Rising Cost Of Health Care Could Hurt Bush

EVERY time a Chrysler rolls off an assembly line in the United States, the cost includes at least $700 in health-care expenses for the company's employees.Health-care costs at Chrysler Corporation, like thousands of other American businesses, are becoming an overwhelming burden that is driving up product prices, cutting profits, and threatening the prosperity of American firms and families. Democrats say health care will be the most critical and controversial domestic issue of the 1990s. They say it could bring about a political showdown with George Bush that could put a Democrat back into the White House. "Americans see major problems in the health-care system and want strong public solutions," says Celinda Lake, a Democratic pollster. Republicans admit there is cause for concern. "The political future of the country is up for grabs here," says Doug Bailey, a Republican consultant. The domestic agenda, "led by health care," is what the battle will be about, he predicts. Thirty-five million people in the US have no health insurance, but Ms. Lake says the problem goes far beyond "compassion" for those uninsured Americans. Even people with good jobs and insurance sense that they are increasingly at risk, she says. Costs are escalating so fast that millions feel in danger. Pollster Humphrey Taylor, president of Louis Harris and Associates Inc., agrees. "Fear of losing one's health insurance is now a major concern," he says. "This is a pocketbook issue, not a compassion issue, for most voters," Lake says. As one voter recently told her in a focus group: "Affordability is the biggest problem. If you speak of access, you should be able to afford it. Something could be there, available. But if you can't afford it, what good is it?" The crisis that Lake and Mr. Taylor see in health care has sprung from several causes. 1. The middle class "squeeze." Ever since the 1970s, middle- class incomes have leveled off. Wives often must enter the workplace just to keep their families on the same economic level that a single breadwinner could attain in the 1950s and 1960s. 2. Job insecurity. Many sources of steady jobs - banks, auto companies, and steel mills, to name a few - have hit hard times. That has forced millions of people to take lower-paying jobs, often without fringe benefits like health insurance. 3. Soaring costs. Americans spent $604.1 billion on health care in 1989, or about $2,400 per person. That is double the per capita spending in many European countries where health-care access is guaranteed. Health-care inflation in the US has outpaced inflation in every other segment of the economy since 1981. Lake explains the political fallout this way: "The 1992 election comes at a period when voters are worried about the economy, their standard of living, their children's economic future, and the general direction of the country. Today, rising prices are voters' top economic concern ... and the cost of health is central to those concerns." The political question is: Can Democrats agree on a plan to solve the problem? Or will the Republicans co-opt them? There are many competing ideas, ranging from the nationalization of health care to tinkering with the present system. A number of leading senators, including majority leader George Mitchell of Maine, John D. Rockefeller IV of West Virginia, Edward Kennedy of Massachusetts, and Donald Riegle of Michigan, introduced the principal Democratic proposal June 5. Senator Mitchell noted at the time: "We must find a way to bring health-care costs under control or we risk adding millions more to the rolls of the uninsured and ultimately face a total collapse of the health-care system." The heart of their proposal is "play or pay." Employers would be forced either to provide health insurance or to pay a tax that would go into a fund known as AmeriCare. Those not covered by employers would have access to AmeriCare coverage. The bill would also create the Federal Health Expenditure Board, which would set spending goals to hold down costs. The American Medical Association supports a plan that would require employers to provide health insurance and would create risk pools to insure people now considered uninsurable. Medicaid would be expanded to provide uniform nationwide coverage for those who could not afford it. Others, such as Rep. Marty Russo (D) of Illinois, support a Canadian-style system in which the federal government would pay all health-care costs. This "single-payer" system would save so much in administrative costs that it could cover all of today's uninsured Americans with no increase in spending, its supporters claim. Yet Robert Moffit of the Heritage Foundation sees danger in all this for Democrats: "Everybody says they want high-health care, but nobody wants to pay for it. The Democrats run the risk of overpromising.... It has lots of political danger."