DES MOINES, Iowa – Democratic presidential candidate John Kerry (search) unveiled his $80 billion health care plan Friday that aims to slash the spiraling costs of medical coverage, including expensive catastrophic treatment and employee premiums.
Speaking to a room of health care professionals, the Massachusetts senator said his plan for near-universal coverage — some 95 percent of adults and nearly all children would be covered under his proposal — addresses a problem that his rivals' plans do not.
"Focusing on coverage without reducing the costs of health care for all Americans is treating the symptoms and ignoring the cause," Kerry said. "We cannot make health care affordable by tiptoeing around the edges, hoping to make progress without raising the wrath of the guardians of the status quo."
The Democratic candidates see health care as a viable policy issue in the 2004 campaign, not only a means to set themselves apart in the crowded field but a potential Achilles' heel for a popular Republican president struggling to right the economy.
Kerry's proposal comes just days after rival Howard Dean (search) offered his $88 billion solution that would expand existing programs to insure more children and low-income adults and weeks after another Democratic candidate, Dick Gephardt (search), set the terms of the health care debate with his $247 billion plan to push businesses to offer coverage.
Rep. Dennis Kucinich (search) of Ohio favors a single-payer, government-run system, and the other candidates are expected to offer their prescriptions for health care in the coming weeks.
To deal with catastrophic care, Kerry's plan would create a "premium rebate pool," run by the federal government. Companies that offer health care to their employees would be eligible for reimbursements from the money pool for 75 percent of the catastrophic costs they incur above $50,000. In turn, the companies must use the savings to reduce the cost of workers' premiums.
Kerry pointed out that statistics show that barely 0.4 percent of medical claims end up costing more than $50,000, but they account for 20 percent of medical expenses for private insurers.
"By covering a significant portion of catastrophic costs in this way, we will reduce average premiums by up to 10 percent," Kerry said.
Kerry's plan also encourages the use of generic drugs and makes it more difficult for manufacturers to keep them off the market, a move that would address the problem of the nearly 20 percent annual increases in prescription drugs costs.
The Massachusetts senator also favors setting aside money for hospitals to install high-tech processing equipment to handle administrative chores.
"A quarter of the money America spends on health care goes to non-medical costs — basically the time spent paying bills and handling paperwork," Kerry said. "No other industry is so inefficient."
Kerry pointed out that while banks have reduced the costs of individual transactions to as little as a penny per transaction, "a single transaction in health care can cost as much as $12 to $25 — and not a penny of that goes to care," he said.
Kerry's plan would repeal some of Bush's tax cuts for the upper-income brackets, a notion that drew criticism from Republican circles.
New Hampshire House Majority Whip Rogers Johnson assailed "the myriad of health plans flowing from the Democrats like so much manna from heaven."
"It's a major increase in government bureaucracy. It's a huge tax increase. There doesn't seem to be any appreciative impact on health care or health care delivery," Johnson said.
In a conference call with reporters, rival Gephardt, the Missouri lawmaker, focused on the proposals from Kerry and former Vermont Gov. Dean.
"The flaw in their plans is they are not comprehensive, they are not universal," said Gephardt, who argued that Kerry's plan wouldn't expand coverage significantly for up to five or six years.
Broadening coverage was the best way to control health costs, according to Gephardt.
"The more people you can get covered quickly, the more you can hold down costs," he said.
Kerry sought to cast his plan as a middle ground amid the competing Democratic proposals.
"This plan focuses on where the problems are, so we don't spend through the roof for care we already have," he said. "It provides help for all Americans, including the middle class Americans whose health care costs are rising and who are too often ignored in these debates."