Hal Holman is a professor of Medicine at Stanford University, and Diana Dutton is a research fellow at the London School of Economics and a former director of health services research at Stanford. The married couple supports Obama.
Many people think Hillary Clinton has a better health plan than Barack Obama. She repeatedly tells voters her plan will cover everybody, while Obama’s will leave out 15 million people. Newly emerging data tell a different story.
Since 2006, Massachusetts has been running what amounts to a pilot test of Clinton’s universal mandate plan, requiring all uninsured residents to buy private insurance or be penalized. The state regulates participating insurers and subsidizes costs for lower-income people. Yet after two years, nearly half of the uninsured still aren’t covered, despite strenuous outreach. To boost enrollment, Massachusetts has stiffened fines – up to several thousand dollars. Nevertheless, many people remain uninsured, citing more pressing needs. Clinton insists her mandate wouldn’t force people to buy insurance they can’t afford, but that’s exactly what’s happening in Massachusetts. The state has had to exempt 20 percent of the uninsured because they couldn’t afford even subsidized premiums.
Clinton’s plan would also likely fall far short of universal coverage. She hasn’t said how her mandate would be enforced, but has mentioned the possibility of garnishing wages. Without affordable insurance, a universal mandate means little.
Massachusetts highlights the difficulty of expanding private coverage
and keeping costs under control. Since 2006, Massachusetts employees’
health insurance premiums have been rising faster than the national
average – individual annual premiums now average $5,370 vs. $4,476
nationally – and Massachusetts workers bear more of these costs than do
workers nationally (24 percent vs. 16 percent). With subsidy costs soaring, the
Massachusetts plan is running 30 percent over budget, and its survival is
uncertain. Meanwhile, the state’s major health insurers made over $1
million in profits every day, and charged overhead costs five times
higher than Medicare’s. “What Massachusetts has done successfully,” one
health care official wrote, “is to provide a new revenue stream for the
private insurance system. What remains elusive is health care for
In short, mandating universal coverage is easy, paying for it is not. The cost of expanding private insurance coverage nationally with
government subsidies is likely to swamp the federal budget.
Reigning in costs is the central challenge facing any health reform.
Both Clinton and Obama project savings from modernizing information
technology, stressing prevention, and coordinating delivery of care. Both would create a government-regulated insurance “market,” requiring
insurers to cover everyone at the same price regardless of their
health, and offering a Medicare-type public program with comprehensive
benefits open to all. The goal of this regulated insurance market
would be to drive costs down by increasing competition among insurers,
while ensuring adequate benefit packages and preventing discrimination
against the sick. Whether such reforms would actually control costs
remains to be seen. They will surely meet resistance from health care
industry groups that benefit directly from continued price escalation
and market expansion.
Anticipating such resistance, Obama has proposed a plan that is
intended to move toward universal coverage without putting an unfair
burden on individuals in the process. Will his plan leave 15 million
people uninsured, as Clinton claims? More than 80 leading health policy
experts have stated publicly “there is simply no factual basis” for
this assertion. Most analysts agree that the combination of purchasing
pools, subsidies, easy enrollment, mandatory children’s coverage, and
existing insurance will cover the vast majority of Americans. Former
Labor Secretary Robert Reich thinks Obama’s plan will actually cover
more people than Clinton’s, once all the details are clarified.
Of course, no plan will amount to anything unless it can get through
Congress. Polls show that most Republicans oppose a universal mandate,
but party leaders concede their case is weaker against Obama. Clinton’s 1993 health reform effort failed in Congress largely over the
mandate, and many people remain leery of government coercion in health
care. Given our faltering economy, Obama’s incremental approach to
reform makes sense both politically and fiscally.
Paradoxically, Obama may promise less but accomplish more. With
growing public demand for better coverage, he may finally break the
health reform logjam.