Rudy Giuliani admits that his plan for health care reform won't provide immediate relief to the 45 million uninsured Americans. But if he can persuade even 20 percent of the people already insured by employers to take a $15,000 tax exemption and buy their own health care, he believes market forces would push down coverage costs.
"It has to be done incrementally - it can't be done with a magic wand all at once," the Republican presidential candidate told reporters after a small town-hall style meeting at the Governor's Inn in Rochester. "You have to start bringing the price down before you can start figuring out how many people can you include."
The former New York City mayor offered few details on his plan, preferring instead to juxtapose his "free-market" idea with those offered so far by Democratic presidential candidates, which he called "socialized medicine."
"We've got to solve our health care problem with American principles, not the principles of socialism," he said. "If you take more people and have government cover it, it's called socialized medicine."
Giuliani says health insurance should work more like car insurance. People would shop for plans that suit them best - young, healthy people may opt for the equivalent of liability insurance, while the ill or risk-averse might choose a fuller coverage plan. Healthy habits, like good driving habits, would reap financial rewards, and insurance carriers would compete for consumers, improving quality of care while driving down prices.
The backbone of the plan includes a yearly $15,000 tax exemption for each family (a $7,500 exemption for a single person) that would allow people to purchase their own health insurance. If a family finds a plan that costs only $12,000, the $3,000 left over would be placed in a health savings account to cover costs not included in the plan, including co-pays and deductibles. That account could build over time and eventually be put toward retirement, he said.
Giuliani said he'll have a better idea of the plan's cost in two to three months, when he also plans to have figures on how many uninsured Americans would benefit from the plan. But for the plan to work, about 20 percent of the 120 million Americans insured by their employers would have to take the tax exemption and enter the market on their own, he said.
It could take several years for the program to influence health care costs enough so that more Americans can afford to buy it. But once the prices begin to drop, Giuliani intends to offer vouchers to help offset health care costs for the remaining uninsured.
In a speech before about 70 people in Rochester yesterday, Giuliani said it's the American way to use the free market to solve problems. While Democrats have focused their plans for reform on covering the uninsured, Giuliani thinks his is more economically sustainable than what Democrats have offered so far. Efforts to cover everyone through government spending would likely fall flat, he said.
"It sounds nice, like in the old days, 'A chicken in every pot,' " he said, quoting part of a campaign slogan used by Herbert Hoover in the 1928 presidential election (Hoover won the election, but the Great Depression derailed his promise of prosperity). "They said a chicken in every pot and nobody got a chicken. . . . It's the same with universal health care," Giuliani said.
Universal coverage could overwhelm doctors and hospitals, Giuliani said, leading to waiting lists similar to those in Canada, where 1.5 million Ontarians can't find a family physician and some patients wait months for simple diagnostic tests.
"If single-payer systems are starting to crack . . . why would we want to create one in the United States?" he said.
Giuliani's plan resembles one that President Bush announced last year. Critics of the idea say a free-market approach won't work for health insurance the way it does for car insurance. The elderly, the poor and the sickest may find themselves priced out of the market, and if Giuliani's plan doesn't insure everyone, then the uninsured will continue to drive up prices.
And, critics say, if people are told to use money from health savings accounts to pay for expensive preventive care measures, such as colonscopies or mammograms, they may forgo the initial exams and wind up with cancer, an expensive disease to treat.
After his speech, Giuliani took questions from the audience about climate change, poverty and education. Only two people asked about health care - one inquired about "assisted suicide," which Giuliani said should remain illegal, and the second told Giulani she didn't understand how his plan could help people who can't afford medical expenses now.
"You can't afford to pay the doctor bill and pay your medical premium at the same time," said Carols Saufley, 64, of Rochester. "I think it's just a little too little a little too late."
