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 he could put several elements of his health care plan into motion quickly.
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 costs that exceed $50,000 for one employee, he said at the forum, one in a series underwritten by the California Endowment and the Ewing Marion Kauffman Foundation.
One reason politicians have backed away from proposing catastrophic health coverage is 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 after a $560 deductible for hospital costs and a $1,370 deductible for doctor bills. It was repealed in 1989 due to beneficiaries' concern over the additional premiums they would have to pay. But “that was a different world, and a lot has changed,” Sen. Biden said.
Sen. Biden would also expand 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 [can] spend $1,400 per month for health insurance, they ought to get out more,” the senator said.
Sen. Biden 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. “My wife is a teacher, and when I was hospitalized, we used her insurance because it was better” than the federal employee health plan, he said. But “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.'”
Using the federal employees' plan is an example of the consensus-building that Sen. Biden said he hopes to do as president. “This is about whether or not you're going to be able to, as president, generate a national consensus, because if you're a Democrat, you're going to have to get 15%-20% of Republicans to vote for it; you can't do it with just Democrats. And you're going to have to be able to convince the American people that this is understandable.”
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, tax breaks “that they didn't ask for and don't need.” He would also eliminate tax breaks on capital gains and dividends, and end tax loopholes for hedge fund managers and private equity partners.
Sen. Biden said he would like to see more emphasis on preventive care, 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,” he said. Without insurance, “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 next year or 5 years or 7 years. If we're going to get these costs under control, it seems to me you've 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 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 … would significantly reduce the cost.” Third, with an increased focus on prevention, “by the time people hit the Medicare system who are now in their 30s and 40s, they'll have much more control of these chronic diseases.”