Introduction

The state of health care in the United States has been rapidly deteriorating on President Bush's watch. The ranks of the uninsured have swelled by 6 million Americans, insurance premiums have been rising at five times the rate of inflation, deductibles are increasing by nearly 20 percent per year, and benefits are shrinking.

Facing growing public pressure for action, the president recently unveiled a bundle of health care initiatives. Although fairly modest in scope, the proposals embody a conservative theory for fixing America's health care ills that is quite radical. According to this theory, the way to restrain runaway health care costs is to make individual consumers more cost conscious. The more people use their own money to pay their medical bills, instead of relying on insurance, the more they will insist on getting good value for their health care dollar.

The problem is that most people do not relish the idea of comparison shopping when they are sick. And even if they did, they would not have access to reliable information about what constitutes high-quality health care or a good value. Moreover, the administration's attempts to encourage Americans to shift from group coverage to individually purchased health insurance favors the fittest among us at the expense of the sickest. By undermining the risk-pooling benefits of group coverage, it could create the worst of all worlds -- a Darwinian health care system that is even less equitable than the current system without being more efficient.

Taken together, the president's proposals would undermine the employer-based system of group purchasing through which the overwhelming majority of Americans get their health insurance. Moving away from the job-based system might make sense if the president was proposing to replace it with something better, but he is not. Instead, the administration envisions a world in which individuals "go it alone" in buying health care, rather than pooling the risk of major medical expenses with their fellow workers. That would indeed be a boon for healthy people, since they would be able to buy cheaper coverage. Yet it would mean higher costs for sick people, whose premiums would rise, and it would fail to reduce the number of Americans without any kind of health insurance. Finally, the Bush plan would not even restrain runaway health care costs, since insurance companies -- not cost-conscious individuals -- would still cover the bulk of all health care spending. In short, it represents yet another instance of the triumph of radical individualism and market fundamentalism over a progressive politics of mutual responsibility for health care security.

The following brief is a point-by-point analysis of the president's health care agenda, followed by a progressive alternative.