Where They Stand: Health Care

The promises are made at every campaign stop. President Bush pledges to make health care "more accessible and affordable." Sen. John Kerry promotes his ideas as a "plan for stronger, healthier families and children."

Both presidential candidates are keenly aware of how important health care is as an issue to many voters. The latest ABC News poll shows Americans rank health care No. 4 of the issues they're most concerned about — behind the economy, terrorism and Iraq.

"Nobody can duck health care," said Drew Altman of the nonpartisan Kaiser Family Foundation. "Everybody has to show they care about health and that they have a plan."

But in this election year, Altman said, the two candidates have plans that are quite different. Bush and Kerry offer distinctly different philosophies on how best to lower health care costs and provide coverage for more Americans.

"I think the Bush plan is more radical than Mr. Kerry's," said Henry Aaron of the Brookings Institution, a Washington think tank. "The Bush plan would try to begin to move away from the employment-based system to a system of individually purchased health insurance. Sen. Kerry's plan takes the current system and tries to strengthen it."

Bush’s Plan

The centerpiece of Bush's plan is meant to encourage individuals to take more control of their own health care.

The plan includes tax breaks for individuals and small businesses who contribute to health savings accounts. HSAs are accounts in which people can save money tax-free and use the funds to purchase health care.

"The Bush vision is quite radical. He essentially is dreaming of a world where there is no employer-provided insurance," said Uwe Reinhardt, a health economist at Princeton University. "You buy your own insurance, but you pay the first $2,000 to $4,000 per year out of your own pocket."

The idea makes a lot of sense for healthy Americans who don't expect to have many medical problems. They can buy insurance with a low premium and a high deductible and use the money from their HSAs to pay for minimal expenses they incur.

"People who are now buying very expensive insurance on the individual market are attracted to this, because they are finally getting a tax break, and they are getting an opportunity for their employers or themselves to put some money aside for health eventualities that we all run into," said Joseph Antos of the American Enterprise Institute, another think tank in Washington.

Bush campaign officials say consumers will be more savvy and aware of costs if they're in charge of their own health expenses. That, they argue, will reduce the total bill America pays for health care.

But critics worry the healthiest, wealthiest Americans will be more likely to take advantage of the tax breaks and the system would leave poorer patients behind.

And health savings accounts are a relatively new phenomenon, so it's difficult to measure how much impact they could have. Researchers at the RAND Corp. estimated the use of such accounts by the nonelderly might change health spending overall by 1 percent or 2 percent — not a very big number.

Kerry's Plan

Kerry's health care proposals are less radical in theory. They are more extensive, though still not a total overhaul of the current system.

The Democratic presidential candidate would create a voluntary program in which businesses would offer health coverage for their employees in exchange for having the federal government pick up most of the tab for catastrophic cases. He would also give tax credits to small businesses to help them insure workers.

In an effort to cover more Americans, Kerry would also offer incentives to the states to expand programs for low-income families and children.

The Kerry plan would likely reduce the premiums many Americans pay for health insurance. But because it would cover more people, it would cost at least four times as much as the Bush plan — $650 billion over 10 years, by the campaign's own estimate.

The Bush campaign estimates the president's health care plan would cost about $158 billion over 10 years.

"The Kerry proposal does not cut costs overall. In fact, in truth it would have to increase it because it covers more people who will then use health care they didn't use before," says Princeton's Reinhardt.

Critics say Kerry's ideas merely redistribute the cost of health care in America.

"The Kerry plan isn't actually going to save health care costs. For a lot of people, it is going to reduce what they pay for health insurance premiums, but the cost didn't go away. The costs are just turned into higher taxes," said Antos.

Lowering the Cost of Prescription Drugs

As for prescription drugs, Bush takes credit for signing a bill to lower prescription drug prices for seniors under Medicare. Most of the changes in that bill take effect in 2006.

Many Democrats said the bill did not go far enough in providing relief, but independent analysts say it will help seniors — particularly those with lower incomes or catastrophic prescription drug costs.

Kerry offers his own ideas about lowering the price of prescriptions. The Massachusetts senator would allow the federal government to negotiate prices with drug manufacturers on behalf of Medicare patients. He proposes to allow re-importation of prescription drugs from other countries, such as Canada. And he promises to speed generic drugs to the market.

Analysts say Kerry's proposals would likely make a difference in drug prices if they became law.

However, passing any new health care or prescription drug policy through Congress is a difficult prospect.

Both Kerry's and Bush's plans are modest compared with what President Clinton tried to do when he entered office. And with good reason.

"No one wants to repeat, to take the risk that President Clinton took in putting forward a comprehensive overhaul of the health care system that became a big target for opponents. It scared the American people, and so both candidates are proposing small or incremental approaches," said Altman.

"To reinvent health care in this country is impossible," said Reinhardt. "You can fix it, fiddle with it, but you can't change it."