Insurance Machine

As costs increase for both employees and employers there is rising public support for health-care reform. This year health-care costs per capita are expected to reach $7,500, an increase of $800 over the past two years and a figure that is more than double the $3,470-per-person figure in 1993.

Meanwhile, since 1993 the number of those uninsured has grown to 45 million from 37 million, and these are costs that are being passed on to the government, along with taxpayers and insurance holders. It has been calculated that for example according to a study by Families USA, a consumer advocacy group, that in 2005, those with insurance paid a hidden tax reaching as much as about $922 on their insurance premiums to pay for the unpaid health-care costs of the uninsured. As these costs for the uninsured continue to rise it can mean additional premiums of $1,500 by 2010.

At the same time that employers are careful of avoiding mandates that would require them to insure employees or pay fines, because rising health costs put them at a competitive disadvantage with foreign companies, big businesses have increasingly called for government action.

What are the differences between the political parties? If you are a Republican you support measures that reduce costs to the government while at the same time encouraging greater consumer choice. While currently employer-provided health insurance is tax exempt, earlier this year President Bush proposed taxing it. His argument is that the current system influences workers to select more expensive coverage so as to get a bigger tax break.

According to his plan, while not increasing costs for the government, all individuals, including those who purchase their own coverage and those who have employer-sponsored coverage, would receive tax breaks of $15,000 for families and $7,500 for individuals. The congressional response for the proposal was quite cool response on Capitol Hill.

Earlier this year Congressional Democrats tried passing a bill that would have allowed the government to negotiate on a one to one basis with drug makers in order to lower drug prices for Medicare. A Congressional Budget Office report however, said that allowing such negotiations would only have a negligible effect on federal spending. The projected savings was set at about $2 million in its first year, accept in the case where the government would be allowed to restrict formularies, or the lists of drugs that would be made available to beneficiaries.

Those who support the Democrat party's agenda are also in favor of an expansion of the State Children's Health Insurance Program. Few supporters however, would advocate as ambitious a plan as that presented by the Clintons in 1993, which included an employer insurance mandate. The plan also would have created competitive but highly regulated HMOs.