Kerry Addresses Health Care Costs

EDINBORO, Pa., May 10 -- Sen. John F. Kerry charged Monday that President Bush was ignoring soaring health care costs, as the Democratic presidential candidate launched a week-long campaign to highlight his plan to reduce insurance premiums and extend coverage to 27 million uninsured Americans.

U.S. health care spending has increased by about 10 percent a year since President Bush took office, and the number of people without health care insurance has risen to 43 million. Kerry is promoting a plan designed to cut costs largely by retooling or expanding existing government programs.

Under the Kerry approach, the federal government would pay for the most expensive health expenses, known as catastrophic costs. The plan would also provide tax credits and other benefits to businesses to provide lower-cost coverage to employees and would permit the reimportation of prescription drugs from Canada, among other things. The idea is to push prices down by easing pressure in several areas, from business to bureaucracy, simultaneously.

To spread coverage to the uninsured, Kerry would expand existing programs for lower-income workers, through Medicaid and the Children's Health Insurance Program, or CHIP.

Kerry's health care plan is easily his most ambitious campaign promise, but it comes with a large price tag: more than $650 billion, and perhaps much more, over the next decade, according to health care experts. The proposal dwarfs the senator's plans to increase spending in other areas, including education and the environment.

The senator says he would pay for the health care changes by repealing the Bush tax cuts for those making $200,000 or more each year. Independent experts predict this tax-cut rollback would generate $800 billion to $900 billion over the next decade, which would cover the health program's cost but leave little room for other spending increases in a Kerry administration, assuming he adheres to his pledge to cut the deficit in half by 2009.

"It is a plan that learned the lessons of our efforts to provide health care in the past. We are not going backwards," Kerry said at a speech here at Edinboro University. "It is a plan that recognizes and honors the values of America: People want to chose their doctor, and under our plan they will. People want to chose their plan; under our plan they will. People want choice [and] competition between plans; under our plan they will have it. People don't want the federal government making choice for them; under my plan it doesn't."

The Bush campaign faulted the Kerry plan on several fronts. House Ways and Means Chairman Bill Thomas (R-Calif.), speaking on behalf of the Bush campaign, said Kerry had not pushed these ideas during his 20 years in the Senate, and he derided the overall cost -- which he said could top $1 trillion.

Kerry "simply has been missing in action on health care," Thomas said.

Megan Hauck, deputy policy director at the White House, said the most ambitious part of Kerry's plan -- having taxpayers pay for catastrophic health care costs of $50,000 or more -- would do little to curtail health care spending and would drive up deficits. Kerry is "just shifting the burden from premium payers to taxpayers," she said. Sarah Bianchi, Kerry's policy director, said this provision would cost more than $250 billion over 10 years.

This much the two sides agree on: Health care costs are rising and must be contained quickly.

The average family premium for health insurance has risen $2,777 to $9,549 since 2000, according to the Agency for Healthcare Research and Quality, which is part of the Department of Health and Human Services. Kerry cited those figures, and Bush officials did not dispute the numbers but said those costs have been on an upward trajectory for more than three decades, not just three years.

Both candidates believe medical malpractice costs are a big contributor. But Bush would cap some jury awards, while Kerry favors changing the law to make it harder for frivolous cases to make it into the courtroom. The country "needs to weed out the irresponsible lawsuits," Kerry said. He has voted against the GOP medical malpractice changes in recent years.

Staff writer Amy Goldstein in Washington contributed to this report.