Four Cheers for Bill Bradley

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Presidential candidate Bill Bradley deserves four cheers and a slap on the back for his recent health care reform proposal. Two of these cheers would be of the "hip, hip, hooray" variety, but the other two would be of the kind most often associated with New York's Bronx.

Bradley's proposal would require all children to be covered at the momentof birth. He would allow parents to enroll their kids in their own healthplan but would have federal back up for the rest. He would also allowadults to enroll in the Federal Employees Health Benefits Program (FEHBP)and provide a mix of tax credits and deductions to help families afford thecoverage.

Bradley deserves one robust cheer for separating health insurance fromemployment. We will never have a market-driven health care system as longas employers make health care decisions for their employees. Workers mustbe able to choose their own health plans and keep them even when changingjobs. Bradley sensibly proposes that workers be allowed to purchase theirown health insurance, independent of their employers, under a system of taxcredits and deductions to help them afford it.

Bradley gets another hearty cheer for proposing to abolish Medicaid andallow Medicaid recipients to join the mainstream of society byparticipating in the private health insurance market, just like everybodyelse. Medicaid is a failure by any measure that counts. Eliminating theprogram will be one of the best things we could do for the poor.

The less flattering cheers are reserved for two other concepts Bradleyoffers.

The first is because Bradley wishes to make the raising of children afederal responsibility. He says, "Because our children are our nationalfuture, their health care must be a federal responsibility." That is astartlingly arrogant notion that could be easily expanded to includehousing, diet, clothing, exercise and every other aspect of child rearing.America's parents don't need Washington to tell them how to raise theirkids.

Enacting a federal mandate requiring parents to cover their kids is anaffront to America's families. Parents don't purposefully withholdinsurance coverage from their children. Those without coverage simply can'tafford the expense. Making coverage more affordable for these familiesshould be enough, without resorting to the federal policing powers Bradleywould use.

The second Bronx cheer is for the notion of putting everybody into FEHBP.Although purchasing insurance independent of the employer is a good idea,FEHBP is a poor vehicle to use to accomplish that. FEHBP offers a varietyof enrollment options, but they all have to meet the same federalstandards, which include ever-richer benefits and ever-higher costs. Manypeople would prefer to have a lower-cost plan and fund their additionalhealth care needs with either a medical savings account or othernoninsurance methods. But the federal employee unions won't allow this kindof flexibility and experimentation.

Another problem with the FEHBP is that it requires fee-for-service plans tocharge the same premium regardless of location. This means that federalworkers in a low-cost area like Omaha, Nebraska, subsidize the health careof workers in Washington, D.C., even though health care costs half as muchand federal wages are lower in Omaha. Even the Medicare program recognizesthe importance of geographic differences in health care costs. The MedicarePart A payment rates for private health plans in a single state (New York)varies from a high of $458 per month in Richmond County to $218 per monthin Broome County.

FEHBP also requires traditional insurance companies (non-HMOs) to beavailable in all 50 states if the companies want to be part of the program.This makes it impossible for smaller, regional companies to participate,even if they provide better services for less cost. It is a giveaway to ahandful of giant national insurance companies. Curiously, the samerequirement does not apply to the HMOs that participate in FEHBP.

There are many other ways for working people to come together to purchasecoverage outside of the employment system. Labor unions, credit unions,banks, social clubs, churches and housing developments all make forperfectly good pooling mechanisms that can respond to the needs of themembership without cramming everybody into a gigantic federal program.

Finally, the slap on the back is for raising the issue of fundamentalhealth care reform at a time when Republicans and Democrats are all runningfor cover on the issue. Bradley's proposal is important and shouldre-energize the health care debate across the country. He has shown courageand originality in his ideas, and these are qualities that are too rare inpolitics.

Greg Scandlen

Greg Scandlen is a fellow in health policy at the Cato Institute.