Politics & Policy

Dr. Hillary Will See You Now

The new HillaryCare.

Senator Hillary Clinton unveiled her presidential health-care plan on Monday. National Review Online asked a group of experts to assess how bad it is!

Michael F. Cannon

Hillary Clinton says she has learned the lessons HillaryCare I. Judging by HillaryCare II, she still prefers the perverse incentives of collectivism over the virtuous incentives of the market. All she learned was that she wasn’t sneaky enough the first time around.

Rather than herd consumers into regional insurance pools (where Washington calls the shots), Clinton would let consumers stay right where they are (and have Washington call the shots) or join a national purchasing pool (where Washington calls the shots).

You may recognize that idea as the one that put President Kerry in the White House. Ditto President Lieberman. And President Clark. And even President Dean.

Clinton would require that all employers offer coverage, that all residents buy it, and that Washington dictate its price and content. She would levy higher income taxes on the wealthy, and hidden taxes on everyone.

She would open Medicare to the near-elderly, the State Children’s Health Insurance Program to nearly all children, and the Federal Employees’ Health Benefits Plan to nearly everyone. Should anyone be left behind, she would turn the private sector into a de facto government program.

Clinton still equates reform with less freedom. The freedom to choose whether to purchase health insurance? Gone. The freedom to purchase the insurance you want? Gone. The freedom to run a competitive business? To hold on to your earnings? To make your own health care decisions? Gone, gone, gone.

Yet so many elements of HillaryCare II enjoy a Republican pedigree that Clinton can portray it as moderate. Mitt Romney’s Massachusetts reforms included a government purchasing pool (the “connector“) as well as individual and employer mandates. SCHIP is the child of Orrin Hatch. Arnold Schwarzenegger endorses employer mandates and price controls.

Unfortunately, those contributions to the Clinton campaign will not appear in any FEC reports.

Michael F. Cannon is director of health-policy studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It, second edition (forthcoming).

James Capretta

Senator Clinton would require Americans to have health insurance, and she would provide expensive new government subsidies to help households pay the premiums.

But what would she do to slow health-care cost inflation? Not much, it seems. Her answers (for now) — better health-information technology, more disease management, prevention initiatives — are politically safe but unlikely to put a significant dent in costs.

Premiums will therefore continue to rise faster than household income, leaving her with three options: higher premiums for consumers, more spending on subsidies by the government, or government-imposed cost controls on insurers. Does anyone doubt a Clinton administration would eventually choose to impose limits on premiums to spare consumers and the government the added cost? That’s when her plan becomes government-run health care.

Moving to a functional, market-based health-care system requires complete reform of the tax treatment of health care, as most Republicans now recognize. It also requires fixing the Medicare and Medicaid entitlements to encourage price competition rather than ever higher use of services.

Senator Clinton’s plan does none of this (save for a token limit on upper income tax subsidies). Like 1993, she would inevitably turn to the government to control costs.

– James C. Capretta, a fellow at the Ethics and Public Policy Center, was an associate director at the Office of Management and Budget from 2001 to 2004.

John C. Goodman

Think about every bad health-care idea that has been proposed over the last couple of decades: individual health-insurance mandates, employer health-insurance mandates, expansion of Medicaid, expansion of S-CHIP, creating Medicare for non-seniors, allowing outsiders access to the federal employees’ health system, creating new tax subsidies, imposing limits on old tax subsidies, forcing insurers to take all applicants, no matter how sick, etc. Now imagine all of these ideas wrapped into one proposal. That’s Hillary’s latest health care effort in a nutshell.

In one fell swoop she has cut the Gordian knot of health-care reform. The problem, especially for a Democratic presidential candidate, is: No matter what you propose, a significant number of the party faithful are not going to like it. The obvious solution: Propose everything!

Further, there is all pleasure and no pain in this grab bag of proposals. No one has to make any difficult choices between health care and other uses of money. There is no rationing. No managed care. Everyone will have access to all that medical science has to offer.

How should we respond to all of this? The right response to Hillary is to reject her love affair with bureaucratic institutions and focus instead on the value of empowering patients and doctors and creating a real market for medical care.

– John C. Goodman is president of the National Center for Policy Analysis.

Dr. David Gratzer

Last time, First Lady Hillary Clinton put together a plan so complex that even her supporters didn’t really understand it. There were the flow charts, the endless documents, the details that touched on everything including the funding of academic hospitals in upstate New York. Thirteen years ago, her Big Health-Care Idea collapsed, not with a bang but a whimper, the Senate adjourning without even a vote.

Jump ahead to yesterday’s announcement and Senator Hillary Clinton has learned her lesson well: the speech was heavy on soaring rhetoric and largely absent of detail.

Her sales pitch has improved; her faith in government remains the same.

The cornerstone idea: Make employers buy insurance for their employees. From a distance, it doesn’t sound unfair — but it probably would do little, except lead to more outsourcing, part-time jobs, and contracting out. That, after all, is the experience of Hawaii, whose mandate is more than three decades old, and whose uninsurance rate tops that of several states.

The other ideas? Expand government programs like SCHIP and Medicaid; regulate insurance companies more; push individuals to buy insurance; undo the Bush tax cuts. The end result is a Washington that insures more people and dictates the terms of the insurance of everybody else, and costs too much. Call it HillaryCare on the installment plan.

Dr. David Gratzer, a physician, is a senior fellow at the Manhattan Institute. His most recent book is The Cure: How Capitalism Can Save American Health Care. He advises the Giuliani campaign.

Robert E. Moffit

Senator Hillary Clinton (D., N.Y.) has unveiled a fairly comprehensive health proposal that differs in key respects from her 1993-model. The new proposal covers a vast amount of territory: health-insurance options for employers, employees and the uninsured; new national rules for health insurance; new mandates on employers as well as individuals; new financing arrangements, and promised savings from a variety of measures, including targeted cuts to private health plans in Medicare and government drug pricing. Each one of these items could fill out a health policy briefing book a foot thick, and at some point those three-ringed volumes will appear.

It will be some time, though, before the details — and the devils lurking within them — will emerge. While the outline is certainly different from the earlier model, one detects similar themes:

‐ The financing relies on targeted Medicare reduction, employer mandates and, of course, “revenue enhancements” that will come with the promised end of the hated Bush tax cuts. It is unclear just how many times Washington can expect to repeal the Bush tax cuts.

‐ The plan would further the centralize Washington’s control over health-care delivery, including detailed federal regulation of the health insurance markets,

‐ Government is expected to trump competition when it comes to eliminating economic inefficiencies. The plan seems to envision a brainy bunch of experts gathering anew in the West Wing or HHS to hammer out all the fine points of arcane insurance regulations–including complex underwriting rules and the right “stop–loss” ratios–that will produce health policy Nirvana: “the provision of high quality care, not excessive profits and marketing.”

That old-fashioned central planning is objectionable on philosophical and practical grounds. Moreover, Senator Clinton’s timing is wrong. Insurance markets differ radically in the states, and innovative state leaders are experimenting with different insurance rules for expanding both consumer choice and competition. Washington did not know best in 1993, and it still doesn’t.

– Robert E. Moffit is director of the Center for Health Policy Studies at the Heritage Foundation.

Sally C. Pipes

A health-care plan based on individual and employer mandates, new regulation, increased taxes, and wishful thinking may be acceptable if Hillary were running for governor of Massachusetts or a member of the California legislature. It’s not acceptable for a leading presidential candidate.

Like the 1993 fiasco, Hillary’s current scheme would explode government spending, bolster bureaucratic regulation, and push people into government-run insurance. The promises of cost control are hollow. The tax hikes will be real. Individual mandates will only serve to create a political constituency to further regulate insurers, control prices, and ultimately shift costs in less observable ways through general taxation and massive enrollment in Medicare and Medicaid-like government plans.

The challenge with Hillary’s new proposal, which is the challenge with each of the Democrats proposals, is how deftly they take from ideas that in some form have been blessed by leading Republicans and right of center thinkers while twisting them in pursuit of taxpayer-funded universal health care.

The Federal Employee Health Benefit Program (FEHB) has at times been held up by some conservatives as a model for market-based reforms. Hillary makes it a centerpiece of her plan, while adding a newly created public program that is surely the vehicle of choice.

Free marketers advocate allowing people the right to cross state lines to purchase insurance. Hillary calls for federal regulation to enforce one-size-fits all guaranteed issue from coast to coast.

Limiting the tax deduction to a fixed amount is a sensible reform if implemented properly. Hillary wants to limit it and then take it away from high-earners, so as to increase taxes and redistribution.

Some conservatives have supported individual mandates on the idea that . . . well I’ll let them explain themselves. Hillary endorses it, along with its cousin the employer mandate. The former will be nearly impossible to enforce, the latter will prove to be a new source of revenue for the government.

Hillary’s health-care song remains pretty much the same as her last performance. This time, however, she is unlikely to provide the sheet music to allow critics to analyze the disharmony. Nevertheless, Piece by piece, its contradictions will be exposed.

Sally C. Pipes is president and CEO of the Pacific Research Institute. She is the author of Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer. Pipes advises the Giuliani campaign.

Pat Toomey

HillaryCare2 shouldn’t come as a surprise to anyone (except Bruce Bartlett who has deluded himself into thinking that Hillary Clinton is the second coming of Ronald Reagan), and it’s as bad as it sounds: A national mandate; new national regulations on top of onerous state regulations that require some insurance policies to cover chiropractors and athletic trainers (thanks to the Arkansas legislature); tax hikes; and the inevitable decrease in competition, choice, and freedom.

To be sure, it could be worse. Hillary stopped short of calling for a single-payer government-controlled system, but has indicated that any hesitancy is merely practical not ideological. When asked in April why she saw private insurance as the solution to healthcare rather than a single-payer national system, Hillary responded: “Well, I didn’t say that.” I guess, that’s what we have to look forward to.

Perhaps, the best way to sum up HillaryCare the Sequel is not with words but with music. I refer you to an old Soviet favorite.

In the victory of the immortal ideas of Communism

We see the future of our country,

And to the Red banner of our glorious Fatherland

We shall always be selflessly loyal

– Pat Toomey is president of the Club for Growth.

Grace-Marie Turner

Sen. Clinton’s new health-reform plan incorporates many of the ideas being explored by the states today, and like the plan Mrs. Clinton offered 14 years ago, it still involves a heavy dose of government control.

She would achieve universal health coverage by requiring everyone in America to have health insurance, and she would require businesses to pay a significant share of the costs. This “individual mandate” inevitably means that government would decide what kind of health insurance we must have, what must be covered, and what penalties we will face if we don’t comply.

I am pleased to see that she would offer tax credits as a way of helping those at the lower end of the income scale afford coverage and that she would encourage prevention and better management of those with chronic illnesses. But the plan provides countless opportunities for government micro-management of the health sector with huge new bureaucracies to run it and new taxes on individuals and businesses to pay for it. Further, her plan would regulate health insurers until they become little more than government-managed utilities, quashing competition and innovation.

Instead, the United States could be a leader in developing health insurance that is better suited to a mobile 21st century workforce and to meeting the demands of information-savvy consumers. Changes in tax law would allow health insurance to be portable and more affordable. Allowing greater, not less, competition in the health insurance industry would lead to more affordable premiums. And giving consumers a greater incentive to shop for value would put power in the hands of doctors and patients, not all-knowing government bureaucracies. Market oriented reforms, coupled with assistance for those at the lower-end of the economic scale, would be a far better solution.

– Grace-Marie Turner is president of the Galen Institute.

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