WASHINGTON — Sen. Joseph R. Biden Jr. (D-Del.) will tell you right up front that health care would not be his top priority if he were elected president.
“Ending the war in Iraq will be my single highest priority, and preventing war in Iran will be one of my highest priorities as well,” the senator, a candidate for the Democratic presidential nomination, said at a forum on health care policy sponsored by Families USA and the Federation of American Hospitals.
That said, the sixth-term senator added that there is no reason he couldn't put several elements of his health care plan into motion in the first 6 months of his presidency.
Unlike Sen. Hillary Rodham Clinton (D-N.Y.) and former Sen. John Edwards (D-N.C.), Sen. Biden said he would not mandate that every citizen obtain health insurance. Instead, he would encourage employers to continue offering coverage by guaranteeing that the federal government would pay 75% of catastrophic health care that exceeded $50,000 for an individual employee.
“The carrot is that [employers] get reinsurance, but the stick is they have to insure everybody,” he said at the forum, one in a series with presidential candidates underwritten by the California Endowment and the Ewing Marion Kauffman Foundation.
One reason politicians have backed away from proposing catastrophic health care coverage is that they remember what happened 20 years ago with the Medicare Catastrophic Coverage Act, the senator noted.
That law, signed by President Reagan in 1988, gave Medicare beneficiaries full coverage for hospital stays of any length after a $560 deductible for hospital costs and a $1,370 deductible for doctor bills. It was repealed in 1989 because Medicare beneficiaries were concerned about the additional premiums they would have to pay. But “that was a different world, and a lot has changed,” Sen. Biden said.
Another part of Sen. Biden's plan for the first 6 months of his administration would be getting all children covered. He would start by expanding the State Children's Health Insurance Program (SCHIP) to include children in families making up to $60,000 per year.
“Anyone who thinks a couple who makes $60,000 a year and has four kids … is willing to spend $1,400 per month for health insurance, ought to get out more,” the senator said.
He also proposes allowing the public to buy into the Federal Employees Health Benefits Program, even though he admits it may not be the best health insurance program available. “It's there, everybody understands it, and there's a sense of confidence about it—'If my senator has this, it must be good enough for me.'”
Another part of Sen. Biden's health care proposal includes letting anyone 55 years and older buy into Medicare. The government would provide subsidies for low-income citizens who couldn't afford to pay the Medicare premium.
He estimates the cost of all these proposals at $90-$110 billion annually, which he said can be partly achieved by rolling back tax breaks for the richest 1% of Americans. He would also eliminate tax breaks on capital gains and dividends, and end tax loopholes for hedge fund managers and private equity partners.
In addition to his health insurance proposal, Sen. Biden said he would like to see the federal government put more emphasis on prevention, although he admitted such an investment might not pay off for a while. “That's one reason I want to insure children at the front end. You have children who don't have health insurance, and parents not being able to take them to a regular physician … they build up problems, so they end up being less healthy by [the] time they're 21 years old.”
Sen. Biden continued, “The whole notion is changing the paradigm—front end, costs; back end, significant savings.
“One of the problems with the mentality of American businesses and insurance companies is that they always think about the next quarter. Very seldom does anyone think about the next year or 5 years or 7 years. If we're going to get these costs under control, then it seems to me that you have got to be investing now.”
Medicare costs will grow dramatically over the next decade, as the Baby Boom generation retires, Sen. Biden said. He offered three suggestions for cutting Medicare costs.
First, “we should be reimbursing private insurers [who participate in the Medicare Advantage program] the same way we reimburse everyone else. We're reimbursing them about $10 billion a year beyond what we're reimbursing others.”
Second, “being able to negotiate price relative to cost of drugs, [as] we do in the Veterans Administration, would significantly reduce the cost.”