Bush vague on financing for health care proposal

February 07, 1992|By Karen Hosler | Karen Hosler,Washington Bureau

WASHINGTON -- President Bush unveiled his $100 billion, election-year plan to provide health care for the uninsured yesterday but backed away from some politically unpopular ways to pay for it, leaving the question of how to finance it unanswered.

His plan urges "reforms" in the federal Medicare and Medicaid programs serving poor and elderly patients, which administration officials say would produce enough savings to finance much of the new health insurance voucher system.

But the president did not specify how much the reforms would save and offered no other specific proposal for how he would raise the money.

Outside groups that have been briefed on the proposal over the past few days said the administration earlier planned for Medicare cuts to finance about two-thirds of the voucher-deduction program, while Medicaid cuts would pay for the rest.

But Mr. Bush backed away from tampering with the politically popular Medicare program yesterday. His proposal does recommend that federal payments to the Medicaid program for the poor be limited to small annual increases for inflation.

"There's no question that he wants to slash Medicare, he's just decided he doesn't want to publicly advocate it," said Ron Pollack, executive director of Families USA, a health-care consumer advocacy group.

Another potential funding mechanism -- a tax on employer-paid health benefits for wealthy Americans -- was dropped from the Bush plan after Republican lawmakers said they wouldn't stand behind it.

The White House made clear that Mr. Bush is primarily interested in putting forth a proposal to be debated along with those of his Democratic opponents in the presidential campaign. He is not willing to take the political heat for backing unpopular means of paying for his health-care proposal unless congressional leaders signal they would be willing to go along, officials said.

There was no sign of that yesterday from the Democrats, who called the president's plan "woefully inadequate" because it doesn't address the soaring cost of medical services. Even some leading Republicans on the health-care issue greeted Mr. Bush's proposal with less than an enthusiastic embrace.

Mr. Bush promised an audience of Cleveland civic leaders yesterday that his plan "will ensure every American universal access to affordable health insurance."

At the heart of his plan is a system of tax credits, vouchers and deductions that Mr. Bush claims will help bring medical care to the 34 million Americans who are uninsured and will lighten the burden of health insurance costs for another 61 million Americans who are struggling to pay for it.

The vouchers would be worth about $300 a month for a family of four with a poverty level income of $14,000 a year, and could be used to purchase insurance through their employer, privately, or through new state-run managed care programs.

Higher-income individuals and families earning up to $80,000 would be eligible for a similar level of assistance through tax credits or deductions figured against their income tax. Those self-employed would be able to deduct 100 percent of their premiums or take advantage of the credit, whichever is greater.

The administration estimated these tax breaks would cost $100 billion over the next five years, when they would reach an annual cost of $35 billion. Officials argue the program would ultimately pay for itself through the "waste and inefficiency" Mr. Bush said he wants to "wring out" of the current system.

As part of his reforms, Mr. Bush is suggesting that both Medicare and Medicaid patients be encouraged into managed-care systems, such as health maintenance organizations, which focus on preventive measures and do not operate on a "fee-forservice" basis.

With concern about the high cost of health care now ranking as the second hottest voter issue, Mr. Bush's proposal yesterday was regarded by his advisers chiefly as a means to make clear that he, too, has a plan to address it.

Before the president even spoke in Cleveland, Republican and Democratic lawmakers held dueling press conferences to applaud or denounce his effort.

"The president is pitting the elderly against the uninsured," said Senate Majority Leader George J. Mitchell, D-Maine, who has offered a "pay or play" scheme that would require employers to provide health insurance for their workers or pay into a government insurance fund.

Sen. Howard M. Metzenbaum, D-Ohio, said the Bush plan "looks more like an insurance industry enrichment plan," because it does nothing to curb the rise in premiums.

At a meeting yesterday of the House Select Committee on Aging, the chairman, Rep. Edward R. Roybal, D-Calif., said tax credits are not large enough to enable millions of uninsured Americans to get adequate health coverage.

New Jersey's Democratic Gov. James J. Florio told the committee that Mr. Bush's plan was "a Band-Aid on a gaping wound."

But House Minority Whip Newt Gingrich, R-Ga., echoed the president's argument that the Democratic plans -- including a Canadian-style universal insurance program -- amount to "socialized medicine."

Rep. Bill Gradison, R-Ohio, said the "pay or play" plan would force some workers onto the Medicaid rolls because their employers don't want to pay for health insurance and would lay them off.

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