N.H. Democrats, GOP sharply divided on healthcare

By Brian C. Mooney, Globe Staff

Most Americans believe healthcare is a critical issue the next president must tackle, but in New Hampshire, the first primary state, there’s a sharp partisan split over government’s role in making healthcare available. As a likely battleground, the Granite State could be a bellwether on the issue in next November’s election.

The stark difference between the parties is reflected in the findings of a Boston Globe poll of likely voters in the Jan. 8 New Hampshire presidential primary – 80 percent of Democrats polled say providing health coverage is government’s responsibility; only 30 percent of Republicans agree. Moreover, it explains the dramatically divergent healthcare proposals of the candidates – Democrats would move toward universal coverage and a larger government role; Republicans generally favor tax incentives to expand private insurance and restrain costs through market forces.

The nation’s $2.2 trillion annual healthcare system is a balky hybrid, combining government insurance, reimbursements, and tax incentive programs with private insurance mostly offered through employers.

Healthcare accounts for nearly one-sixth of the nation’s gross domestic product, and the government pays, directly or indirectly, for about half of the cost. Moreover, costs have increased at nearly twice the rate of everything else in the US economy since World War II, and an estimated 46.5 million Americans under the age of 65 have no health insurance today.

“It’s a carefully constructed bomb with all these wires,” said Thomas P. Miller, a resident scholar at the conservative American Enterprise Institute and a member of the National Advisory Council for Healthcare Research and Quality. The challenge in reforming healthcare, Miller said, is determining “which wire to cut first without blowing the whole thing up.”

Broad consensus is difficult to reach in Washington because insurers, physicians, hospitals, consumer groups, and pharmaceutical companies have contradictory interests and strong lobbies. “All the interests intersect, and they will complain about their ox being gored,” Miller said.

Public health policy researcher Kenneth E. Thorpe said Democratic candidates in general would move toward universal coverage and focus on improving the affordability of healthcare. They would also emphasize prevention and treatment of chronic diseases, such as diabetes, cancer, heart disease, and asthma.

Nearly 80 percent of healthcare spending is on patients with one or more chronic ailments, said Thorpe, an Emory University professor and former Clinton administration health official. Obesity, he said, is responsible for about a third of the growth in health costs in the United States in recent years, Thorpe said.

Republicans, meanwhile, “would provide marginal incentives for people to buy insurance,” along the lines of President Bush’s proposals to expand health coverage, he said.

Republicans also tend to favor issuing Medicaid money to states in block grants to encourage innovative state programs to expand coverage. A core GOP tenet also includes providing transparency for consumers by requiring more public information about treatment success rates and the cost of services negotiated between insurers and providers.

Democrats would raise taxes on the wealthiest Americans to offset the cost of their healthcare plans – John Edwards’s cost estimate is up to $120 billion; Hillary Clinton’s projected $110 billion; and Barack Obama’s up to $65 billion. Bill Richardson contends that savings from expanded preventive programs would offset the $110 billion increase from his program.

The Democratic plans would expand the government’s role substantially. Edwards, a former North Carolina senator, and Clinton, senator of New York, would require insurance for all Americans and would expand the federal employee health plan by making a version of it available to more citizens.

Obama, an Illinois senator, would utilize the federal health plan and mandate coverage for all children, but not for all adults. Edwards would provide tax credits to families and establish regional “healthcare markets,” or health insurance pools, for businesses and individuals to purchase less expensive policies.

The Clinton approach would also offer the choice of a public plan similar to Medicare and provide tax credits to business. Richardson, the governor of New Mexico, would lower the Medicare eligibility age to 55, expand coverage of children and the poor, and offer tax breaks for companies and individuals obtaining their own insurance.

Senator Joseph Biden of Delaware would extend coverage to all children, allow sliding-scale “buy-in” options, based on income, to the federal employee program or Medicare for persons 55 to 64 and provide a federal reinsurance program to cover catastrophic illness. Senator Chris Dodd of Connecticut would create a “Universal HealthMart,” based on the federal employee plan, in which companies and individuals would buy insurance on an income-based sliding scale. Representative Dennis Kucinich advocates full national health insurance similar to the Canadian and Medicare models.

Among Republicans, the plans also vary, but they emphasize private-sector solutions.

Mitt Romney, for example, incorporates elements of the reform plan he helped push through while governor of Massachusetts, seeking to create incentives for improvements at the state level, using Medicaid block grants and federal funds now earmarked to reimburse states for care of the uninsured. Most of those funds would be used to cover the uninsured in new subsidized private insurance plans, according to Sally Canfield, policy director of the Romney campaign.

Romney’s plan, however, would leave to individual states whether they require all residents to have insurance, as the Massachusetts plan calls for. The Bay State plan has reduced the number of uninsured by about 300,000 to around 160,000, Canfield said. Romney also supports full tax deductibility of all medical expenses, including insurance premiums.

Senator John McCain of Arizona advocates deregulation to allow licensing of doctors and insurers across state lines and eliminating “the bias toward employer-sponsored health insurance.” McCain would create a refundable tax credit of $2,500 for individuals and $5,000 for families who purchase their own health coverage.

To pay for the credit, which would come dollar for dollar off the income tax to offset insurance premiums, McCain would phase in a system that would make employer contributions to health coverage a taxable benefit, said Douglas Holtz-Eakin, McCain’s senior policy adviser and a former director of the Congressional Budget Office.

McCain would also support a lump-sum payment of Medicare funds to hospitals and doctors to treat certain conditions to reduce duplication and bureaucracy. .

Former New York City mayor Rudy Giuliani has proposed an income tax deduction of $7,500 for individuals and $15,000 for families to create incentives to buy private health insurance. Giuliani also calls for an insurance tax credit for lower-income Americans not eligible for Medicaid, and a cap on medical malpractice awards.

Former Arkansas governor Mike Huckabee proposes full tax deductibility for health insurance costs for individuals and families, tax credits for lower-income families, and promotion of preventive programs to reduce costs for treatment of chronic illnesses.

Former senator Fred Thompson’s website describes his general support for better “prevention, chronic-care manager, and personal responsibility,” more information technology, less regulation, and the promotion of medical research life-sciences innovation. .

Representative Ron Paul calls the US healthcare system “a federally mandated disaster” and advocates tax deductibility of all medical expenses and making every American eligible for tax-free health savings accounts.
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