‘Kerry/Kennedy Care’ – Prescription for Disaster

Published March 18, 2004

During his campaign for the Democratic Party nomination for President, Senator John Kerry (D-Massachusetts) took a moderate and narrowly defined position on health care reform, casting himself as the spokesman for an unheard majority. Now, with the nomination in his pocket, he is beginning to sound more and more like his ultra-liberal Senate colleague, Ted Kennedy.

Starting from the Left

Campaign rhetoric to the contrary, Kerry began the campaign with a voting record well to the left of mainstream. According to the voting record summarized by Congressional Quarterly, Sen. Kerry voted in lockstep with Sen. Kennedy, the Senate’s most liberal member, in each of 10 years between 1985 and 2001. Over the course of his political career, Kerry has sided with Kennedy 94 percent of the time when key votes were taken on Kennedy’s favorite cause: a government-run national health care plan.

Kerry has supported the Patient Bill of Rights, Mental Health Parity, the Nurse Reinvestment Act, the Family and Medical Leave Act, and the Health Insurance Portability and Accountability Act (HIPAA) of 1996, to name only a few.

Each of those measures imposes significant unfunded regulatory and procedural mandates on doctors and the rest of the health insurance industry. Published research has shown these mandates account for a large part of recent increases in the cost of health care and health insurance. Higher prices, in turn, have led to historically high numbers of uninsured and unpopular private-sector efforts to restrict access to care through HMOs and other types of managed care.

Republican Victories

Republicans have succeeded in passing major health care reform legislation in recent years, compelling Kerry to move to the left with his own health care reform agenda.

Republicans successes include expanding and making permanent health savings accounts; expanding to 100 percent the tax deduction self-employed people can take for their health insurance premiums; the new prescription drug benefit for seniors; and rules to speed the marketing of inexpensive generic drugs.

Experts generally hail these reforms as major steps in the right direction away from over-reliance on bureaucracies and third-party payers and toward a more consumer-driven health care finance model. But to demonize these policies and keep labor union leaders in his election camp, Kerry is adopting Kennedy’s extreme anti-business and pro-entitlement the rhetoric and policy proposals.

New Entitlements

Kerry supports expanding eligibility to the State Children’s Health Insurance Plan to age 24. This is a classic example of what used to be called “creeping socialism,” as a program adopted in the name of saving children expanded to include adults. Proposals to lower the eligibility age for Medicare simultaneously encroach on the private market for health insurance from the other end of the age spectrum.

Such policies pander to specific demographic groups by promising them something for nothing and advance the goal of creating a nationalized health care system, but as sound public policy they are sorely lacking. Government health care programs cause prices and unnecessary utilization of services to rise, reward cost-shifting and waste, and eventually lead to busted budgets and painful efforts to ration access to care.

States are struggling with record deficits, to which the already high cost of SCHIP contributes. Expanding the program further would require massive federal subsidies … from a federal government also awash in debt. And Medicare, newspaper headlines remind us, is already forecast to be bankrupt in 15 years.

New Mandates

Kerry has also dusted off Kennedy’s old scheme of mandating that all employers provide health coverage to their employees. His plan would accompany the mandate with a carrot by having the federal government reimburse employer health plans for 75 percent of the catastrophic costs above $50,000. Details are a bit sketchy right now, but one has to assume insurance companies would get the reimbursement, since employers do not pay for the medical care.

Mandating employer-sponsored health insurance creates it own set of problems. It destroys jobs by encouraging employers to substitute machinery for unskilled labor or to send jobs overseas. It ties health insurance to employers in an age when people are less likely than ever to stay with a single employer for very long, and when employers are recognizing they lack the expertise to act as health insurance companies for their employees. Having the government take over catastrophic health costs gives employers less incentive to manage health care spending, fueling the upward spending spiral.

A Real Choice

If elected, Kerry says he would pass more of the very legislation that has caused health care costs to rise, public budgets to plunge into debt, HMOs to restrict access to care, and the number of uninsured to rise. This is in sharp contrast to the recent direction of health care reform, which has tended to put people in control of their own health care spending and choices.

Kerry, at least at this point in his campaign for President, is simply echoing the liberal plans and promises often made by old liberal warhorses such as Kennedy. Voters wondering how the candidates for President genuinely differ this year need look no farther than at their approaches to health care reform.

Conrad F. Meier is a senior fellow with The Heartland Institute and managing editor of Health Care News. His email address is [email protected].