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, Sen. Biden, now in his sixth term, added that unlike Sen. Hillary Rodham Clinton (D-N.Y.) and former Sen. John Edwards (D-N.C.), he would not mandate health insurance. Instead, he would encourage employers to continue offering coverage by guaranteeing the federal government would pay 75% of all costs for catastrophic health care that exceed $50,000 for an 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 in recent years 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 It was repealed in 1989 due to Medicare beneficiaries' concern over the additional premiums they would have to pay.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.
Another part of Sen. Biden's plan would be to 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 … is fat and happy and willing to spend $1,400 per month for health insurance, they ought to get out more,” he 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. “Why not go out and pick a more perfect plan? The reason is, 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.'”
Sen. Biden would also let 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 his proposals at $90–$110 billion a year, to be partly achieved by rolling back tax breaks for the richest 1% of Americans. He would also halt 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,” he said. “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 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.”
Sen. Biden 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, like we do in the Veterans Administration, would significantly reduce the cost.” Third, if he can implement his plans for 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.”