Sunday, September 23, 2007

HillaryCare 2.0

Hillary Clinton has announced her latest plan for expanding health insurance in America. Below is a lengthy point-by-point answer to what is being called HillaryCare 2.0.

Clinton has stated her confidence that she can out-debate the Republican candidate on the subject of healthcare, claiming Republicans have a “just say no” healthcare policy. After looking at what she has to offer, I gladly put myself in that “just say no” camp. Some of what Clinton promises is logically impossible, some of it is meaningless gibberish, some of it is very base class warfare, and some of it utterly fails to solve the problems she seeks to address. In summation, it is an ill-conceived fantasy.

The first thing that must accompany any discussion of healthcare, or any other scarce good or service, is that you can’t have your cake and eat it too. Healthcare can not be high-quality, prompt, and cheap all a the same time. At least one of these criteria must suffer.

What does Clinton promise?

The first sentence on her healthcare web page states: “Hillary's American Health Choices Plan covers all Americans and improves health care by lowering costs and improving quality.”

So, it looks like we’re going to be waiting in line. As I explore the plan further I suspect that she will somehow make America suffer on all three points.

Linking to the more in-depth explanation of the plan, one discovers a bullet-point rundown of the plan.

In Point 1 Clinton’s plan allows individuals to keep their existing health insurance if they choose to, but “offers” “the same menu of quality private insurance options that their Members of Congress receive”, “without any new bureaucracy as part of the Federal Employee Health Benefit Program”.

It is unclear to me why private insurers could not offer any of a nearly infinite number of plans regardless of how much they resemble Congressional benefit plans.

Perhaps Clinton plans to put the Federal government (further) into the insurance business. I can’t imagine her “offering” will be cheap, as it necessarily will cost either in premiums or taxes.

In Point 2 Clinton promises to streamline the existing bureaucracy to remove waste and promote preventative care, thus reducing costs. Her proposal “ensures that job loss or family illnesses will never lead to a loss of coverage or exorbitant costs,” and “ensures that no American is denied coverage, refused renewal, unfairly priced out of the market, or forced to pay excessive insurance company premiums.”

It is unclear why private insurance is obstructed from introducing preventative care plans, as it is also unclear how she will ensure against any loss of coverage or impose a (purposely vague) “fair” coverage within market constraints.

In Point 3 Clinton wishes to “Promote Shared Responsibility”. She fears that relying on market mechanisms will result in “scaled-back coverage or limited choices”.

[I]nsurance companies will end discrimination based on pre-existing conditions,” and “drug companies will offer fair prices and accurate information.

Clinton does not explain how outlawing price discrimination will not result in higher premiums for most Americans, nor is it obvious what is unfairly priced or inaccurate about prescription drugs. Undoubtedly she will create disincentive for the robust continuation of America’s first class pharmaceutical research and development.

Individuals “will be required to get and keep insurance”.

What level of insurance? Unspecified.

Providers “will work collaboratively with patients and businesses to deliver high-quality, affordable care.” How this differs from the current arrangement is not obvious.

Who pays?

[L]arge employers will be expected to provide health insurance or contribute to the cost of coverage: small businesses will receive a tax credit to continue or begin to offer coverage.

Here Clinton is explicitly picking winners and losers, giving government the ability to divine the dividing line between large and small business. Here she codifies the horrible mistake of linking health insurance to employers that is the genesis of the current problem. Isn’t the whole problem of losing one’s insurance when one loses a job a major gripe against the current regime? She also appears to be hiding the costs of her plan in a demagogic attack on the bogeymen of “big corporations”.

Point 4 addresses affordability and universality.

Working families will receive a refundable tax credit to help them afford high-quality health coverage.

Didn’t Bush propose individual tax relief for health insurance purposes?

Limit Premium Payments to a Percentage of Income: The refundable tax credit will be designed to prevent premiums from exceeding a percentage of family income, while maintaining consumer price consciousness in choosing health plans.

Huh? So, poor families will still be “choosing” a level of coverage related to how much they can afford. Isn’t this exactly how things work now, other than the fact that they’ll be required to purchase coverage?

She will “strengthen” (i.e., spend more money on) Medicare and S-CHIP to “fix the holes in the safety net”.

Generally, conservatives favor a safety net, but one that doesn’t float permanent benefits into the middle class, and one that socialist Democrats haven’t explicitly called a “down payment” on single-payer healthcare.

Launch a Retiree Health Legacy Initiative: A new tax credit for qualifying private and public retiree health plans will offset a significant portion of catastrophic expenditures, so long as savings are dedicated to workers and competitiveness.

One man’s tax credit is, by definition, another man’s tax increase. Clearly she intends to lower premiums for current employees, but again she wants to codify the relationship between employment and heath insurance.

Point 5 attempts to sell the plan as fiscally responsible.

“Most savings” come through modernization and cost savings - savings that can be completely divorced from the rest of her plan.

Most Americans will get a net tax cut to pay for insurance premiums that will come from tax increases from expiration of the Bush tax plan and limiting the employer tax exclusion.

The government giveth and the government taketh away.

Making the Employer Tax Exclusion for Health Care Fairer: The plan protects the current exclusion from taxes of employer-provided health premiums, but limits the exclusion for the high-end portion of very generous plans for those making over $250,000.

So again, Clinton codifies the link between health insurance and employment, but does as a class warrior. The Bush plan to eliminate the exclusion while providing a standard deduction for health insurance is much simpler and less arbitrary, while maintaining Clinton’s preferred outcome of greater taxation on “generous” plans for the rich.

In conclusion, Hillary Clinton’s healthcare "plan" is a mishmash of logically independent proposals and meaningless campaign buzzwords. Her proposed regulations of private insurance will have the effect of increasing premiums for everybody. Her tax manipulations are both misguided and arbitrary, smacking of class warfare. She promises to expand government into healthcare by spending more on classic welfare programs like Medicare and S-CHIP. She will require every individual to purchase some as-of-yet unspecified level of insurance. And she has the gall to call it the “America’s Health Choices Plan”.

To add insult to injury, a side bar on the website explains how her plan is supposed to benefit Women, Af-Ams, Hispanics, and Seniors, as well as those living in California, Iowa, Nevada, New Hampshire, and South Carolina. As a young white male from the late-primary state of Pennsylvania I feel distinctly ignored.


lunkhead said...

If you get a phone call that begins with the 666 area code, you can rest assured that it is the Hillary campaign! God help us if that socialist is elected.

Anonymous said...

Your last line reminds me of a quote from Spin City.

Stewart: "What's with all these activist groups? Who's watching out for the heterosexual white male?"

Carter: "Congress."


Sockless Joe said...

Mike I'm just impressed anybody got to the end of it.

Any redistributive plan necessarily picks winners and losers. She listed the winners - I wasn't there.

I just watched an interview of the Hildebeast and I think she gets a lot of mileage out of her members-of-Congress line. The main deception there is "offer". Either it will be priced too high, which will flop; just about right, making it a pointless addition to the market (still a flop basically); or it will be priced too low, which will lead to a cascade into single-payer as people flee their private insurers.

I miss Spin City.

Anonymous said...

I feel Spin City was surprisingly underrated. I miss it not quite as much as Newsradio and much less than Futurama, but I don't get to see reruns quite as often.