Furious ’08 Debate Over Health Care Could Be Good

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Something remarkable — and good — has happened in the health care debate: Almost everyone agrees that all Americans need to have insurance coverage. The debate now — and it will be furious — is over how to bring that about.

Two leading Democratic presidential candidates — Sen. Hillary Rodham Clinton (N.Y.) and former Sen. John Edwards (N.C.) — advocate a government mandate requiring all Americans to have insurance coverage, though Sen. Barack Obama (Ill.) does not.

On the Republican side, national mandates are anathema, but candidates like former New York Mayor Rudy Giuliani, former Massachusetts Gov. Mitt Romney and Sen. John McCain (Ariz.) contend that their proposed tax deductions or credits will enable everyone to buy private insurance.

(Romney signed an individual mandate into law in Massachusetts and sometimes says it’s a model for other states, but won’t advance it as a national program. He now favors making all medical expenses tax-deductible.)

The agreement on universal coverage is good because if everyone is covered — young and healthy, middle-aged and sick, well-off and poor — average insurance premiums can come down, making coverage more affordable and ending the need for anyone to seek medical care in hospital emergency rooms.

How to provide coverage is going to be one of the major issues of the 2008 campaign, leading — one can only hope — to passage of national health reform during the next president’s first term.

So far, polls indicate that the public regards health care as the No. 2 issue to be addressed by ’08 candidates — Iraq is No. 1 — and that voters trust Democrats far more than Republicans on the health care issue. But the election debate has just begun.

In it, Republicans charge that Clinton’s plan, in particular, is designed to lead to a Canadian-style, government-run single-payer system with little or no private insurance and long waits for care.

They contend that their alternative — a competitive private insurance marketplace financed by tax breaks — will make individuals more attentive to health costs and make coverage more affordable.

On the other hand, Democrats charge that GOP schemes will undermine the employer-based insurance system and throw older and sicker Americans into an unregulated market where they will not be able to afford insurance.

There is merit to each case, and the best answer may be a compromise that involves mandatory coverage, tax credits and a regulated private market. Such a plan has been proposed by Sens. Ron Wyden (D-Ore.) and Bob Bennett (R-Utah) and another by the Committee for Economic Development, a big-business-oriented think tank.

The case against Clinton’s health plan — and it’s applicable to Edwards and Obama as well — is that by creating a Medicare-like government alternative to private insurance and heavily regulating private plans, people will flood to the government plan, leading to Canadian-style medicine.

As Joseph Antos, a scholar at the American Enterprise Institute put it, Clinton has designed “a reasonably clever way to prove that the private sector doesn’t work and have the government swoop in on a white horse. ... [She’s] not jumping immediately to a single-payer system — politically, that’s a smart move — [but] indirectly.”

Antos and others contend that Clinton’s proposed requirements that insurance companies cover everyone who wants a policy (“guaranteed issue”) and charge everyone the same premium regardless of health, age or pre-existing medical conditions (“community rating”) will hugely raise the price of private insurance, giving an advantage to her government-run insurance plan.

There’s no question that Clinton’s rhetoric betrays hostility toward private insurance companies — whose former lobby, the Health Insurance Association of America, led the way in defeating her 1993 health plan.

At a forum last week sponsored by the Kaiser Family Foundation, Clinton said, “We’re going to change the way insurance companies do business in America. Right now, [they] spend $50 billion a year trying to figure out how not to cover people. Well, I’m going to save them a fortune and a whole lot of time because the new policy is, no more discrimination, period.”

Clinton’s $50 billion figure seems to encompass all underwriting, marketing and administrative costs for the insurance industry. She said government programs were far more efficient, but neglected to note that insurance companies provide services like disease management that public plans don’t.

Various studies show that several states that have imposed guaranteed-issue and community rating requirements in the past ultimately repealed them after insurance companies dropped coverage and quit selling in the states.

Other studies document that public satisfaction with Canada’s single-payer system is low because of long waits for diagnostic tests and surgery. Canada’s Supreme Court overruled the government’s ban on private insurance.

If Clinton’s plan is flawed — and Edwards and Obama also propose government-run plans that individuals may choose — so are Republican ideas. GOP candidates sensibly want to end tax discrimination that favors employee-sponsored insurance over individual-market insurance and encourage people to be cost-conscious about health care.

On the other hand, tax deductions or credits may encourage younger, healthier workers to drop company coverage and buy cheap policies on their own, raising the cost for older workers left behind.

Compromise plans like Wyden’s and the CED’s would change the tax laws, give individuals more choice and money to buy private insurance — not government insurance — and set regulations for how the private insurance market operates.

The administration might have helped Republicans get a start in the ’08 debate by presenting a full-blown tax credit plan, but failed to do so — and the veto of a bipartisan plan to cover children gives a boost to Democrats.

But this debate is just beginning in earnest. Republicans are starting from behind, but they can catch up if they emphasize that they want to cover everyone, as Democrats definitely want to do. “Universal coverage” should be everyone’s mantra.