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Health Care Gains Traction as Major Issue

Policy: For all the talk, any major initiative faces enormous obstacles in Congress. Drug benefits and HMO rules remain the big sticking points.

June 19, 2002|JANET HOOK and VICKI KEMPER | TIMES STAFF WRITERS

WASHINGTON -- Despite Washington's preoccupation with national security, leaders of both parties are preparing for the possibility that a different, kitchen-table issue will matter just as much to voters come election day: health care.

House Republicans began committee work Tuesday on legislation to provide a new prescription drug benefit for senior citizens, a move to neutralize an issue that Democratic candidates around the country have made central to this year's congressional election campaigns.

Also Tuesday, Sen. Edward M. Kennedy (D-Mass.) gave a speech designed to jump-start debate on health issues that have languished since Sept. 11. He laid out an agenda that ranged from targeted measures such as a bill to promote the prevention of strokes to a broad proposal to require large businesses to provide health insurance.

For all the talk, however, any major health initiative faces enormous obstacles in Congress. The parties are deeply split on how to help seniors cope with the rising cost of prescription drugs. They have been deadlocked for a year over legislation to impose new regulations on health maintenance organizations. Even legislation backed by President Bush to expand coverage of mental illness faces an uncertain future.

Even if no legislation emerges this year, the intense congressional maneuvering--especially over prescription drugs--could help shape the midterm congressional elections, which will determine which party will eventually be able to put its agenda into law.

Kennedy, in his speech, argued that health-care reform was "one of the great unresolved issues of our society," because the problems of the health-care system--rising costs, growing numbers of uninsured people and abuses by managed health-care plans--have gotten worse over the last decade.

"We must put patients first and launch a new era of health reform," said Kennedy, calling for a broad array of initiatives. Among them was one to expand an existing health insurance program for poor children. His proposal to expand employer-based health insurance would require all businesses with 100 or more employees to offer coverage.

The speech, in its wide scope, illustrated key differences between Democratic and Republican approaches to health-care policy and highlighted why health-care legislation is so hard to pass in a Congress so narrowly divided between the parties.

Democrats generally support comprehensive, government-financed programs and federally required benefits to reduce the number of Americans without health insurance and to improve health-care coverage.

"The state of a family's health should not be determined by the size of a family's wealth," Kennedy said.

Republicans, on the other hand, are inclined to support tax-based or private-sector initiatives and oppose government mandates that might add to employers' cost of providing health coverage.

"New mandates will cause health-care premiums to skyrocket and hamstring employers' ability to effectively manage their health plans," said Rep. Sam Johnson (R-Texas), chairman of a House subcommittee that on Tuesday began a series of hearings on rising health-care costs.

At first glance, a Medicare prescription drug benefit appeared to have everything necessary to sail through Congress: broad support from both parties, backing from the White House, growing demand from senior citizens--who also happen to be the age group most likely to vote--and, not least, a clear need.

Yet the Republican and Democratic proposals for a Medicare drug benefit could hardly be more different.

The Republican drug plan is less costly to taxpayers and less generous to seniors, and it relies on private insurance companies and pharmaceutical benefit managers to provide coverage and negotiate drug discounts. Under the Democratic plan, taxpayers would pay more and seniors would pay less for a government-provided benefit offered through the Medicare program. Drug discounts would be negotiated by the government.

Under the Republican plan, the typical Medicare beneficiary would pay a monthly premium of about $35, an annual deductible of $250, and then 20% of drug costs from $251 to $1,000, 50% of costs from $1,001 to $2,000, and 100% of drug costs to about $4,000. The GOP benefit offers 100% "catastrophic" coverage of costs beyond that amount.

Under the proposal offered by House Democrats, the monthly premium is $25, the annual deductible $100 and the co-pay 20% up to a maximum out-of-pocket cost of $2,000. The government would cover all drug costs over $2,000.

The difference of the plans' costs to taxpayers is even more dramatic. The price tag for the House GOP drug plan is $310 billion over 10 years, while programs proposed by Democrats would cost as much as $800 billion over the same period. President Bush had called for a $190-billion Medicare drug benefit.

Two House committees are expected to approve the Republican bill this week, and GOP leaders plan to bring it to a vote of the full House next week.

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