Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, August 16, 1993 TAG: 9401140001
SECTION: EDITORIAL PAGE: A7 EDITION: METRO
SOURCE: STUART M. BUTLER
DATELINE: LENGTH: Medium
First, a government board will decide what will be included in the standard benefits package available to the public. This means most health benefits will be determined by a distant group of all-powerful bureaucrats. Americans won't like that. Whatever decision the board makes on politically sensitive procedures like abortion will generate deep resentment in large sections of the electorate.
Second, another set of bureaucrats - the so-called health-care co-ops - will decide which health plans can compete in a given state or region. The problem is that these co-ops will likely be controlled by insurance companies - or become independent bureaucratic fiefdoms. Either way, the public will lose.
Third, the White House wants to impose a ``global'' national budget on health-care spending, possibly backed up with tight price controls. For this to mean anything, there would have to be explicit rationing of health care - something vehemently opposed by the overwhelming majority of Americans.
Fourth, the administration apparently intends to pay for its program with a new payroll tax on businesses. The problem is that this tax would cripple an already weakened economy, destroying millions of jobs.
Lewin-VHI, one of the country's leading health-care consulting firms, estimates that the tax would have to exceed 10 percent to provide benefits for workers, their dependents and the currently uninsured. Such a tax would add $73 billion to the cost of doing business in the United States each year. It would increase annual labor costs by more than $1,000 per employee for 69 percent of U.S. businesses. And it would add significantly to the costs of health care for millions of families. Not an attractive political package at all.
So why not deal with America's health-care crisis another way: through consumer choice and market competition? We already have a successful working model of this in the Federal Employees Health Benefits Program (FEHB), the one that covers Hillary and Chelsea Clinton, members of Congress, and other federal workers, retirees and their dependents.
By allowing federal workers to choose between competing health plans, FEHB has consistently controlled health-care costs better than employer-sponsored plans. And federal employees don't lose their insurance when they change jobs or retire.
The Heritage Foundation has developed a proposal similar to FEHB for the entire nation. It would work like this: Instead of tying health-care benefits to the workplace, families would be able to choose a plan provided through a union, HMO, church, fraternal organization or some other source - and keep those benefits when they change jobs.
The Heritage proposal would accomplish this by replacing the tax break for company-provided health plans with a tax credit for families. Low-income families and individuals would get a voucher to buy insurance and pay routine out-of-pocket expenses. The higher a family's health costs compared with its income, the higher the credit would be. The proposal would require all households to obtain a minimum basic health-insurance package.
Legislation based on the Heritage plan was introduced in Congress last year by Sen. Orrin Hatch, R-Utah. A revised version is being developed this year by Sen. Don Nickles, R-Okla., and Rep. Cliff Stearns, R-Fla.
How politically viable is the idea of consumer choice? Ask newly elected Texas Sen. Kay Bailey Hutchison, who trounced former Sen. Bob Krueger, using the FEHB analogy with devastating effect: ``The difference between us,'' said Hutchison in one of their televised debates, ``is that you don't want to give everybody in America what you have as a member of Congress. You have exactly the choice I am trying to give everyone ... you choose the [plan] that is best for your family. You get the tax credit and you are able to spend the money the way you want to. I want everyone to have the choice Bob Krueger now has.''
Hutchison's point is valid. Why should members of Congress, White House staffers, the Clintons and the federal work force have a health-care program that is portable, affordable and based on individual choice - while some ill-defined bureaucratic behemoth makes decisions for the rest of us?
\ Stuart M. Butler, vice president and director of domestic and economic policy studies at The Heritage Foundation, Washington, D.C., is co-author of the Heritage Consumer Choice Health Plan. This essay is adapted from his recent article in Roll Call.
\ Knight-Ridder/Tribune
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