MARGARET WARNER: So how well does either candidate's plan deal with the spiraling cost of health insurance, and the growing ranks of Americans without insurance at all?
For that, we turn to Ron Pollack, the executive director of Families USA. His nonprofit advocacy group authored the study on rising health insurance premium costs cited in last night's debate; and Gail Wilensky, the administrator of Medicare under the first President Bush.
She is now a senior fellow at Project Hope, a foundation for international health education. Neither organization has endorsed a candidate in this campaign.
And welcome to you both. We're going to try put manageable boundaries on this huge issue. We're dealing with the non-Medicare side here. And I'd also like to try to break it into manageable bits. Let's start with the ranks of the uninsured and the Kerry plan. Ron Pollack, how well does the Kerry plan deal with, tackle the 45 million uninsured Americans?
RON POLLACK: I think it does a very good job. I have to say, there is one major departure and that is the emphasis that Sen. Kerry has put on this issue versus the president.
This is an issue that's really been treated with neglect over the last four years, and we've seen a huge increase in the number of uninsured.
Now, Sen. Kerry has a variety of approaches that are designed to expand coverage to the uninsured. First of all, what the senator wants to do is to make sure people have access to more coverage in the workplace, and he does that in a variety of ways to make it more affordable for small businesses, and ways we'll probably talk about later.
He also provides tax credits for small businesses. He also provides temporary assistance for those people who are between jobs. You know, somebody's between jobs, what happens is they're eligible for so-called COBRA coverage.
It's coverage that has a real catch to it, and that is you can still get the coverage of your previous employer, but you have got to pay the full freight. And less than one out of five people eligible for that coverage actually get it. So he would help subsidize that.
He also would achieve universal coverage for children by expanding the children's health insurance program. In total, he would cover about...
MARGARET WARNER: By taking it over.
RON POLLACK: About 27 million people who are uninsured today.
MARGARET WARNER: And he'd do that with the children by taking over Medicaid from the states?
RON POLLACK: He essentially does a trade with the states. He says to the states, we'll pick up all your costs for covering children in the Medicaid program.
Your end of the bargain is to provide more coverage through the children's health insurance program to children who are in families up to 300 percent of poverty, roughly $46,000 for a family of three.
MARGARET WARNER: All right. Now, give us your critique first of the Kerry plan.
President Bush and his campaign ads are saying this is big government-run health care with bureaucrats, not your doctors, will make the decision. Do you share that critique?
GAIL WILENSKY: Well, it is definitely a lot of government. Most people if they listen to Sen. Kerry would assume that most of the increase in the number of insured are going to come from people with private insurance; but the estimates are somewhere between 68 percent and another independent estimate - the Lewin Report that was raised last night -- said as many as 21 of the 25 million people are going to get their coverage on Medicaid and the children's health insurance program, which is another type of public program.
So this is, in fact, a huge expansion of the government's role in providing health insurance to many people who are not normally in the range that we think about government low-income support; twice the poverty line, three times the poverty line.
It's not really much of an expansion of employer-sponsored or private insurance; a very different model from what the president is talking about.
MARGARET WARNER: All right. Now, give us the president's model, and we'll do the same thing in reverse. How far... his would cover, what, seven million of the uninsured?
GAIL WILENSKY: The estimates are somewhere seven or eight million. And that clearly is a first step but will leave a lot more yet to do. The president's used the words "fundamentally different philosophy." I think that's actually a very good characterization.
What the president's plan proposes is to financially empower individuals, either do it by providing what are called refundable tax credits, that's money even if you're too poor to pay taxes, and access to group insurance, and for higher-income people, the ability to be able to use pre-tax dollars, like those of us who have employer-sponsored insurance, to be able to go out, set some money aside and get a high deductible premium.
MARGARET WARNER: These are the health savings accounts?
GAIL WILENSKY: These are the health savings accounts. That lets people buy the kinds of plans that make sense to them.
There are some provisions to try to make sure that there is some group insurance available so that you can get the benefits of low cost, but it's a very different philosophy, not the major expansion of public programs, empowering individuals, getting them in the action and letting them buy a health plan that makes sense for them.
MARGARET WARNER: All right. What's your critique of that?
RON POLLACK: Well, I think what the president would do would make a bad situation worse. One of the things the president didn't talk about, nor did Gail, is that the president has proposed creating a so-called block grant for Medicaid and the children's health insurance program.
And what that means is that it limits the amount of money the federal government will put into it and the amount of money that the states put into it, and as a result, a lot of people for whom Medicaid is a lifeline today will lose their coverage.
But let's go to the health savings accounts which the president talked about and Gail just talked about. I think it does harm to the health care system because a health savings account essentially is a high deductible policy. Now who's -
MARGARET WARNER: Meaning what?
RON POLLACK: It means that the first dollars in health coverage you pay out of your own pocket. If you have a high deductible, who does that appeal to?
Well, it appeals much more to the young, to the healthy, and with a tax benefit to the wealthy. On the other hand, you have got the sick and you've got the older people and those people who are in the middle class.
Now, when you take the wealthy and the healthy and the young and put 'em in one pool and you keep the older, sicker and poorer people in another pool, the premiums for that group that needs health care the most are going to skyrocket.
So that the people who need health care the most will find it least affordable.
MARGARET WARNER: And that leads me to the next topic, the affordability of these skyrocketing health insurance premiums.
Now, give us... I was going to ask you both who has the best plan, but I will start with you, Mr. Pollack, because Kerry has the more unusual idea here.
RON POLLACK: He does have a more unusual idea, and the president, of course, has a record, as Susan Dentzer indicated, premiums have gone up enormously, three times faster than wages.
But what this unusual plan that you're talking about is a thing called reinsurance. What does that mean? For a small business person, the reason health care costs are so expensive is that they worry that one or two of the people in their workforce are going to have a catastrophic illness, and if that happens, that's going to bankrupt that small business person. And so it has premiums going up and it's very unstable.
What Sen. Kerry would do is he would make sure that for anybody that has one of these catastrophic illnesses, once there was an expenditure of $50,000, then the federal government would pick up three-quarters of the remaining cost.
That does two things: First, it says to employers, your premiums are going to go down and it makes those premiums far more stable.
MARGARET WARNER: What's wrong with that plan? Do you think President Bush has a better one?
GAIL WILENSKY: Yes to that. Let me explain, first, interesting, the health savings accounts we talked about, they have been attractive actually to people who are not just the young and not just the high income, and including some of the sick.
So in our first year, they actually aren't working the way that Ron Pollack suggests and that other people have been concerned about. The importance of trying to get costs to moderate can't be overemphasized, but what the senator is talking about in the so-called reinsurance is shifting the expensive part of the health care over to the government. That's just a massive cost shift.
It's actually estimated to cost $600 or $700 billion. That doesn't do anything to moderate spending. What might be able to help is trying to get people involved in some of the decision making, at least the routine health care costs.
MARGARET WARNER: You're now saying it might reduce the cost for employers, but it might reduce those private premiums, but you're just shifting that cost to the federal government?
GAIL WILENSKY: Absolutely. There is nothing in that that in any way moderates spending on health care. What do you have to do to moderate spending?
Well, a lot of things, unfortunately: Worry about medical liability, worry about getting people to make good decisions, get information out there, get electronic records. It's not a simple problem. It's a lot, systemic was the word used last night.
That's a pretty good answer as to what has to change; systemically our health care system, if we're going to moderate spending.
MARGARET WARNER: Neither one of them have talked... first, let's just say briefly about the cost of each of their plans, and Mr. Pollack, if Sen. Kerry's covers four times as many people or brings four times as many people into the system, 25 or 27 versus say seven, but yet it seems to cost even more than four times as much than President Bush's, a lot more...
RON POLLACK: Margaret, the costs that we hear about only focus on what's happening on the federal side of the ledger. When people pay, they pay...
MARGARET WARNER: Give us some idea of the range we're talking about here, the difference.
RON POLLACK: Well, Emory University was saying that it was about $700 million over ten years -- $700 billion over ten years. But, we're only typically focusing on the federal side of the ledger. People wind up paying through a number of ways. And Sen. Kerry indicated that last night.
They pay for it by the cost they pay in premiums. They pay state taxes. Now, what Sen. Kerry does is he has the federal government provide fiscal relief to the states, and so people will be paying less tax dollars to the states.
He provides relief to businesses, which means that small businesses will be paying less money and the employees of those small businesses will be paying money. So to focus just on one side of the ledger, I think, actually is...
MARGARET WARNER: So essentially you're agreeing with Gail Wilensky that it's a cost shift, I mean, that he's having the federal taxpayers take on more in return for relieving both the states and employers?
RON POLLACK: In the respect that we just talked about, yes, however, there are other things that Sen. Kerry does.
For example, and it came up last night in the debate, he would allow a host of things that would enable us to get prices down.
For example, he agrees in allowing people to re-import drugs from Canada, which are much cheaper. He would allow government programs to bargain for cheaper prices.
These are things the president opposes because actually he supported the drug industry's position on that.
MARGARET WARNER: All right. But let's then... I was trying to stay away from the Medicare side because that's a whole other discussion. Let's talk about the president's other point about controlling the overall cost does have to do with lawsuits. Very briefly, what's the difference between the two men on lawsuits?
GAIL WILENSKY: The president has for a number of years tried to get legislation enacted that would cap or limit the awards, not the direct costs of having a problem resolved, but the pain and suffering or punitive damage awards.
What the senator has said is he doesn't want to go that direction. He hasn't supported it and he's, in fact, voted against that legislation; that he wants to try to have a way to make sure that so-called frivolous lawsuits don't occur, but that just means having someone who is in an area say, oh, this is legitimate.
Of course, we have those people. They're called expert witnesses. The notion that that will modify a liability just doesn't pass muster.
MARGARET WARNER: Brief retort from you - 30 seconds.
RON POLLACK: As a former law school dean, let me just say that this really is an effective way of dealing with lots of litigation. It's a panel of experts, not someone chosen by a lawyer. There are penalties to lawyers who bring frivolous lawsuits.
There is conflict management processes, mediation that Sen. Kerry would have us do. And he would place a cap on punitive damages.
What Sen. Kerry does is he says, he doesn't want these frivolous lawsuits in the system, but he doesn't want to hurt the people who really suffered because of malpractice.
MARGARET WARNER: All right. And we have to leave it there. Thank you both very much.
RON POLLACK: Thank you, Margaret.