Clinton's Health Plan: Lofty Goals, Few Specifics

Main Category: Health Insurance / Medical Insurance
Also Included In: Medicare / Medicaid / SCHIP;  Public Health
Article Date: 18 Sep 2007 - 0:00 PDT

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Presidential candidate Hillary Clinton unveiled her long awaited health care plan in Iowa. The following is a response to the plan by National Center for Policy Analysis (NCPA) President John C. Goodman:

"Universal coverage at a minimum requires a credible plan. So far, no presidential candidate -- Hillary included -- has come up with one. We can't mandate our way to universal coverage. Even if health insurance is absolutely free, mandates don't work. If anything, they may make matters worse."

Here are five principles politicians tend to overlook:

-- Employer mandates don't work. Hawaii has had an employer mandate for more than 30 years; and the uninsurance rate in Hawaii is higher than in several states that have no mandate. A mandate is a tax on labor. Employers respond by economizing on labor as well as by turning to part time and contract workers. Pay or play mandates (insure your employees or pay a fine) have the same effect.

-- Individual mandates don't work. All but three states mandate auto liability insurance. Yet the national uninsurance rate for drivers is only a point or two below the national uninsurance rate for health.

-- A mandated benefit package only makes things worse. Health insurance mandates almost always specify a package of benefits that people must buy. The problem here is: the cost of the package is going to grow at twice the rate of people's incomes. So the mandate will absorb an increasing share of family income or will require increasing tax subsides. Things are made even worse as special interests lobby to include particular services and procedures in the package.

-- Insurance in name only is not universal care. The most important barrier to care for low-income patients is not lack of insurance or price rationing. It is rationing by waiting. Further, the uninsured and Medicaid and S-CHIP enrollees often get care from the same doctors and same facilities. Indeed one reason why so many eligible people fail to enroll in government insurance plans is that enrollment often doesn't expand access to care.

-- Pay or play for individuals is not enough. Making individuals pay more in taxes if they are uninsured is not unreasonable. In fact, we do that already under federal income and payroll tax laws. But as Massachusetts is currently finding out, many people will pay the fine and remain uninsured anyway.

National Center for Policy Analysis
http://www.ncpa.org

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