Both Clinton and Obama have embraced providing “affordable,” quality health insurance for all Americans and offered ambitious proposals to expand coverage. While there are many similarities between their plans, a flash point has been mandates. Obama would mandate coverage only for children and make it voluntary for everyone else. Clinton would mandate coverage for all. Debate has gotten pretty intense at times, but how much do these differences really matter? Is this just a doctrinal spat or a real policy divide? My sense is some of both.
Pragmatically, with 47 million uninsured and counting, both plans offer to substantially increase coverage. The Clinton camp cites estimates that Obama’s plan would leave around 15 million people uncovered, equal to about two fifths of the number of uninsured adults in 2006. How much better would Clinton’s plan do? A lot hinges on enforcement. As of this writing (3/28/08), specifics are still lacking, but if enforcement of comprehensive mandates under Clinton’s plan is weak and/or there are waivers for low income people like those in Massachusetts, the outcomes might not be so different. A further argument by Clinton is that universal coverage is critical in order to coordinate cost control efforts. However, her plan (as well as Obama’s) would keep in place our current fragmented system of coverage. People would continue to be covered variously by private insurance, Medicare, Medicaid and an assortment of other public programs. Retaining this fragmented system seems a much bigger obstacle to coordinating incentives and improving effectiveness than having a limited number of people uninsured.
An underlying philosophical issue is the value of universal coverage. Clinton describes it as a moral imperative. Obama focuses on access to “affordable” coverage. While he concedes that even at affordable rates, not all consumers may take up insurance, he questions imposing coverage on people who don’t want it. Clinton counters that people who choose not to take up insurance impose burdens on everyone else through uncompensated care and are “free riding.” In particular, Clinton cites healthy, young people who may elect to opt out and spend money on other things. It is not clear how great the financial burden would be in this case given this group’s costs are likely to be low, but the option of opting out poses general issues for risk pooling. Beyond this, intrinsic in Obama’s proposals is the issue of underlying commitment; it seems much easier to waffle on a policy that accepts that there may be gaps in coverage by “choice” than one that sets covering 100% of the population as the goal.
I thought I was the one who said that an uninsured person is a free-rider in the making. Should a health catastrophe strikes even the uninsured will seek out the best care possible. Some will pay their bills (or enough to cover their providers’ costs) but many others will shirk their financial responsibilities.
But I would hate it if you thought I was providing the economic backbone for Clinton’s proposal. So what is wrong with Clinton-care Act II? First, there is her claim that the insured already pa for the costs of the uninsured. The research cited by Clinton to support this claim is hopelessly out of date. I know because it is my research! My study dates from the Cretaceous period of health care – before managed care. The days when providers could make up losses by raising rates are far behind us. The burden of the uninsured falls squarely on the backs of providers. Okay, so her inappropriate citation is not sniper fire in Bosnia, but it is fits the theme.
Other issues are more salient. I agree with Clinton that individuals who can afford to contribute something towards their medical care ought to do so. Plans to increase insurance affordability should take center stage. (Getting rid of state benefits mandates would sure help.) But the real crux of the Clinton/Obama divide is the question of exactly how we will force reluctant individuals to buy insurance. Clinton plans to rely on tax subsidies and fines. Obama plans to rely on subsidies, and so will fall short of the 100% coverage goal. But no one knows how large the fines will have to be, and even fewer people want the feds to start fining households thousands of dollars for failure to buy health insurance. So complete coverage will require huge tax subsidies. With Congress facing a deficit the size of a calving Antarctic ice shelf, I don’t see it happening. Do you?
Hillary Clinton tried to have it all once before. Each ingredient in her recipe for reform made sense, but the entire meal gave the American public indigestion. Obama’s appetizer is filling enough for me.