Finally, I’m ready to assess and critique the health plans put out by our Presidential hopefuls. I’m starting with Hillary Clinton for several reasons. The first is that she has a history of putting health care plans out there, and because of her history, I find her ideas intriguing. Second, I wanted to start with the candidates that make universal health care (or at least near universal health care) a priority as only those plans that attempt this do I take to be serious (We can debate this point on another post, but for now I direct you to the Institute of Medicine). Lastly, I want to start with the candidates in which the polls speak kindly. The list of people that meet my criteria are Clinton, Obama, and Edwards.
Another note before I dive in is that we must assess these plans as political first, policy second. These candidates are trying to win votes so you can expect proposals to be a little short on the detail, to burry the negative aspects, and by all means to minimize new taxes and any burdens that might be asked of America. I’m willing to grant them some wiggle room here as it is certainly understandable that politics win out during the campaign.
I’ll get my feet wet with a small observation. After I printed out Hillary’s plan the first thing that struck me was the title, “American Health Choices Plan.” The title is awkward and transparent. She wants to emphasize that this in not 1993-1994 – her plan has choices; it does not interfere with your current set-up. It seems to be a reaction to her history. Moving on.
Clinton’s plan has one major controversial and pivotal policy feature and that is an individual mandate (cloaked behind individual “responsibility”). If you read nothing more, this is the policy point that makes her plan work and opens her to criticism. An individual mandate forces all Americans to get health insurance (much like car insurance). Under her plan you have no choice but to have insurance. The individual mandate mocks the title of her plan. However, there is a clear and strong reason for the mandate. As long as individuals can choose to forgo health insurance there will be a disproportionate percentage of sick (and costly) people enrolled into insurance plans. It’s called adverse selection (for those with an economics background it is all wrapped up in the market failure – asymmetry of information). This phenomenon occurs when the healthy (and usually young) drop insurance they are not using and the sick (or those who think that they might get sick) seek out insurance. As more sick enroll and the healthier drop out the expense to the insurer rises. Basically, health insurance attracts the sick. This phenomenon leads to all of those nasty things that insurers do including: denial due to pre-existing conditions, cream-skimming (attempting to attract the healthy and avoid the sick), escalating insurance prices, etc. However, if everyone is pooled together then many of these negative attributes of health care are minimized. An individual mandate is a powerful tool that forces everyone to pool their money and their risks – kind of the point of insurance.
Again, I want to emphasize that the individual mandate is crucial. If you can stomach the mandate then this plan has a lot of possibilities. Hillary knows health care. But if you feel that no matter, even if it is for the greater good, should individual freedoms of choice be limited then you will have a hard time with this plan. I’m going to leave this discussion here for now, open it up to comment, and come back to the other features of her plan in the near future including financing, affordability, quality, cost-containment, and the basic logistics.
One question for Hillary though. How are you going to enforce this individual mandate?