When real issues manage to rise above the smoke and mirrors of political warfare in this exhausting presidential campaign, the cost of health care and medical insurance is just behind terrorism and keeping the country safe in top voter concerns.
President Bush and Sen. Kerry have fundamental differences in their approaches to health care and insurance. Sen. Kerry wants to increase reliance on private health insurance subsidized by employers and expand the number of people covered under Medicaid for the poor and Medicare for seniors. The problem with his idea is that government control and subsidies for employers have brought on the current crisis. Even a retooling of an unworkable system will not guarantee that system reforms itself.
President Bush's proposal would free more of us to shop for insurance coverage and medical services, selecting those that fit our needs and wallets. He believes market forces would then limit health care inflation as they do in practically every other realm of commerce.
The problem for most Americans is that we understand very little about health care. I'll bet you didn't know (I didn't until I looked it up) that the average annual cost of health care per individual in America in 2002 (the most recent data available) was $2,350, according to the Bureau of Labor Statistics.
Eighty-six cents of every dollar paid for health care comes from someone else's pocket. Individuals pay just 14 cents on the dollar. As the economist Milton Friedman notes, no other necessity - not food, housing or transportation - receives such a subsidy, nor do we expect our employer to subsidize such things. Why, then, do we think we should pay much less than the true cost of health care, especially when it is the best in the world?
Part of the reason is that politicians have treated health care as a constitutional right and an entitlement. Employees do not fully understand that what an employer pays for his or her health insurance is part of the employee's compensation package. Under the Bush plan, employers would pay less, or nothing, for those costs, and employees could expect more money in their paychecks to pick their own health care at lower costs.
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