Confusion reigns in the public over the similarities and differences in the health care reform proposals that Senators Barack Obama and Hillary Clinton have released in their bid for the White House. I leave John Edwards out of this discussion for purely efficiency reasons. Edwards was the first to release a health care reform plan and Hillary Clinton's plan is identical to Edwards in all but the smallest of details. So that when I refer to the Clinton plan, I am also referring to Edwards'.
Health care reform is a very complex subject and it is difficult to summarize such enormous proposals simply and clearly -- in a way the public can understand. But I think it is critical that we try. There is so much misinformation floating around, it is time to lay it all out for everyone to see.
There are many people in the US who have not made up their minds about which candidate they prefer and there are others for whom their decision just hasn't jelled yet. This diary entry is for them. I'd be happy to answer any questions and provide citations for the points I make. But I do not view this diary as a scholarly tome. It is a blog based on 30 years of health policy research and experience.
BACKGROUND
Health policy is my passion. It is an important part of my commitment to social justice, and my hope for a better future for all Americans. Without good health, it is difficult to hold down a job. Without good health, it is hard to be a good mother or father to your children. Without good health, it is hard to find health insurance and, even if you have insurance, it is probably hard to get the care you need. Health is necessary for life, liberty, and the pursuit of happiness. It is a fundamental human right and the United States of America should start acting on this truth and guarantee all Americans access to affordable, high quality, comprehensive health care when they need it. This is the underlying goal of health care reform for all of the Democratic candidates running for President.
There are approximately 47 million uninsured people and a "guestimate" of another 16 million Americans who have health insurance but are "underinsured." In the last year these folks have discovered that when they get sick or injured their insurance policy does not cover the treatments they need and the insurance company will not pay for their medical expenses. This estimate is probably low, because most people who have poor coverage do not discover it until they are sick. The "underinsured" are defined as those who spent more than 10% of their total annual household income on medical care last year; many of these families went bankrupt. These are the people that Michael Moore featured in his movie SICKO. We need to understand that simply extending lousy health insurance to more Americans is not the answer to our health care problem.
Every American deserves health insurance that will promote, improve, and maintain their health at a cost that is affordable, with providers who deliver the most effective and efficient care available, in a way that is equitable, secure, and respectful of individual liberty and autonomy, enabling Americans to make the choices they think are in their best interest. It is from this framework that I assess the candidates' plans.
What is truly remarkable about the health care reform proposals put forward by Obama and Clinton is how very similar they are in their overall framework. In working with the Congress, either of these plans could form the basis of comprehensive reform. The details will ultimately be worked out in the Congress so there is little point in getting our knickers in a knot over them at this point. However we should pay attention to WHEN the candidates plan to enact universal coverage. Obama have promised to get to work with the Congress in his first year in office and enact universal coverage by the end of his first term. Hillary has promised to enact universal coverage by the end of her second term. The only thing she promised to do on health care in her first year in office is to sign the State Children's Health Insurance Program (SCHIP) bill. If the next President, does not work with the Congress immediately upon taking office to draft legislation, the chances of us accomplishing our objective for universal coverage will be slim to none. Big social reforms like this must happen when the President's political capital is highest and the public support is strongest - as soon as they take office. Research finds that a longer a President waits to implement their agenda, the less likely they are to achieve it.
What is different this election cycle about the health care reform debate is not so much the candidates' approaches to getting to universal coverage, but the complete paradigm shift that their proposals as a group represent. The model they have all put forward represents a complete break from the proposals of the past.
As a result, it has been very difficult for most Americans, journalists, and political pundits to understand what these proposals include. Much has been made of some of the details in the plans, but rather than debate the merits of one detail or another, what may be more helpful is to understand how these details distinguish each candidate's overall philosophical approach to getting to universal coverage.
I will first lay out the framework for the proposals and will than discuss their fundamental philosophical differences.
DEMOCRATIC FRAMEWORK FOR HEALTH CARE REFORM
No longer are any of the candidates proposing a "one-size-fits all" health care reform of the past. None of them have proposed a single payer system that everyone would have to go into, and yet each of them offers the choice of a single payer plan ("a public plan like Medicare") in their menu of options.
No longer are any of these candidates proposing an employer-based system, where everyone who works would get their health insurance from their employer or their employer would pay into a pool to subsidize their coverage, and yet each of them has an employer pay or play component in their plan.
None of them represent monstrous expansions of public programs (like significantly expanding Medicaid for all of the poor and the Sate Children's Health Insurance Program to all kids and their parents), and yet each of them has some expansions of these public programs in their plans.
None of them prescribe managed competition (where everyone chooses from a menu of managed care plans like the Federal Employee Health Benefits [FEHBP] or like the Clinton's 1993/94 health care plan), and yet they all offer the option of participating in a pool with a choice of private, managed care plans like members of Congress get under the FEHBP.
None of them touch Medicare, except to allow Medicare to negotiate drug prices with pharmaceutical companies to reduce drug costs.
They all offer premium subsidies based on income. Clinton relies on refundable tax credits, whereas Obama provides direct subsidies for premiums base on income.
They all will regulate the health insurance available through their plans so that insurance companies will no longer be able to refuse to offer insurance based on health status, nor price your premium and exclude coverage based on pre-existing conditions. We should all breath a sigh of relief in favor of this kind of regulation. No more limits on pre-existing conditions!
They all have strong and nearly identical provisions to try to control rising health care costs, improve the quality of medical care we receive, and make sure that all Americans get the preventive care they need and have access to programs to help them manage their chronic diseases. They all promote public health.
Finally, they would all roll back the Bush tax cuts for the wealthiest Americans to help finance the reform.
THE PARADIGM SHIFT
The paradigm shift in all of this is that the candidates offer CHOICE: not only choice of any doctor or hospital under the single payer option, the choice of a private managed care plan under the FEHBP option, and the option to keep your employer or individual coverage, should you choose.
At their core, all of the proposals offer Americans the choice of what kind of healthcare SYSTEM under which they want to receive their medical care:
An employer based system
A public insurance system for people with low incomes
A pool where you have a choice of private, managed care plans
A single payer plan (like Medicare)
WHAT DIFFERENTIATES THE PLANS?
It is the clues buried in each plan that suggest how each candidate will approach social reform, how they view the American people and what they can and cannot expect of them, and how the American people can expect to be treated under a reformed system.
Both of these plans are estimated to cover between 32-34 million Americans who are currently without health insurance. It is estimated that all of these plan will leave uncovered between 13- 15 million Americans. You read that right. While Obama's plan may not cover 15 million Americans, Clinton's plan won't cover about 13 million. None of these plans will get us to truly universal coverage.
In fact, there is not a single state in the nation that has implemented comprehensive health care reform that has been successful in covering more than 90% of their population. Even Hawaii, which has had an employer mandate since 1975 and has a comprehensive state health insurance program, finds that 11% of the state's population remains uninsured. Even in Vermont and Maine, which have been implementing their own comprehensive reforms, find that they cannot cover the last 10% of the population. And Massachusetts, which enacted an individual mandate, has already exempted 20% of the uninsured from their mandate because there are no affordable plans for them to purchase under the reform. This is hardly universal coverage.
Let's face it. Getting to universal coverage will be very, very hard. But 13-15 million Americans without coverage would be an enormous improvement over the 47 million who are presently uninsured. Providing comprehensive coverage to 75% of the uninsured would represent a huge step forward. This would reduce the rate of uninsured in the US from the present 21% (of the non-elderly population) to about 6%.
While I am certainly not advocating that we leave 6% of the population without access to health care, as this hardly accomplishes our goal of universal access, it may be the best we can do under an insurance program. For the remaining 6%, other approaches to ensuring access to timely, affordable health care may be required. But under both Obama's and Clinton's plan everyone who wants coverage will get it. No one who wants health insurance will be left out. No one.
We might want to think about health insurance coverage rates in the same way we do the unemployment rate. We call 5% unemployment "full employment." Perhaps we need to accept that a 5% uninsured is rate is "full coverage" and is about all we can expect from an insurance expansion. If we are serious about getting health care access to this last 5-6%, we are going to have to come up with some other creative solutions that better meet the needs of this population - and it might not be insurance.
And here is where the philosophical differences between the candidates is important. Obama wants, first and foremost, to make sure that comprehensive insurance is affordable and available to absolutely every American who wants it. Anyone who has studied the problem of the uninsured in the US knows that the major reason most individuals do not have health insurance (and the major reason most small businesses do not offer insurance to their employees) is because it is UNAFFORDABLE. The vast majority of small businesses and individuals would buy coverage if they could afford it. And Obama's plan is more affordable than Clinton's and will cost significantly less.
Hillary Clinton, however, sees the underlying problem of the remaining uninsured quite differently from Obama. She comes from the view that there are a lot of healthy people out there who will choose not to buy health insurance unless she forces them to do so or threatens them with financial penalties if they don't.
While I am sure there are some young people who believe they are invulnerable and who do not believe they need health insurance, I think forcing them to buy something they can't afford is not a solution. I have two children in their 20's and know their friends well and teach about 200 undergraduates every year. If they don't get coverage through school or their job, many of them have purchased health insurance on their own. My 25 year old son bought a high deductible health plan that covers 4 annual visits for preventive and acute care each year outside of the deductible. The cost was about $150 per month and when he was student teaching this was adequate and affordable. My 28 year old daughter, on the other hand, was a contractual worker in Manhattan and went into the private market to buy individual coverage (she is very healthy) and ended up paying a premium of $1,000 per month ($12,000 a year) for single coverage, with $45 copays for office visits. This would be completely out of reach for most people her age. She and her peers want health insurance coverage and most of them will purchase it if it is affordable. The problem is fundamentally affordability.
The group that Hillary Clinton is most afraid will not buy coverage is this group of 20-somethings. This group includes young adults who no longer qualify for health insurance under their family's policy (most states cut dependents off from coverage when they turn 19); it includes undergraduate and graduate students who do not get insurance through their college or university; it includes young adults who are in jobs that do not offer them insurance; and it includes young adults with pre-existing conditions who either cannot buy insurance at all or who cannot afford what is available.
I am sure there must be some uneducated, selfish, and stubborn young people who think they are invulnerable to illness or injury, and wouldn't even buy coverage if it was affordable relative to their income. However, the young people I know, and I imagine that most young adults in the US, want to do the right thing and want to have health insurance for themselves and their young families. They want to be responsible members of society. And most of these young people would welcome the opportunity to purchase affordable health insurance if it were available.
So the fundamental question is what should we do about these 20-somethings who do not have insurance? The candidates responses stand apart in sharp relief.
Clinton would force ALL Americans to prove that they have purchased health insurance, most likely when they file their annual Federal Income Tax returns. She will also use the tax code as the basis for achieving "affordability" through refundable tax credits. If any of us fails to demonstrate proof of coverage in our taxes, we will be levied some kind of penalty or fine. Under the Massachusetts mandate, those who do not show proof of insurance on their income tax return are assessed a fine equivalent to half the total cost of the premium payments for the entire year. This borders on draconian.
While Clinton emphasizes that only the "bad apples" who refuse to buy coverage will be assessed a penalty, the reality is that for a mandate to work, EVERYONE will have to have their health insurance monitored on an annual basis and there will need to be an enforcement mechanism, most likely one administered by the IRS.
The question I would like to pose to the American people is if you think forcing all Americans to report health insurance as part of their annual tax returns and getting the IRS in the business of regulating, monitoring and enforcing health insurance is the best way to deal with a few 20-somethings who may not buy insurance?Personally, I think this is a terrible idea. I would venture to guess that the extra cost of the bureaucracy and IRS staffing needed to annually monitor and enforce health insurance for more than 300 million Americans might almost be enough to pay for insurance for the wayward 20-somethings!
But why should we all have to suffer through the IRS regulating our health insurance when there might be another, must less costly, and much more humane solution to getting those pesky 20-somethings covered?
Obama offers a very different way. He is the only candidate proposing to help young adults keep their dependent coverage through their families beyond the standard age of 19. He proposes that they be able to keep their family's coverage until they are 25. He estimates that this will take care of most of the problem. New Jersey has increased the qualifying age for dependent coverage to 30. Clinton offers nothing like this under her plan.
Obama understands that there are many Americans who simply can't function under an insurance model or that insurance is not the core problem for many people in getting health care. There are many circumstances in which some Americans find themselves, such that insurance will not solve their problem. These include the homeless and mentally ill, and people who live in rural areas where there is no health care. And if there are millionaires out there who want to self-insure, I have no problem with them bearing their own financial risk. They represent such a small proportion of the problem, leaving them out will not affect the risk pool or the costs of care for the rest of us.
COMPARISON OF DIFFERENCES
Enact Coverage
Obama - 1st term
Clinton - End of 2nd term
Total Cost
Obama - $50-60 billion
Clinton - $110 billion
Average savings per family per year
Obama - $2,500
Clinton - $2,200
Allow adult children to stay on family policy untiil age 25
Obama - YES
Clinton - NO
Individual Mandate
Obama - NO
Clinton- YES
IRS Enforcement of Insurance
Obama - NO
Clinton - YES
Subsidies based on income
Obama - direct subsidies for premiums
Clinton - refundable tax credits
Number people who remain uninsured
Obama - 15 million
Clinton - 13 million
OBAMA'S APPROACH TO HEALTH POLICY
Obama's approach to solving most problems is to listen to people, understand their needs and circumstances, and then to work with them to find solutions that meet their needs. This is an approach to health care I think that all Americans can appreciate. Obama is the only candidate who does not want to force Americans into government programs that don't work for them, but is instead dedicated to finding solutions that will work for them.
Oabam's approach appreciates how important individual liberty and autonomy are to the American people. Obama treats Americans with respect and he expects in return that, as Americans, we understand that we have responsibilities as well. The Founding Fathers had great faith in the American people to make their own decisions on the one hand, but to provide for the common good on the other.
Heath care represents the common good. None of us knows who will be the next of our friends or family to get a diagnosis of cancer, to be hit by a drunk driver, to slip and fall, or to have a massive heart attack. All of us are at risk and it is nearly impossible to predict who will need health care or when or why. And it is because of this uncertainty that we all need access to health care and to contribute what we can afford, and no more.