THE RACE TO THE WHITE HOUSE
Kerry, Edwards Offer Different Prescriptions
As medical costs rise and access to insurance erodes, the debate on
healthcare moves to the center of candidates' domestic agendas.

LOS ANGELES TIMES
February 28, 2004
http://www.latimes.com/news/nationworld/nation/la-na-
health28feb28,1,3062069.story?coll=la-headlines-nation

By Ronald Brownstein, Times Staff Writer

More than 60 people had filled almost every seat in the waiting area
at the Clinica Monsenor Oscar A. Romero in Los Angeles' Pico-Union
district one rainy afternoon this week, but to Grace Floutsis the
room didn't look crowded at all.

"It's actually pretty roomy in there," said Floutsis, the clinic's
medical director, as she looked over the mostly Latino families
sitting quietly in neat rows of chairs. "Most days, it's standing-
room only."

The uninsured low-income families who fill the public clinic for 12
hours almost every day silently testify to the growing strain on the
nation's healthcare system as medical costs rise and access to
health insurance erodes.

These pressures have inspired this year's Democratic presidential
candidates to place healthcare at the center of their domestic
agendas — and to offer the most ambitious reform plans since
President Clinton's crusade for universal coverage crashed a decade
ago.

Sens. John F. Kerry of Massachusetts and John Edwards of North
Carolina have each proposed more sweeping plans than Al Gore in 2000
to expand coverage to the nearly 44 million Americans who lack
health insurance.

Kerry and Edwards seek to reach the uninsured primarily through the
same means: expanding the existing public programs for low-income
families without coverage.

Yet healthcare remains one of the most important distinctions
between the two major contenders for the nomination. Kerry has
offered a plan that is more ambitious, comprehensive and expensive
than Edwards'.

In one of his few policy challenges to Kerry, Edwards has argued
that the country can't afford his rival's plan. In turn, Kerry
insists Edwards' approach would do too little to reduce the ranks of
the uninsured or to restrain the rise in premiums for those who have
insurance.

California has as much at stake as any other state in this debate —
and the coming argument over healthcare between the eventual
Democratic nominee and President Bush. Many of the trends battering
the nation's healthcare system have reached a peak here.

The state's fiscal crisis prompted Democratic Gov. Gray Davis, and
now Republican Gov. Arnold Schwarzenegger, to seek cuts in the
public programs providing health insurance to the most needy
families. Rising healthcare costs were at the root of the lengthy
Southern California grocery strike tentatively settled this week.
And Census Bureau figures show that nearly one in five Californians
lacks health insurance — a ratio exceeded only in Texas and New
Mexico.

Healthcare is central to the agendas of all the Democratic
contenders.

Rep. Dennis J. Kucinich of Ohio and the Rev. Al Sharpton of New
York, the two long-shots in the contest, have embraced the long-term
liberal goal of a single-payer, government-run health care system
that would expand Medicare to cover all Americans. But that idea has
not entered the mainstream debate in Washington, partly because of
its enormous cost: about $600 billion annually.

The heart of Edwards' proposal is a new requirement that all parents
contribute to insurance for their children. Families whose children
are already covered through their employer would receive tax breaks
to help offset their existing premium costs.

Families whose children are not covered would receive a subsidy to
help them buy insurance, either from their employer or through the
Children's Health Insurance Program, a state-federal partnership
that provides care for children in working-poor families. The
subsidy would cover all the cost for the poorest families, but other
parents would have to contribute — from about $10 a month for lower-
middle class families to as much as $80 a month for those earning at
least $75,000 annually.

Edwards would enforce his mandate by establishing automatic
enrollment for lower-income children at birth or when they register
for school, and by requiring parents to show proof of insurance on
their tax returns. The IRS would bill those who couldn't demonstrate
insurance and enroll their children in a health care plan.

Through these measures, experts say Edwards would ensure coverage
for virtually all people through age 21. But to keep down the plan's
cost, Edwards offers relatively modest subsidies to help uninsured
low-income adults buy coverage or small businesses provide it.

The result is that Edwards' plan would cost the least and cover
fewer of the uninsured than Kerry's.

Kenneth E. Thorpe, a professor of health policy and management at
Emory University in Atlanta said Edwards' plan would cost about $590
billion over the next decade and provide coverage for nearly 22
million people — about half of the uninsured.

The heart of Kerry's proposal is a massive trade between state and
federal governments. He proposes that Washington assume all the cost
of providing health care for the roughly 20 million children who
receive coverage under Medicaid, the joint state-federal program for
the poorest families.

In return, states would agree to share with Washington the cost of
expanding coverage to all children in families earning up to three
times the poverty level (about $55,000 for a family of four) and all
parents earning up to twice the poverty level (about $37,000).
Eventually, he'd ask states to also contribute toward covering low-
income single adults without insurance.

Kerry sees several advantages to the swap. It would mean big savings
for states in the next few years: California would save nearly $1
billion annually, Thorpe calculated. Kerry also argues that it would
insulate from budget cuts the Medicaid program, which is a frequent
target for governors during tough times because its clients — the
poorest families — have little political support.

Most importantly, Kerry would require states to automatically enroll
all children eligible under Medicaid or CHIPs.

"Today, the states do a very haphazard sporadic enrollment of
children," he said in an interview. "They don't really reach out, so
the kids don't get covered."

Several California healthcare experts seconded Kerry's analysis, and
praised his proposal. "He's absolutely right," said Bruce G.
Bodaken, chairman and president of Blue Shield of California. "The
Medicaid programs are the most vulnerable when the states have a
budget crisis."

Also under Kerry's plan, Washington would assume from private
insurers much of the cost for the most expensive cases. Once a
patient generates $50,000 a year in bills, Washington would pay
three-quarters of any additional costs — as long as the insurer
passed the savings onto companies and workers.

Shifting these costs to the government would reduce premiums for
private health insurance plans by about 10% annually, Thorpe
calculated. Kerry argues that would not only ease the burden on
workers facing rising payments, but encourage more businesses to
insure their workers.

Finally, Kerry would go further than Edwards in subsidizing small
employers to insure their workers and helping individuals buy
insurance on their own. The result, by Thorpe's estimates, is that
Kerry's plan would cover about 5 million more adults than Edwards,
reaching nearly 27 million of the uninsured.

Because so many of California's uninsured are working adults,
Kerry's plan would meet the state's needs more directly than
Edwards', said E. Richard Brown, director of UCLA's Center for
Health Policy Research. Brown also thinks it's a better idea than
the tax credits President Bush has proposed to help those without
insurance purchase it.

Bush has urged tax credits of up to $3,000 a year for uninsured
families, and $1,000 for individuals — far below the cost of private
coverage in most markets. "The tax credits aren't really big enough
to help people buy the coverage … whereas the Kerry approach has
multiple ways it provides support to the adult working population,"
Brown said.

Yet because Kerry's approach is more comprehensive than Edwards'
plan, it is also more expensive. Thorpe estimated the Kerry plan's
10-year cost at $895 billion.

Edwards has seized on that higher price tag to argue that his plan
is more "affordable and doable" than Kerry's. From her ground-level
view on Alvarado Street, Floutsis said the question wasn't whether
the Democratic plans go too far, but whether they go far enough in
expanding coverage to communities like Pico-Union.

"If they can do something that will help us in our work, we'll take
it," she said, peeking into the examination rooms filled with
patients. "But we could build three of these clinics and still not
meet the demand in this neighborhood."