Gephardt Throws Down Healthcare Gauntlet

April 25, 2003 ( - Representative Richard A. Gephardt (D-Missouri) has laid out what is easily one of the most dramatic proposals for health care since 1993.

>Calling universal health-care coverage “the Holy Grail of public policy,” he is putting it at the heart of his 2004 campaign.   The price tag of the bill is huge (beginning at $210 billion/year), as is its scope (attempting to ensure that as many as 97% of Americans have health insurance).   A s a downpayment, Gephardt would nix the 2001 tax cuts – as well as any that Congress might be inclined to pass this year.

Gephardt said he eventually would restore some provisions of the 2001 tax bill, including the child credit, marriage penalty relief, and a reduction in estate taxes, but that they would be smaller and more “targeted” than those now on the books.

Costs of the program have been projected by Ken Thorpe, a professor of health policy at Emory University who worked on the 1993 Clinton plan. He projected the cost at $213 billion in the first year and $247 billion by the third year, making the three-year cost $690 billion. Thorpe was also responsible for the 97% coverage estimate.

No Constraints?

Critics were quick to point out that the plan does nothing to rein in health-care costs, other than Gephardt’s notion that insuring all Americans would help lower health-care costs. Nor does the plan contain a prescription drug benefit for senior citizens, though Gephardt still favors such a benefit.

Even former Vermont governor Howard Dean, one of the more liberal Democratic candidates and one who has previously called for expanding health-care coverage to virtually all Americans, termed Gephardt’s plan “a pie-in-the-sky, radical revamping of our health-care system that has no chance of ever being passed.”

Gephardt claims that the plan would result in more than $316 billion in increased wages and benefits over the first three years and create more jobs by reducing overhead for employers who already offer health insurance.   He also claims that covering the uninsured and significantly reducing uncompensated health coverage could have the effect of lowering health premium costs by 5-7%.  

The plan consists of several major elements:

  • Corporations that now provide health insurance would receive a 60% refundable tax credit for the share of the premium they underwrite, twice the current deduction.   However, any company that reduces its current share of the cost of the premiums would forfeit the credit.
  • Companies that now offer no insurance would have to do so, and would receive a refundable tax credit valued at 60% of the cost of the insurance, with workers to be responsible for 40% (the proposal would provide subsidies to low-income workers to offset part of that cost).
  • For unemployed workers, the Gephardt proposal would expand various existing federal programs, including the Children's Health Insurance Program (CHIP), to make it possible for them to purchase insurance.

Finally, Gephardt would offer substantial assistance (valued at almost $200 billion over three years) to state and local governments, an amount roughly equal to 60% of the cost to state and local governments for insuring their workers.   That money could be used not only for health care but also for education and other needs.

Clearly, the gauntlet has been thrown down.   "I challenge every candidate for president to offer a health-care plan that covers every American, stimulates the economy, and creates jobs," Gephardt said.   "And I challenge them to tell us exactly how they'd pay for it."