate's health proposals.

Sylvia Avila, 65, of Murrieta, said she favors Kerry's approach over Bush's.

"We're a really rich country and there's no reason we should not have a good health-care plan for everyone," she said.

Avila, who has diabetes, recently qualified for Medicare, plus she has additional coverage through her husband's insurance plan. Together, they cover a large portion of the more than $2,000 she must spend quarterly to control her disease.

Choices Called Difficult

But Avila has a friend with medical problems and no insurance who is putting off a needed diagnostic test until she is old enough to be covered under Medicare.

"They have to make choices that are really difficult," she said of her friend.

Andre Rustad, 51, of Rancho Cucamonga, said he thinks Kerry's plan would take the country down a dangerous path.

"I don't agree with the socialization of Medicare. It hasn't proven to work in Europe or Canada," he said.

Rustad said one way to lower health-care costs is tort reform to prevent frivolous malpractice lawsuits, which drive up insurance costs.

Both Bush and Kerry have proposed reforming medical malpractice liability. Bush argues that such reform, including caps on malpractice awards, will help control costs by cutting litigation expenses and reducing additional tests and procedures designed mainly to protect doctors from lawsuits.

Tort Reform

Dr. Ronald Bangasser, a Redlands family practice physician and former president of the California Medical Association, supports Bush's tort-reform proposals. Although California has one of the toughest medical malpractice caps in the nation, malpractice insurance premiums continue to rise at Beaver Medical Group, where he practices.

But malpractice reform alone won't contain costs or expand insurance coverage to those who currently have no insurance, Bangasser said.

Tax changes, insurance vouchers for low-income people and better mechanisms that allow small businesses to share insurance risk also are needed, he said.

Neither candidate has proposed a comprehensive solution, Bangasser says.

Most states already have reformed medical malpractice laws, said Melnick, the USC professor, so any national reform will have little impact on costs. But aging baby boomers are demanding more medical services and medical technology is driving up health expenditures.

"All those powerful things are pushing expenses up, not down. And I don't see any of those forces moderating," Melnick said. If costs aren't controlled, more people will lose health insurance. There are, he said, "no easy answers."

Reach Douglas E. Beeman at (951) 368-9549 or dbeeman@pe.com