A universal health care politics primer

Parent Cafe
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<p>It is clear that universal health care plans in general, and Hillary Clinton’s universal health care plan specifically, will be major narratives in the 2008 election and beyond. In trying to gain a little background knowledge on the subject, I ran across two recent articles by Paul Starr, a Professor of Sociology and Public Policy at Princeton. </p>

<p>Starr seems be in a unique position to provide insight. He was in the small circle of health care experts who worked with Ira Magaziner and Bill Clinton and Hillary Clinton in the White House on the 1993 health care plan. He had a ring-side seat as a key participant. Conversely, he says that he hasn’t talked to Hillary Clinton since she was elected to the Senate in 2000 and is not involved in her Presidential campaign. Although he’s not an impartial observer, he is an outside observer at this point. He understands the health care system and the politics. He writes from the perspective that, while a singer-payer government system may be the most efficient, it is a political non-starter, so Kucinich fans will probably view him as a having been bought and paid for by “special interests” and “evil corporations” or whatever…</p>

<p>The first article is Starr’s account of the 1993 process and the false mythology that was created surrounding Hillary’s role:</p>

<p>The Hillarycare Mythology
<a href=“http://prospect.org/cs/articles?article=the_hillarycare_mythology[/url]”>http://prospect.org/cs/articles?article=the_hillarycare_mythology&lt;/a&gt;&lt;/p&gt;

<p>The second article is a brand new analysis from Starr about Clinton’s new health care proposal:</p>

<p>Hillary’s Own Plan
<a href=“http://prospect.org/cs/articles?article=hillarys_own_plan[/url]”>http://prospect.org/cs/articles?article=hillarys_own_plan&lt;/a&gt;&lt;/p&gt;

<p>Reading the two articles in chronological order provides considerable insight into the politics of health care reform.</p>

<p>Just to get you started with enough background, the broad outlines of Hillary’s new plan are that consumers (and businesses) will have three choices:</p>

<p>a) Keep the private insurance plan they currently have or any other private insurance plan they care to purchase in the open market</p>

<p>b) Choose one of the many private insurance plans (Blue Cross, PPOs, HMOs) offered by the Federal Employees Benefits Program (popularly referred to as “the same plan your member of Congress has”).</p>

<p>c) Choose a new government health insurance plan modelled after Medicare, intended to offer the same benefits as the average plan in b) above. This will be insurance purchased by businesses or individual and paid for by premiums paid into the federal insurance plan subject to the same offsetting tax credits as a) and b) above. This plan will “negotiate” fees to health care providers just as Medicare does (and may, in fact, use the same fee structure).</p>

<p>The only employer mandate for coverage will apply to large businesses, 99% of which already provide health insurance (to keep these businesses from dropping their benefits).</p>

<p>There will be individual mandates that require citizens to buy health insurance. The goal here is to drive low-risk consumers into the system to offset new rules that prohibit insurance companies from charging exhorbitant prices to high risk consumers. Thus, insurance companies will lose some revenue from older consumers, but gain revenue from 47 million new customers, many of whom are low risk. Much of the cost savings of the plan centers around the very large insurance pools in options b) and c) above. In both cases, the government has considerable buying power which addresses the horrible administrative costs of individual and small-group plans.</p>

<p>A system of sliding tax credits for small business and individuals will cap the cost of purchased health insurance to a percentage of income (for individuals) or a percentage of payroll (for businesses). Tax credits and/or tax deductions will apply to the cost of an average plan. Any consumer who wishes to buy fancier coverage can do so, although high income individuals will have to buy the extras with after-tax dollars.</p>

<p>That basic outline of Clinton’s plan should be a sufficient starting point for Starr’s second article, in which he discusses the politics of passing Clinton’s plan along with its strengths and weaknesses.</p>

<p>Enjoy.</p>

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<p>Er, “Hillary’s” plan is just a carbon copy of Edwards’ plan put out last February – what took her so long?</p>

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<p>I can tell you didn’t read the links.</p>

<p>Edwards plan is actually more similar to the Clinton 1993 plan in that it sets up regional health care pools and employer mandates that require businesses to either pay or play. These were the two fundamental cornerstones of the 1993 plan.</p>

<p>Clinton has chosen not to do the regional health care pools, instead taking a much simpler approach – making the existing Federal Employees Benefits Program available to all. It’s already in place, it’s a well run program, and you don’t have to spend five years trying to organize the states into collectives to start the new pools. Employer mandates are gone from her new proposal because it’s instant death in term of support from the business community. Without support from the business community, you can’t pass universal health care.</p>

<p>Seriously, it is just absurd to say that Clinton is copying Edwards on anything health care related. She was a hard core policy expert wonk on heath care when he was still chasing ambulances back in North Carolina.</p>

<p>There are some similarities in their plan outlines. There have to be. There aren’t that many ways to get to universal health care coverage, especially if you take single-payer off the table.</p>

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<p>Thanks! Good articles.</p>

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<p>FWIW, I was a federal employee for years, and I thought my PPO coverage was top notch – even better than what I had when I worked for a wealthy private company.</p>

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<p>Here are some links to the Federal Employee Health Benefits plan:</p>

<p><a href=“http://www.opm.gov/insure/health/about/fehb.asp[/url]”>http://www.opm.gov/insure/health/about/fehb.asp&lt;/a&gt;
<a href=“Health Plans”>Health Plans;

<p>It’s basically the government employee’s version of the kind of menu of plans many large employers offer – Blue Cross (high or low deductable), or PPOs, or HMOs offered to employees in every state.</p>

<p>Opening this up to all citizens is a really quick, efficient way to offer large-pool buying options to everyone. This quickly solves the problems of small businesses and individuals who get killed on health cost by not having large pool coverage available in the private insurance market. The good thing is that the government infrastructure to administer these plans (and allow private insurance companies to bid for these large customer bases) is already in place. One of the flaws in the 1993 Clinton plan is that it set up regional pools from scratch to accomplish this same thing. </p>

<p>Clinton’s current plan allows for states or groups of states to set up alternatives to the Federal Employees Health Benefits organization if they want to, but there is no urgency for them to do that before implementing the overall plan.</p>

<p>One of the key differences is that Edwards plan borrows the regional buying pools from the 1993 Clinton plan instead of using the existing Federal Employees structure, so it requires significantly more in term of new government bureaucracies.</p>

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<p>Interesteddad: Thanks for the links! I have a question that I can’t find answered in those articles or anything else I’ve read so far. The question has to do with choice. If an employee of a business/organization receives health coverage through the employer, can they opt out if they don’t like the choices offered by the employer and prefer the FEHBP. One of my big beefs with the current system (which may seem like whining because SO MANY people have no coverage at all) is that employers make choices of what they will offer to their employees based on $$$ - and some of the choices are lousy. Also, from year to year, employers change their offerings resulting in employees having to change doctors etc. If we are going to place value on REAL CHOICE - will employees continue to be at the mercy of their employer’s choices, or will they have other options? Thanks for any info you have!</p>

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<p>Papabear:</p>

<p>I think the simple answer is “yes”. You could choose to opt out of your employer system and buy your own health care. </p>

<p>HOWEVER…</p>

<p>I don’t think the simple answer tells us much. Clearly, the dynamics of the health insurance business will change in profound ways. For example, your employer may have crappy plans because the company is not big enough to have sufficient buying power. I don’t think businesses intentionally set out with a goal of offering only crappy health care plans! So it is very possible that the company will simply switch its menu of choices to the FEHBP plans. </p>

<p>More importantly, the price structure of insurance will change. No more superhigh cost for high-risk insurees and super low cost for low-risk insurees. Theoretically, everyone will pay somewhere in the middle, based on the averages over very large pools. </p>

<p>The second link I provided discusses some of the intended, and likely unintended, ways that the new competitive playing field could impact business and consumer choices.</p>

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<p>Single payer system will not come about until the Boomers reach 67 or another 5 years. Hillary should hold her piece and it will come about. In 10 years what ever resistance against a national health policy, will fully collapse. </p>

<p>Our problem is not how to pay, but who to hire to provide the care. Hispanics will be a major source. Like it or not.</p>

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<p>What’s that got to do with anything? Are you being anti-Hispanic in this quote? Please explain what you mean.</p>