Candidate: When it comes to health-care reform, Hillary Clinton is the sadder-but-wiser girl. A decade ago, she tried to transform the way we pay for health care with a complicated "managed competition" plan. The best argument in its favor was that it probably wouldn't work and that when it didn't, the federal government would have an opportunity to take over. Today, Clinton advocates incremental reform. The best argument in its favor is that it probably won't work and that when it doesn't, the federal government will have an opportunity to take over. This time, though, the path to single-payer health insurance (shhhhhh!) seems a bit smoother.
Elegance: As always, I must explain that this refers not to the elegance of the former first lady herself, who always dresses to the nines, but rather to her health-care plan. The plan consists not of one big idea but of various small ideas, most of them familiar. That renders the plan inelegant. On the other hand, as with John Edwards' plan, Clinton's would set some interesting (though unacknowledged) economic forces in motion. (See "Market gimmicks," below.)
Market gimmicks: Clinton's "American Health Choices Plan" is all about choices! If you're happy with your health-care coverage, then you may keep it. This is wonderful news for the 12 people in the United States who are happy with their health-care coverage. Even these 12 (OK, maybe it's 15) won't necessarily remain happy with their private health insurer after the insurance lobby has a chance to wrestle to the ground new regulatory requirements included in Hillarycare II (see "Susceptibility to the insurance lobby," below).
Or you can choose a public plan similar to Medicare. Like John Edwards' plan, Hillarycare II proposes a competition between private plans and a public plan that the public plan is foreordained to win, because public health care plans are superior to private plans. Bashing Clinton's health-care plan in the Sept. 20 Wall Street Journal, Mitt Romney gripes (subscription required) that once a public plan is established, "[l]obbyists will go to town adding coverage mandates, setting rates and re-shaping plans to fit the wants of their clients." This would be a refreshing change from the current practice, in which lobbyists persuade Congress to set the rules for private-option "Medicare Advantage" coverage so that private insurers run up bigger bills than Medicare does and then send those bills to … Medicare. That is not, I think, what Adam Smith had in mind.
It's probably true that most of the time, public health-insurance programs (Medicare, Medicaid, the Veterans Administration, SCHIP) are more generous than private ones. But Romney fails to acknowledge that public health plans are typically more efficient economically than private health-care plans, too. Romney opposes a market test that allows consumers/taxpayers to choose between a public plan and various private plans because he knows the public plan will likely be both more generous and thriftier. The private sector may never recover from the humiliation.
Susceptibility to the insurance lobby: High. A regulatory component to Hillarycare II prevents insurers from screwing sick or elderly people by denying them insurance, refusing to renew their insurance, or charging them higher premiums. The insurance lobby would embrace these noble goals while quietly working to undermine them in Congress and in agency rulemaking. It would also make fast work of a vaguely defined provision forbidding the use of premiums for "excessive profits and marketing" as opposed to providing high-quality care.
Cost: $110 billion, but Clinton claims that this can be paid for by reining in unnecessary Medicare and Medicaid spending, allowing Medicare to negotiate drug prices, removing barriers to the introduction of generic drugs, instituting electronic recordkeeping (wouldn't that raise costs, at least initially?), ending the Bush tax cuts for households earning more than $250,000, and ending the tax exclusion for employer-paid health insurance for households above $250,000. Is that really $110 billion? Beats me.
How universal? Everybody is required to have some sort of plan. As I've stated before, I don't believe this can possibly be enforced. ("What are you in for?" "Forgot to buy health insurance.") I even have my doubts whether it's constitutional. So, the "my plan is more universal than your plan" taunt that Edwards and Clinton direct toward Obama is meaningless. The only way to make health insurance truly universal is for the public plan to enroll automatically every man, woman, and child, bypassing any sort of premium and funding the program with tax revenues.