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Why Not Single Payer? Part 4. In Partial Defense of Obama Against Clinton's Attacks on His Health Care Plan

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In this ongoing multipart Huffpo series entitled "Why Not Single Payer?" I've written extensively about why Single Payer/Medicare For All represents both better social policy and better political strategy than the healthcare plans advanced by the leading Democratic candidates, including both Hillary Clinton and Barack Obama (whom I enthusiastically support for numerous reasons other than his Healthcare plan. Among these is Obama's ability to encourage popular movements which could push change beyond his own campaign proposals.).

However, as a single payer advocate, I find Obama's healthcare plan to be politically superior, and certainly more honest, than Clinton's.

First, let's be clear on one thing: Despite the rhetoric, neither Clinton's nor Obama's plan guarantees Universal Health Care for all Americans. Hillary is being less than candid when she proclaims "My opponent will not commit to Universal Healthcare. I do not believe we should nominate any Democrat who will not explicitly support universal health insurance."

Hillary is using a deceptive rhetorical slight of hand. "Universal health insurance," which is at the heart of Clinton's plan, is not the same as "Universal Healthcare" which can only be guaranteed by a single payer system under which all Americans are automatically covered for all medical care by a single, taxpayer funded, not for profit health insurer from birth until death. (Even one of Hillary's top health care advisors, MIT Prof. Jonathan Gruber acknowledges that Clinton's plan will not include everybody, admitting that "Any system that does not have a single payer will not have 100% coverage".)

Clinton's "Universal health insurance" is a plan under which, if your employer doesn't provide health insurance or you don't have a job, the government mandates that you must buy health insurance out of your own pocket. If your income is less than a certain level (which level Hillary's plan glaringly does not specify) you will retroactively receive a tax refund or tax credit, on a sliding scale, after April 15th of the following year to reimburse you for part of the premium which you already laid out in the prior year. If you fail to buy your own health insurance, the federal government will penalize you.

Again, glaringly, Clinton's plan does not spell out what the penalties will be. It should be noted, however, that if the penalties are small, the plan will not be Universal because many people will take the penalty, rather than pay thousands of dollars in insurance premiums that they cannot afford. That's what is happening in Massachusetts under the Romney plan on which Hillary is modeling her plan. If the penalties are large -- for example, if the government can garnishee your wages, keep your tax refund, or charge you a large fine -- many middle class people who make too much to receive subsidies but too little to afford the premiums will see their standard of living go down.

While, notably, Clinton has not specified an enforcement mechanism in her plan, on Sunday she stated that "I think there are a number of mechanisms" [for enforcing a mandate, including] "going after people's wages". Clinton plan punishes the uninsured middle class which makes too much money to qualify for a tax subsidy but too little to afford a meaningful insurance policy which averages $5,000 for an individual and $12,000 for a family of four.

Obama responds, "It's not that people don't want health care, it's that can't they can't afford it". Unless and until health insurance costs come down to a level that everyone can afford, Obama would not punish people for not buying insurance.

Obama circulated a mailer last week which criticized Hillary's plan, showing a photo of a couple sitting at a kitchen table, stating truthfully "Hillary's health care plan forces everyone to buy insurance, even if you can't afford it". In response, the Clinton campaign convened a conference call of health care policy advisors to denounce the mailer. One of the advisors, Len Nichols, denounced the leaflet and photo, stating, "It is as outrageous as having Nazis march through Skokie, Illinois. I just find it disgusting that this kind of imagery is being used to attack the only way to get to universal coverage."* (The Clinton campaign and Nichols later apologized for the remark.)

In fact, Obama's mailer demonstrated why Clinton's individual mandate plan is a political loser for Democrats. If Clinton's campaign freaks out so badly at relatively mild criticism from Obama, imagine what it will face from Republicans if Hillary is the nominee in the fall. Already, the Republican National Committee put out a press release saying "Hillary Clinton wants to garnishee your wages". Here's what the Republicans will be saying in the fall: "If you're an uninsured family making over $40-$50,000 a year so you aren't poor enough for subsidies but can't afford insurance, Hillary will garnishee thousands of dollars of your wages since the average policy for a family of 4 is around $12,000." That should be enough to scare off millions of middle class families earning less than $100,000, and make them think twice about voting for a Democrat.

The growing failure of Romney's Massachusetts plan will give ample evidence to back these Republican charges. In Massachusetts, premiums are subsidized for people earning up to 3 times the poverty level (i.e. up to $30,630 for individuals and $41,880). If you make more than that, you have to pay the full cost of insurance, which ranges from $1464 a year for young adults to $9600 a year for those over 55. At those prices, it's no surprise that only 7% of the 244,000 uninsured Massachusetts citizens who are mandated to buy unsubsidized insurance had signed up by last Dec. 1, although fines for each uninsured individual will be $2,000 in 2008.

So Obama is right to criticize Clinton for putting forward a plan that would penalize the uninsured middle class, unless and until the cost can be brought down to an affordable level. Hillary's plan is morally wrong, and it's a political loser.

Obama's plan is in most other ways similar to Clinton's. Both plans would prevent insurance companies from denying coverage based on pre-existing conditions, provide community rating under which risk is shared by limiting the premium difference between the healthy and less healthy and the young and old, and provide subsidies for the less well off to buy insurance. They also both provide for a public plan to compete with private insurance. If enacted by Congress (absent the mandate), these plans will help millions of people obtain health insurance who don't now have it. Obama's plan has an additional provision that will lower premiums more than Clinton's plan would. 80% of health care costs cover the care for the sickest 20% of the population. Obama's plan provides for the Federal government to reimburse insurers for part of the cost of catastrophic care if they use that reimbursement to lower premiums.

Nevertheless, neither Obama's nor Clinton's plan will provide truly Universal Healthcare for all Americans. At a cost of a little more than $100 billion a year each, financed largely through letting Bush's tax cuts for the wealthy lapse, neither plan can make health insurance affordable for all Americans. That can only be done through a single payer/Medicare For All plan which would save approximately $350-$400 billion dollars a year by eliminating the nearly 1/3 of health care costs that go to paying the overhead, advertising, executive salaries, and profits of private health insurers, and the cost of employees in Doctor's offices and hospitals required to process claims from multiple insurers (as opposed to 3%-4% overhead for Medicare.)

That's why I still find it disappointing that Obama -- who has a sophisticated understanding of the single payer concept -- did not have the political courage to join the 78 Congressional co-sponsors of HR 676, the Medicare For All bill introduced in Congress by Rep. John Conyers. But unlike Clinton, at least Obama is not hostile to single payer. In the South Carolina debate, Clinton angrily accused Obama of having once been a supporter of single payer, as though he had once been a Communist. Obama responded that if he were designing a health care system from scratch, he would support single payer, but that since many people are happy with their current health insurance, he thought it was better for the time being to build on the present system. I disagree with Obama. The present system of employer-based health insurance is collapsing under its own weight and an attempt to build on this shaky foundation will also collapse, if not right away, then within a few years.

Despite Obama's political calculation to the contrary, the combination of a President with Obama's extraordinary leadership skills and a budding mass movement already supporting HR 676 (which includes over 235 union organizations in 40 states, including 60 Central Labor Councils, as well as many citizens and religious organizations) the American people can be convinced to support Medicare For All. A CBS News poll in September asked "Which do you think would be better for the country: Having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, or keeping the current system where many people get their insurance from private employers and some have no insurance?" 55% chose "One Program For All" and 29% chose the "Current System".

If Obama is elected President, there will be a strong and serious mass movement supporting HR 676. A President Obama is less likely to meet such a movement with hostility than would a President Clinton. Morever, if Obama manages to pass something resembling his plan, when it fails to provide Universal Healthcare, and when increasing numbers of employers drop or reduce their health benefits within a few years, it is conceivable that Obama could support an evolution towards a single payer system in his second term.

Moreover, in California, a similar coalition just defeated an individual mandate plan proposed by Gov. Schwarzenneger and the Democratic Speaker of the California Assembly with only a single State Senator supporting the bill in Committee. In contrast, a year ago both houses of the California Legislator passed SB 840 which would have created a single payer system for the state's 37 million citizens, had it not been vetoed by Gov. Schwarzenneger. If California gets a Democratic Governor in 2010, it could be the first state to enact single payer healthcare on a state level. To succeed, it will need a series of waivers from the Federal government and the ability to use Federal healthcare funds towards the cost of the State system. Whatever the fate of Obama's national plan, it is unlikely that a President Obama would try to block a state from experimenting with its own single payer system which, if successful, could provide the model for the rest of the country. (Canada's single payer system started first in the Province of Saskatchewan under a Conservative government, before expanding to cover the entire country.)

So, as a supporter of single payer/Medicare For All, I find it disappointing that Obama did not have the audacity to support single payer. Nevertheless, his program is better than Hillary's coercive individual mandate plan. It will certainly be easier to run on against the Republicans in the fall, and to potentially gain enough popular support to get through Congress without too many crippling compromises. Maybe I'm being naïve, but, in the long-run, the fact that Obama understands single payer and is not hostile to it as a concept, gives me hope that we might get there, or close to there, over the course of an 8 year Obama Presidency.

For that to happen, it will take a mass movement in support of single payer health. Obama speaks eloquently of the fact that real social change is hard and starts from the bottom up through organized movements, not from the top down from a government that institutionalizes fundamental social change only when forced to from below. A mass movement for single payer healthcare has already begun to take shape. My hope is that an Obama Presidency will help give it the space to flourish, and to push Universal Healthcare beyond the bounds of Obama's more modest proposals.

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*Nichols is head of the Health Policy Program of the New America Foundation, which helped advise Romney, Schwarzennegger and Clinton on their health plans. His predecessor at NAM was Laurie Rubiner, a former aide to Bob Dole who was assigned by Dole in 2003 to devise a competing plan to Hillary Clinton's first health reform plan. She developed the idea of individual mandates, which had roots in conservative economist Milton Friedman, Richard Nixon's attempts to counter Democratic efforts to enact single payer, and the conservative Heritage Foundation. After leaving her Senate posts, she went to NAM where she further developed the individual mandate idea and helped lay the basis for Romney's Massachusetts plan. In 2005, Rubiner became Hillary Clinton's legislative director (a post she just left) where she was instrumental in developing Hillary's individual mandate plan. In the next installment of this "Why Not Single Payer?" Huffpo series, I will trace the history of individual mandates as a conservative Republican idea that has ironically been adopted by leading Democrats, including Hillary Clinton.

You can find previous parts of the "Why Not Single Payer" series at:
Part 1
Part 2
Part 3