Business for Shared Prosperity

Washington Business Journal (Washington DC), 11/12/07
By Kent Hoover

The presidential election is a year away, but it is already clear that overhauling the nation's health care system will top the domestic to-do list of any new president.

Every major candidate already has announced a plan for extending insurance coverage to more citizens and making health care more affordable and efficient. While some proposals are mere generalizations, others reveal an unusual level of detail for this early in the race.

The election will "go a long way to define what the next wave of health care is going to look like," said Dan Danner, executive vice president of the National Federation of Independent Business. "It's likely there will be major comprehensive health care legislation in 2009 led by whoever the occupant of the White House is."

If a Democrat wins, the federal government's role in health care could increase, and employers could be required to provide insurance or pay a fee to the government. If a Republican wins, more of the responsibility for health care coverage could shift to individuals, and insurance markets could be deregulated with the goal of increasing competition.

"There are big issues up for grabs," Danner said.

Each of the three of the leading Democratic candidates has unveiled an ambitious health care plan that aims to provide coverage for every American.

They "have all taken a really serious stab at addressing this issue in a very thoughtful and comprehensive way," said John Arensmeyer, CEO of Small Business Majority, a national organization of self-proclaimed "progressive entrepreneurs."

All three plans require employers to provide coverage to their employees or pay money to the federal government as a contribution to coverage.

Hillary Clinton would exempt small businesses from this mandate but provide them with tax credits as an inducement to offer insurance.

"We need a system of shared responsibility," Clinton said. "Businesses have to contribute and be a part of it."

Clinton and John Edwards also would require individuals to obtain health insurance.

That's important, said Scott Hauge, president of Small Business California and owner of a San Francisco insurance agency, because "everybody has to be in the pool" to contain the cost of insurance.

Clinton's plan would allow individuals to keep their current insurance, buy private insurance through the plan that now covers federal employees or enroll in a public plan similar to Medicare.

Edwards would create regional health markets where individuals without insurance could shop for coverage. Barack Obama would create a national health insurance exchange for the same purpose.

All three candidates would provide subsidies or tax breaks to low- and moderate-income people to help them pay for insurance.

The leading Republican candidates propose dramatically different approaches, even Mitt Romney, who as governor of Massachusetts signed a health care bill that included mandates to buy insurance.

Instead of touting Massachusetts as a model for other states to follow, Romney says he would provide states with federal incentives to deregulate their insurance markets as they see fit. He would expand tax breaks for individuals who purchase insurance on their own, including elimination of the minimum deductible requirement for health savings accounts.

Rudy Giuliani and John McCain want to eliminate the tax break employers receive for offering health insurance and instead give tax breaks to individuals who buy insurance on their own.

"Let's put the responsibility on the person who is the recipient," McCain said. That way, people would be smarter about how they use the health care system, he said.

Fred Thompson has not released a detailed health care proposal but said he would focus on "free-market solutions," not a "one-size-fits-all Washington-controlled program."

Among the Republicans, McCain's plan offers the most details on cutting health care costs. He would force greater transparency on health care prices and quality, and he would make insurance markets more competitive by allowing consumers to buy insurance across state lines.

Addressing the cost of health care is important to any proposal, Hauge said.

"That's the problem," he said. Without cost containment, "we're just paying into a broken system."

Copyright 2007 Washington Business Journal