When real issues manage to rise above the smoke and mirrors of political warfare in this exhausting presidential campaign, the cost of health care and medical insurance is just behind terrorism and keeping the country safe in top voter concerns.

President Bush and Sen. Kerry have fundamental differences in their approaches to health care and insurance. Sen. Kerry wants to increase reliance on private health insurance subsidized by employers and expand the number of people covered under Medicaid for the poor and Medicare for seniors. The problem with his idea is that government control and subsidies for employers have brought on the current crisis. Even a retooling of an unworkable system will not guarantee that system reforms itself.

President Bush’s proposal would free more of us to shop for insurance coverage and medical services, selecting those that fit our needs and wallets. He believes market forces would then limit health care inflation as they do in practically every other realm of commerce.

The problem for most Americans is that we understand very little about health care. I’ll bet you didn’t know (I didn’t until I looked it up) that the average annual cost of health care per individual in America in 2002 (the most recent data available) was $2,350, according to the Bureau of Labor Statistics.

Eighty-six cents of every dollar paid for health care comes from someone else’s pocket. Individuals pay just 14 cents on the dollar. As the economist Milton Friedman notes, no other necessity — not food, housing or transportation — receives such a subsidy, nor do we expect our employer to subsidize such things. Why, then, do we think we should pay much less than the true cost of health care, especially when it is the best in the world?

Part of the reason is that politicians have treated health care as a constitutional right and an entitlement. Employees do not fully understand that what an employer pays for his or her health insurance is part of the employee’s compensation package. Under the Bush plan, employers would pay less, or nothing, for those costs, and employees could expect more money in their paychecks to pick their own health care at lower costs.

Possibly the most concise and readable explanation of why health care and insurance have become so expensive and beyond the reach of many is contained in a new book by Sally C. Pipes, president of the Pacific Research Institute, a think tank based in San Francisco: “Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer.” Pipes is a Canadian who lives in the United States. She fears, “If (the United States continues) on the present path of giving more and more power to the state, this country will suffer the same problems as are being faced north of the border.”

The book is a short but well-researched and well-reasoned critique of the American and Canadian health care systems. Pipes writes, “The public needs to know that it can safely move away from a tax system that encourages employer-provided health insurance. In Canada, the public must be weaned off a system in which public health care brooks no competition. In both instances, less government intervention can yield greater affordability, access and quality.”

Preferential tax treatment was given to employers as a concession after World War II when wage and price controls were in effect. The controls are gone, but the preference remains.

Pipes also believes true medical reform must include giving individuals a chance to purchase health care with pre-tax dollars, whether or not they have a job. “Such a legislative change,” she writes, “would break down the third-party payment system and reform the way health care costs are paid. Health insurance would be returned to its proper role of providing coverage for catastrophic events. Individuals could join all manner of voluntary groups, seeking the best deal and the health care plan that is right for them.”

There is much more in Pipes’ book, including recommendations for moving away from the dominant system of insurance in the United States — managed care — and toward a system directed by consumers, such as Health Savings Accounts, which empower individuals to make decisions affecting their health.

The Bush plan fulfills more of Pipes’ recommendations than the Kerry plan. Armed with such information and given the power, individuals can make their own choices — for better and more affordable health care, and for a president who will allow them to have it.

— Cal Thomas is a columnist for Tribune Media Services.