Hillary's Turn: A Revised Health Plan for a New Debate -- And Why It Just Might Work

Hillary Clinton's health plan received a warm reception when it was released Monday. Ezra Klein of the American Prospect, Jon Cohn of The New Republic, and Paul Krugman of The New York Times each offered praise. Even resident Times conservative David Brooks opined that the plan was "a huge step forward from 1993. It's better than the GOP candidates' plans." Rich Lowry of National Review admitted, "She re-enters the health care debate from a position of strength."

To be sure, there was the expected grumbling from supporters of single-payer national health insurance, and the predictable overheated attacks from the Republican presidential contenders. All in all, however, the launch was about as successful as a policy debut could be, erasing for a moment the bad memories of the early 1990s reform debacle that has come to be seen as Senator Clinton's main legacy on the issue.

All this raises an obvious question: Why should we expect anything different this time? Is this moment more auspicious than when Clinton last battled for this issue? And if so, why?

Actually, the possibilities for reform are greater today. That's one reason I've spent much of the last few years promoting an approach similar in crucial respects to those embraced by John Edwards, Barack Obama, and Clinton.

For one, the context has changed. Not only are the problems in U.S. health insurance far worse, but there's also the prospect for a more effective reform coalition than we saw 14 years ago. This coalition would include not just unions but also business leaders -- or, at least, it wouldn't attract the unified opposition of business leaders. No less important, reformers have updated their strategies in important ways, and none more so than Hillary Clinton.

***

Much looked good for health reform in 1993. For starters, the issue had been catapulted to the top of the political agenda by a national recession, growing corporate angst over rising medical costs, and the surprise victory of an unknown Democrat, Harris Wofford, in a special 1991 Senate election. In response, President George H. W. Bush had proposed a major plan, and leading Republicans, including Senate Minority Leader Bob Dole, had released their own alternatives. Meanwhile, Bill Clinton had run for president talking about this issue, and the 1992 election had ushered in unified Democratic government for the first time in 12 years. Lastly, polls showed great public interest in the issue, and at least superficial support for major change. No wonder so many believed the time had finally come for serious action.

So what went wrong? By my reckoning, four crucial factors doomed the Clinton plan, and ultimately any meaningful reform initiative. First, the recession lifted and health care costs moderated, encouraging many corporate leaders to back away from action. Second, and even more important, conservative Republicans, led by Newt Gingrich, mobilized to use the issue as the springboard for capturing Congress. To make matters worse, the Clinton administration made a series of crucial missteps--the third factor and one I'll discuss shortly. Fourth and finally, amid the growing controversy over what should be done, many Americans became fearful that, for all the problems with the current system, reform would hurt their present coverage.

None of these barriers has disappeared. Indeed, Republicans are, in general, further to the right on health care today than 1993. But the pressure for change is greater. Health costs have escalated dramatically since the mid-1990s, straining both private and public budgets and encouraging more and more employers and workers to forgo insurance. Personal bankruptcies caused by medical costs, rampant uninsurance and underinsurance, runaway medical debt, crippling benefit costs for employers -- all these problems have grown far more prevalent and troubling. In his speech before Congress in 1993, President Clinton said, "This health care system of ours is broken, and it's time to fix it." If it was time then, it is well past time today.

These problems are not just getting worse, they increasingly affect the middle-class. Again, this was true in the early 1990s, but it's more true today. Over a two year period, a shocking one out of three non-elderly Americans goes without coverage. A recent survey by Consumer Reports found that nearly half of adults younger than 65 -- most of them insured -- are "somewhat" or "completely" unprepared to cope with a costly medical emergency in the coming year. The median household income of underinsured respondents was almost $60,000, and nearly a quarter lived in households making more than $100,000. The recent census report that showed the number of Americans without health insurance setting a dubious new record in 2006 -- 47 million, up from 44.8 million in 2005 -- also showed most of that rise occurring among middle-class families. Coverage for the poor has expanded since the early 1990s, but the employment-based framework on which middle-class workers rely is crumbling. That means a politically crucial segment of the voting population is increasingly exposed to the hassles and anxieties of inadequate coverage and ruinous medical costs.

But American politics is never simply about solving agreed-upon problems, even when they affect large segment of the middle class. So two additional factors might hasten this reform. First, corporate America may well be ready to acquiesce to major changes. The last decade has seen business pull out every trick in its arsenal for controlling costs--to little avail. Now, the only surefire way to cut costs is to cut coverage and shift risks onto workers, which is not just unattractive to most businesses, but also likely to stoke public interest in major reform.

Second, those interested in reform have returned to their field of dreams with greater sensitivity to some of the political risks--particularly the fear of Americans that their current coverage, however substandard, will be hurt or taken away without something better taking its place.

It's worth emphasizing that Americans are--and were in 1993-94--eager to see our system reformed. Moreover, they're more supportive of government action than you might think. But the Achille's heel of reform efforts is that most Americans do have some source of insurance most of the time. Against this backdrop, the easiest way to kill reform is to say, "Oh yes, I support change, but this change will destroy what you have, this change will make you pay more for less."

***

All of which brings us to Senator Clinton's new plan. While clearly a work in progress, it is unmistakably the reflection of long and hard strategic thinking. (Full disclosure: I offered advice to the campaign, and was gratified by their responsiveness.) And though Clinton's plan is extremely ambitious relative to the Democratic presidential plans of the last two presidential elections, it is notably cautious relative to what President Clinton proposed in 1993.

Most journalists have described the essence of the Clinton plan as an "individual mandate," a requirement that everyone have health insurance. But the individual mandate is only one of three key elements. Revealingly, in her speech releasing the plan, Clinton talked about the new choices she'd provide and employers' responsibilities to help pay for coverage before she even got to the individual requirement.

Which is a good thing: Because an individual mandate by itself is neither a popular nor an effective route to affordable quality care for all. In isolation, an individual mandate is either cruel or chimerical, forcing many to buy coverage they really can't afford or failing to achieve its goal of universal insurance. An individual mandate works best as an auxiliary precaution, a way of encouraging people to obtain insurance after they have been provided with low-cost options and their employers have been required to share the cost with them. Thankfully, that's the role it plays in Clinton's new plan.

Rather than the individual mandate, the essence of Clinton's plan is a new menu of health plan choices--which, crucially, will include a new, comprehensive public insurance plan as well as private options. More than either Edwards or Obama, Clinton has revealed a dirty little secret of our current system: It provides few Americans with anything like the range of choices that our idealized image of private markets suggests. American health insurance is like a supermarket where the doors are closed to a substantial minority and the rest get to shop in only one aisle -- if they're lucky.

Clinton's plan would open the supermarket doors to all and expand the range of choices for many. The basic idea is that larger employers would be required to either offer good coverage or help finance coverage for their workers through a new national insurance framework, which Clinton is calling the "Health Choices Menu." Individuals without ties to the workforce could buy coverage through the Health Choices Menu as well. Though Clinton wouldn't require small businesses to cover their worker or help finance coverage, she would offer tax breaks to encourage them to offer insurance, and their workers would be able to sign up for highly subsidized coverage from the Health Choices Menu just like other workers

Perhaps the most welcome element of the Health Choices Menu is that it would include, alongside a range of private plans, a public insurance option modeled after Medicare. This is welcome because allowing people to choose a Medicare-like plan provides an option few Americans now have and because public insurance has some major virtues -- including low administrative costs, open choice of physicians and huge capacity to bargain for lower prices. It's also somewhat surprising that the Clinton campaign emphasized this idea, because while I have been promoting this approach and both Edwards and Obama have embraced it, it may provoke some conservative attacks. Moreover, this idea was explicitly rejected by President Clinton's advisers back in 1993--one of whom described providing a Medicare-style option as "an exceptionally clever way of undermining the entire strategy" embodied in the 1993 plan.

Yet, in this respect and others, Senator Clinton has departed from the approach she sought to sell to Congress nearly 15 years ago. Hillary Clinton circa 1993 was trying to convince politicians and the public that most workers should be getting their coverage through new regional organizations that would encourage people to switch to tightly managed HMOs and impose caps on how much health plans could charge. Hillary Clinton circa 2007 is talking about building on what works in the present system while fixing what doesn't, letting people have more choices, and providing new resources to make those choices affordable.

Both plans look big and ambitious. But, in a variety of respects, the new Clinton plan is more politically savvy and sensitive to the institutional barriers to reform than was the ill-fated 1993 initiative.

***

Will that be enough? The high-profile rollout suggests that Clinton is already looking toward the general election. And Clinton is the clear front-runner -- both for the Democratic nomination and for the presidency. But much can change in a year, and neither a Clinton victory nor a Democratic victory should be taken for granted.

Then there is the difficult task of building a reform coalition in Congress. It's clear that any reform plan will face the threat of a Senate filibuster, meaning it will need sixty Senate votes to succeed. And while there are ways around the filibuster--the budget process, reforming Senate rules--none is particularly attractive. In 1993, President Bill Clinton pursued a strategy that ended up alienating both congressional liberals and congressional conservatives. In 2010, President Hillary Clinton, or any other Democratic president, will have to do better to have any chance of success.

The main challenge is not to develop an even more detailed health plan--which could and should be left to Congress. In 1993, in part because President Clinton received advice to this effect from congressional Democratic leaders, the Clinton administration set up a massive internal process to refine the plan that had been decided upon during the campaign--a process that took up valuable time and short-circuited congressional and interest-group bargaining. Whatever Democratic leaders say, a new Democratic president should follow the route President Bush did on tax cuts in 2001: Develop the broad outlines, then leave it to Congress to broker the deals.

The real challenge is to bring Democrats together around a reform vision that can attract Republican moderates, and then to cross-pressure those moderates, and wavering Democrats, by mobilizing the support of the public and important allied groups. In uniting Democrats, Senator Clinton will inevitably have to clarify some aspects of her plan. She will also need to address the concerns it is likely to raise among more liberal members of the party - concerns that go to the heart of the plan's effectiveness and intent..

For example, is the exemption of small businesses from the requirement that they help finance coverage really consistent with affordable coverage for all? How will people sign up for coverage if their employer doesn't offer it? Will employers manage enrollment and withholding of premiums as they do now? Can workers whose employers offer good coverage be allowed to opt out of it and enroll in one of the new choices that the federal government will offer--which could wreak havoc with employment-based plans? Does it make sense to preserve separate health programs for low-income Americans at the state level, when a new national framework is in place? And will the Clinton approach really use the new public option to its fullest advantage, as means of improving quality and controlling costs--or merely treat it as an afterthought?

These may seem like dry policy questions, but they are politically crucial for assuaging the concerns not just of the public but also of the committed reformers who have tirelessly fought for the goal of universal coverage during the long years when that goal seemed out of reach.

A conceit of some commentators is that compromise means promoting a lowest-common denominator reform plan out of the box. But this is a grave mistake, and so far Clinton has resisted making this error. We have seen such grand compromises in the past: insurance portability, health insurance for poor kids, Medicare drug coverage that appeals to both the right and left. And if we have learned anything from these episodes, it is that while something is better than nothing, something that will truly achieve the broad goal of health security is much better than something that will spend precious financial and political capital to move us only haltingly in that direction.

Comments

[stupidforum]

Why is a for-profit health insurance company's bureaucracy, which is accountable only to its major shareholders, better at delivering healthcare services than a federal agency or bureaucracy which, if the system of government is properly working, is accountable to the voting public?

As for Hillary's "Health Choices Menu" portion of her "plan":
If Health insurance co. "A" has a plan that's horseshit;

And Health insurance co. "B" has a plan that's dogshit;

And Health insurance co. "C" has a plan that's chickenshit;

Therefore, no matter which private Health insurance company's plan one chooses, one will always end up with BULLSHIT.

[Doofus]

'30 full pages of prescription drug ads in Time Mag...'

What? Big Pharma is advertising in Big Media!
As Big Media is telling US about Big Politics!

I'm shocked! Shocked!! (A little late, as
I only read the 'office lobby' editions.)

[gerrylong]

No, No, No. Hillary is a corporate whore. Just like Bill C. We will never have universal health care if the leaders of our country are whores for Big Pharma and Big Ins., who make $ billions from our current system. PROFITS FROM OUR ILLNESS.

The week Bushy Boy was selected by Time Mag as Person of the Year, there were more than 30 full pages of prescription drug ads in Time Mag.

That was a pay-off to Bush and Big Pharma for his putting $50 billion in Big Pharma's pockets in tax breaks.

Wise up. Hillary is GOP-light, and we'll never get out of this mess until we accept the fact that large corporations have more power in the U.S. than the U.S. Congress.

No, no, no to Hillary's plan and her candidacy.

[Doofus]

September 21, 2007
Op-Ed Columnist
Health Care Hopes
By PAUL KRUGMAN

... consider Hillary Clinton’s evolution. Just 15 months ago, The New York Times reported that “her plans to expand coverage are tempered and incremental,” and that “she continues to shy from the ultimate challenge: describing what a comprehensive Democratic health care plan would look like.”

Indeed, when she was asked how costs might be controlled, she demurred: “It depends on what kind of system you’re devising. And that’s still not at all clear to me, what the body politic will bear.”

But that was then.

John Edwards broke the issue of health care reform open in February, when he proposed a smart and serious plan for universal health insurance — and bravely announced his willingness to pay for the plan by letting some of the Bush tax cuts expire. Suddenly, universal health care went from being a distant progressive dream to something you could actually envision happening in the next administration.

Senator Clinton delayed a long time before coming out with her own plan — a delay that created a lot of anxiety among health care reformers, and may, as I’ll explain in a minute, be a bad omen for the future. Still, this week she did deliver a plan, and it’s as strong as the Edwards plan — because unless you get deep into the fine print, the Clinton plan basically is the Edwards plan.

That’s not a criticism; it’s much more important that a politician get health care right than that he or she score points for originality. Senator Clinton may be politically cautious, but she does understand health care economics and she knows a good thing when she sees it.

[Doofus]

The Edwards and Clinton plans as well as the slightly weaker but similar Obama plan achieve universal-­or-near-un­iversal coverage through a well-thought-out combination of insurance regulation, subsidies and public-private competition. These plans may disappoint advocates of a cleaner, simpler single-payer system. But it’s hard to see how Medicare for all could get through Congress any time in the near future, whereas Edwards-type plans offer a reasonable second best that you can actually envision being enacted by a Democratic Congress and signed by a Democratic president just two years from now.

To get there, however, would require overcoming a lot more fear.

There won’t be a serious Republican alternative. The health care plans of the leading Republican candidates, such as they are, are the same old, same old: they principally rely on tax breaks that go mainly to the well-off, but will supposedly conjure up the magic of the market. As Ezra Klein of The American Prospect cruelly but accurately puts it: “The Republican vision is for a world in which the sick and dying get to deduct some of the cost of health insurance that they don’t have — and can’t get — on their taxes.”

... The smear-and-fear campaign has already started. The Democratic plans all bear a strong resemblance to the health care plan that Mitt Romney signed into law as governor of Massachusetts, differing mainly in offering Americans additional choices. But that didn’t stop Mr. Romney from denouncing the Clinton plan as “European-style socialized medicine.” And Fred Thompson claims that the Clinton plan denies choice — which it actually offers in abundance — and relies on “punishment” instead.

These attacks probably won’t be effective enough to prevent a Democrat from winning next year. But that won’t be the end of the story: even if the Democrats take the White House and expand their Congressional majorities, the insurance and drug lobbies will try to bully them into backing down on their campaign promises.

[Doofus]

That’s why the long delay before Senator Clinton announced her health care plan made supporters of universal care, myself included, so nervous — a nervousness that is not completely assuaged by the fact that she finally did deliver. It’s good to know that whoever gets the Democratic nomination will run on a very good health care plan. What remains is the question of whether he or she will have the determination to turn that plan into reality. ...

[sundog58]

Mr. Hacker, I have great respect and totally agree in your assessment in your book "the Great Risk Shift," but in your assessment of Hillary's health care scheme, I think you missed the boat. I think that Hillary's plan wont shift enough "risk" to do the job. It only postpones the inevitable moral system that will make Americans feel that their country is keeping the health care monkey off their back which is Single-Payer Universal Coverage.

Also, I wouldn't describe Paul Krugman's take on Hilliary's plan as "fulsome praise." Krugman's commentary is more like, "It's better than nothing, but not quite there yet." I'm not sure you're reading the same New York Times I've been reading.

[ThomasDoubting]

Unless something changes, we as Americans will have to choose between Hillary Clinton and Rudy Guiliani. (Rudy is the one in the dress) The right wing can't lose. Wouldn't it be more appropriate for Hillary to run in the Republican primary ? If the Democrats nominate someone to run on Democratic principles they will win. If the choice is between Hillary and "Queen Rudy", I will write in Dennis Kucinich, or Ralph Nader,or Mickey Mouse. We have fallen for the lesser of two evils before. I won't get fooled again, it has never worked. We need a choice, not an echo. Lets stop Hillary now. It is still possible to nominate a candidate who will bring us a TRUE, Free, universal, single-payer, not-for-profit health care system, Dennis Kucinich is the one . "Medicare for All" . Very Simple! It's also a lot cheaper.

[schmuckwithearlaps]

Rather than acting like attack dogs for Michael Moore, why don't we sit down and look at Hillary's plan and see what we can all do to make it better. We can't afford to let another ten years go by without a decent plan for universal coverage. Let's take Hillary's ideas, improve it, build a consensus and actually have universal coverage in a couple of years.
OK, it is more fun to attack, but even on this web site, can't we for once take a deep breath and do something constructive?

[kasa5400]

First, it isn't "her" plan. She copied what Edwards proposed several months ago with respect to the fundamentals.

Second, Edwards did amodified version of the Mass. system.

Third, Mass. is in serious trouble with enrollment.

For those who are subsidized there are about 250,000 eligible and 170,000 have enrolled:

Those who are below 150% FPL ($15,000 for 1 person) are enrolling as it is free.

Most of those between 150-200% are enrolling as it is $35 a month/person.

A few of those between 200-250% are enrolling as it is $70 a month/person.

Very few of those between 250-300% are enrolling as it is $106 a month/person.

Above 300%, you are on your own.

They had to exempt individuals with incomes between 300-500% FPL ($50,000), couples with incomes from 300 -600% FPL ($80000), and fmailies of 3 or more between 300-640% FPL ($110000) - the premiums were still to high for themm to afford and they had no subsidies.

About 250,000 of the MA uninsured have incomes over 300% FPL - 7000 have enrolled.

Subsidies have to go further than they do. In MA, there is no rejecting for pre-existing conditions but premiums can be based on age, area of residence and occupation. The plans in the state system have premiums caps as the highest rate for the oldest enrollee can't be more than 2x the lowestfor the youngest adult. A couple over 50 are still looking at $8400 -9000 in premiums WITH a $4000 deductible and a total OOP of $10,000.

[godlessclif]

getting rid of Hillary would make it better!!

[Doofus]

I'd have to say that it doesn't seem like a
good plan, really. It's just (arguably)
better than what we've got otherwise, and a
step toward treating healthcare-for-all as
an entitlement. Subject to further, future
improvement.

Mandatory insurance is a peculiarly capitalist
notion, seemingly designed to ensure that the
rich get richer. Nothing new in that.

We're still waiting to hear WHAT THE PENALTY
WOULD BE for not signing up. Something nasty,
like losing all your farm subsidy payments, maybe?

Oh, and just 485 Days of Glory (& a wakeup) remaining!

[insanityfollows]

You know, I admired Hilary for taking on healthcare as first lady, though at the time (from a power standpoint) it was doomed from the start. She and President Clinton did see the dark cloud on the horizon that is now threatening twister weather. I'm not wild about her new plan, but boy is it ever time for one. Yesterday when I heard that we have spent 3/4 of a TRILLION dollars on the totally unnecessary war in Iraq, the argument that we can't afford a national healthcare system goes right out of the window. We can afford it many times over. The nonsense that you can't get surgery or care in a timely manner is bunk, and that is based on many conversations I have had with friends and citizens of France, Germany, England, etc... The only thing they have to wait for are some elective surgeries, and the only thing they have to pay for are cosmetic procedures. Speaking as someone with serious health issues, and no current insurance, I am having to wait on necessary surgery because of the lack of insurance. Time to immigrate to Canada, y'all.

[godlessclif]

You can see that spin in the anti-single payer propaganda. One ad said a guy had to wait 18 months for a bypass. You were supposed to assume it was a heart bypass.

In fact on investigation, it was a gastrointestinal bypass for a fat guy. Strictly elective.

A heart bypass for a patient whose life was in danger is top priority, such a patient would have received surgery in Canada immediately.

[Jane22]

Hillary


Hillary Clinton has now come forward with her "Never bite the hand that feeds you" Financial Health Care Plan for the future! I've always had a gut feeling that she can not be trusted to be the 1st female president. While Bill was not as offensive as GWB, he really did alot to help the Repugs. i.e. welfare reform, NAFTA, etc. I would not expect his wife to stray too far from his positions. No on Hillary!

[The Collinbrandt]

As long as the United States does not have univrsal health care, why would anyone want to do business in this country. Employers will have to pay for individual health care coverage either with a group health care program or, employers will be forced to greatly increase labor costs via pay increases. These pay increases will be needed so that individuals can purchase their own health care or pay out of pocket health expences. Meanwhile, poorly regulated health insurance and drug companies will continue increasing cost which will be detrimental to the U.S economy. Americans have much more to fear from their own health care crisis than they will ever have from Bin-Laden. Tens of Millions more will die because of our poor health care system.

[godlessclif]

18,000 people die every year because of our capitalist health system. More Americans than have died in 9/11 and the Iraq war combined.

[pmfelipe]

We should stop promoting a health insurance plan as a bridge to a single payer health care plan. They always say that single payer plan will not pass. The reason is because we continue to elect candidates who capitulate to the corporations who now runs this country. If you really want real change we should elect those candidates who truly support the will of the people not those who are simply democrats eventhough they are subservient to their corporate masters.

Among the Presidential candidate their is only one who represents true change like peace in the middle east and single payer health insurance and that is Dennis Kucinich. However you can see that the leadership of the party and the pundits who are subservient to the corporations are trying to marginalize the guy.Now they even exclude him from forums just like the one in Iowa because they are scared that his message will reach the voters.

His message of peace and single payer is the only one that will work because without peace there is no money for single payer. War with the health insurance plan will just cost this country more money without accomplishing anything.

[viflyer]

Of course we need a single payer plan. That's why we will never get it.

[OETKB]

Again Sen Clinton shows herself to be a follower rather than a leader. She has taken a distillation from the other candidates and then slighly modified the status quo. The only real choice we need is available health care and the ability to choose who provides that care under reasonable rules. No health insurance company is in the business of providing this and in addition tack on the cost of maintaining it so. We need a non political solution that addresses the problem just as the rest of the so called civilized world has done. We do not need to repeat their mistakes but can put in place what works. This plan is not bold or even close to bringing affordable more rational care to the whole population.

[jazzman]

What we have here is a slight of hand. Hillary, Ahnold, and Romney are offering universal health insurance not universal health care.

You don't need health insurance to provide a universal system of health care. If Hillary was serious about this she would be advocating the elimination of the health insurance industry and an implementation of a low overhead, service oriented, health care system. This isn't going to happen with Hillary or any other politician, Democrat or Republican. Hillary is a faux reformer just like Romney was in Massachusetts. Her proposals are smoke and mirrors that dance around the real issue of the high cost of health care and the plight of the underinsured as well as the uninsured. In reality, she's owned by the health insurance and drug industry. Don't expect change in this country under the present cost driven election system.