Health Care Changes, But Details Elusive
It's not easy
figuring out exactly what voters want when it comes to
A Gallup poll
released early this fall offered a dozen separate ways to
expand health insurance coverage. Each suggestion garnered
majority support, including tax breaks for small
businesses, 94%; requiring large companies to offer
health coverage or pay into a pool, 81%; and federal
subsidies for the poor, 76%.
was clear: The public wants change.
But two weeks ago
Gallup released another poll. That poll showed most
Americans are satisfied with their health coverage and with
how much they pay for health care.
So what gives?
demonstrate the long-standing conflict that has dogged every
proposed overhaul of the health care system dating back to
Harry Truman. Americans support the principle of
extending coverage to millions of people, but only so
long as they are not negatively affected by the
potential trade-offs, namely higher costs or reduced access.
And that's the
dilemma for the presidential candidates.
insurance to the 47 million uninsured is projected to
cost more than $100 billion annually. The candidates have to
find a way to pay for that expense. But it could be a
political death knell to suggest that the average
voter pay for it.
presidential candidates have found one way to finesse it.
senator John Edwards would raise taxes for those households
with incomes exceeding $200,000 a year. Senators Hillary
Clinton and Barack Obama would raise taxes for
households with incomes exceeding $250,000 a year.
household income in the United States is $48,200, so the
vast majority of voters would be spared.
''If you're in
politics, you can't go $1 below $200,000 on the income
tax, or you really start losing people,'' said Robert
Blendon, professor of health policy and political
analysis at Harvard University.
Sara Collins, an
economist at the Commonwealth Fund, which conducts
health research, said that bypassing the middle class paying
for expanded coverage makes economic sense. U.S.
residents already spend more on health care than
residents of any other country. If candidates mandate
that people buy insurance, many middle-income families will
need tax subsidies, not tax increases, to buy that
wouldn't want to do is overburden families already squeezed
by health care costs,'' Collins said.
candidates don't just ask the wealthy to pay for expanding
coverage. They also calculate that widespread adoption of
electronic health records will help pay for it. For
example, they cite a study by the RAND Corporation, a
think tank, claiming that electronic health records
could save $77 billion a year.
But many health
analysts don't buy it.
are going to save money that way. The Democrats are
going to save money that way. But I don't see any evidence
from the literature that's going to happen,'' said
Michael Tanner, director of health and welfare studies
at the Cato Institute, a liberterian think tank.
If those savings
don't occur, the ramifications are simple, Tanner said.
The candidates will have to find other sources of revenue
for their proposals.
''To do more
health care is going to cost more money,'' said Tanner.
But that's not
something that typical voters are thinking about right
now, he said.
''Right now it's
giving away free ice cream, and I'm not surprised the
public loves it,'' Tanner said. ''Nobody's told them about
the spinach yet.''
candidates have been hesitant to spell out another potential
trade-off. Both Clinton and Obama have called for employers
to pay for some of their workers' health insurance or
pay a certain percentage of the company's payroll into
a fund. But nowhere do they spell out that percentage.
important omission. The additional costs could force some
employers to lay off workers, which won't sit well with
voters. Edwards said the rate paid into the pool would
be 6% of payroll.
Back in 2003, a
team from the Harvard University School of Public Health
polled Massachusetts adults on several health care
principles. Seventy-six percent supported the concept
of employer mandates.
But what if they
heard the mandate was so expensive that employers would
be forced to fire workers? Support in the Massachusetts poll
dropped to 35%.
Republican candidates generally rely on tax breaks to make
insurance more affordable. All of the Republican candidates
reject the idea of employer and individual mandates --
even Mitt Romney, who was governor of Massachusetts
when that state approved a health plan requiring
people to buy health insurance.
The concept of
tax breaks also sounds good to the voter. Blendon notes
that 70% of Massachusetts adults surveyed said they would
support tax breaks to help the uninsured buy coverage.
But what if they heard that the tax breaks would not
be enough to cover the cost of a private plan? Support
dropped to 36 percent.
Republican senator John McCain calls for an individual
refundable tax credit of $2,500 for individuals and
$5,000 for families with insurance coverage. With a
tax credit, the amount of taxes owed is reduced by $1
for every $1 in credits.
proposes an income tax deduction of up to $7,500 for
individuals and $15,000 for families who purchase insurance
in the individual market. Romney, the former
government of Massachusetts, supports letting
taxpayers deduct the cost of their health insurance and
out-of-pocket medical expenses.
With a deduction,
taxable income is reduced. For example, a $15,000
deduction drops someone's taxable income from $60,000 to
executive director of the advocacy group, Families USA, said
tax breaks would help if structured properly, but he
believes all of the Republican candidates fall short
in helping those who need it the most.
''Somebody in a
15% tax bracket or who has no tax liability gets no
benefit from a deduction. Somebody in a 30% tax bracket is
going to get much more relief,'' he said. ''I think
tax deductions are a bad thing to do. They're wasteful
and spend money in the most cost-ineffective way.''
Pollack said a
tax credit is more likely to help the poor, particularly
if it's refundable and if they get it when they pay their
premiums. Also, it has to be large enough. If a tax
credit is for $4,000, that pays for only about a third
of the typical family insurance policy, he said. A
refundable credit is one in which the taxpayer gets a
certain amount regardless of the amount of taxes they
owe -- effectively giving them a check from the
government if the credit exceeds their tax liability.
another potential trade-off with the tax proposals is that
they encourage people to buy their coverage through the
individual market. That coverage is much different
than the group coverage offered through an employer.
Individual health insurance companies are more limited
in their ability to spread risk, so they can decide not to
cover people with serious health problems.
candidates are trying to focus broadly on what their plans
would accomplish and are content to leave many of the
details for later. Blendon said that's understandable.
''I believe that
the campaign about health care is going to be about
fundamental values,'' Blendon said. ''The Democrats will
basically say the federal government has a role in
guaranteeing coverage. I think the Republicans will
come back and say we do not need a new federal plan.
What we need are some incentives, more information, more
But the focus on
values rather than on details also contributes to the
two-stage process that damages the prospects for changing
the health care system, Blendon said.
everybody talks only about the problem. Then when the
details finally emerge, everybody talks only about the
trade-offs, which leads to media coverage that has
turned decidedly negative in all the previous health
''The first cycle
doesn't tell you somebody has to pay for this,''
Blendon said. ''And the second cycle doesn't even remember
Susan with cancer.'' (Kevin Freking, AP)