View from Washington: Surveying the Field

A look at Democratic Presidential Candidate Hillary Clinton’s healthcare reform proposals.

With the presidential primary election approaching, it may be useful to examine what the leading contenders have to say about healthcare. This article will examine the reform proposals of a leading Democratic candidate — Senator Hillary Rodham Clinton. In the next edition of View From Washington, we will look at the proposals of a leading Republican candidate.

Comparison between Senator Hillary Clinton and that of her husband, President Bill Clinton are inevitable. This comparison is appropriate because of the Senator’s key role as First Lady in the largest domestic policy disaster of President Clinton’s first term, often derisively referred to as “Hillary Care.” It was clear that the issue of healthcare reform would have to wait to be addressed another day.

Enter 2007, and the focus of healthcare reform has become “quality of care, cost containment and universal coverage.” Clinton’s reform proposal would entail regulations for insurance companies, tax reforms, payroll and income caps on the amount employers and employees must fork over for insurance, and, interestingly, “use of existing institutions.” It calls for the establishment of a new public insurance plan similar to, and possibly run by, Medicare and other existing federal programs. Additionally, she plans to regulate insurance companies by establishing new regulations related to such things as “automatic renewal,” “strong rating protections,” and “guaranteed issue.” As Medicare and other federal programs would run the new program, there would be little need for substantial additions to the federal bureaucracy. This minimization of bureaucracy is vastly different from the “managed competition” legislation that emerged in 1993.

Candidate Clinton proposes reaching universal coverage by “requiring all Americans to purchase it.” The plan claims that tax incentives and reduction in the cost of care will make purchasing health insurance more attractive. Federal money will flow to employers to offset their costs of retiree health expenses as the employers will be required to move their covered retirees into more efficient health plans. Small businesses will get tax credits. All this gets paid for in part by “greater efficiency” in healthcare delivery and reduction of tax breaks for the highest income earners. Major funding for these initiatives will come from an expansion of the Medicaid program along with the State Children’s Health Insurance Program (SCHIP). The plan also envisions tax-credits to families computed so that health insurance premiums do not exceed a to-be-specified portion of income.

Hillary Clinton’s health plan of 2007 differs from the 1993 legislation in a few ways. One, it allows states to opt out if they can create a program that meets federal standards. Second, she plans to use the mechanisms in place at Medicare and SCHIP instead of creating a whole new bureaucracy. Third, it does not have the cooperatives that were major features over a decade ago.

But no amount of campaign lipstick can change the similarities of the 1993 and 2007 plans. Tax credits for small businesses are there and will likely face the same economic backlash they did before. The Clinton plan of 2007 will likely call for a massive build-up of federal personnel to administer the new and improved “Hillary Care.” The new proposal for healthcare logically would imply that states will be required to pick up more costs for their citizens.

Clearly, Hillary Clinton learned from the crash and burn of her healthcare initiative in 1993. Nevertheless, the existing similarities between her proposals may mean her new plan can be expected to fail should she become president and pursue these policies. However, since 1993, the popular and reasonably effective SCHIP has been operationalized. Medicaid has seen many positive operational reforms. Both of these programs could be building blocks for a new national program. Plus, healthcare is eating the American economy right now, and the calls for systemic reform currently come from all political corners.

Robert Betz Ph.D. About Robert Betz Ph.D.

Robert Betz, Ph.D., is president of Robert Betz Associates, Inc. (RBA), a well-established federal health policy consulting firm located in the Washington, D.C. area. Additionally, Dr. Betz is an adjunct professor teaching at The George Washington University where he specializes in political science and health policy. For more information about RBA, visit www.robertbetz.com.

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