Sen. John Edwards, D-N.C.
Carlos Osorio  /  AP
Presidential candidate former Sen. John Edwards, D-N.C., outlined details of his health care plan Thursday, at the East Riverside Health Center, a federally funded community clinic in Detroit.
updated 6/14/2007 4:11:54 PM ET 2007-06-14T20:11:54

Democratic presidential candidate John Edwards on Thursday proposed cutting health care costs by overhauling the patent process for breakthrough drugs and requiring health insurance companies to spend at least 85 percent of their premiums on patient care.

The former North Carolina senator offered details of a universal health care proposal he released in February during an appearance at the East Riverside Health Center, a federally funded community clinic.

Edwards' plan would offer cash payments in place of long-term patents for companies that develop certain breakthrough drugs and then reap large profits because of the monopolies those patents provide.

He said offering cash incentives instead would allow multiple companies to produce generic and other versions of those drugs to drive down prices. Campaign officials said the payments could be voluntary for drug companies and would be aimed at spurring the development of drugs that cure diseases.

"Dealing with the health care crisis is about more than just about coverage," Edwards said. "Our health care system is entirely too expensive. We put more money into health care than any country in the industrialized world and we get one of the worst products out in the other end."

He also said his plan would require health insurance companies to spend at least 85 percent of the premiums they collect on patient care, adding that 30 percent of insurance premiums currently go toward administrative expenses and profit. He said New York, Minnesota, New Jersey, Florida already impose similar requirements.

His plan also would require that all Americans sign up for health insurance and would enact various reforms aimed at lowering administrative costs for providers and improving chronic and preventive care for patients. About 47 million people currently lack health insurance in the United States.

Paying the price
Edwards has faced criticism for his universal health care plan, in part because it would raise taxes and could cost $90 billion to $120 billion.

Edwards said Detroit, where General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group spend $16 billion annually on health care costs and are expected to pay $114 billion in future retiree benefits, is indicative of health care ailments felt nationwide.

"These companies and their unions made a promise to workers," he said. "And that promise was that they'd have health care coverage. And now it's time for the government to meet its share of the responsibility of ensuring that those promises are met."

Edwards previously has proposed that employers be required to provide health coverage to workers or pay into a government fund to support insurance and allow workers to choose among plans.

A rival Democratic presidential candidate, Illinois Sen. Barack Obama, has proposed to provide health care to millions of Americans and more affordable medical insurance, financed by tax increases on the wealthy.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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