Welcome to the first post of our newest series. In this series, we’ll try to cut through some of the media hype and summarize the health care proposals put forward by the leading candidates for President.
Commentary by Aaron Lord MD, PGY-1, and Zackary Berger MD PhD, PGY-2, Health Care Policy Section Editor
Post # 1: A Subway Series
First up in this series are New York’s Hillary Clinton (D) and Rudy Guliani (R). We’ll devote more space to Clinton’s plan because hers offers more specifics.
Hillary Clinton (D)
Clinton would require every individual to choose an insurance plan. Anyone could keep their current insurance if they were satisfied with it. Two other choices would be available: a menu of private options offering the same benefits that members of Congress receive, the other a Medicare-style public plan. Tax credits would be offered to working families to make it easier for them to afford insurance.
How would this be paid for? The details aren’t spelled out, and this is where the complications come in. (See the detailed analysis of Clinton’s plan at the blog Health Care Policy and Marketplace Review.) In particular, the Clinton plan predicts that “most savings [will] come through lowering spending due to quality and modernization.” As Robert Laszewski of the Health Care Policy blog says, this could be Clinton’s most dangerous assumption. If quality and modernization cannot ensure savings by themselves, if providers and payers cannot agree on cost-limiting measures, if more taxes on the higher brackets (i.e. the rich) will not be enough to balance the books (as Clinton assumes), what will happen to the Clinton plan?
Alongside Clinton’s individual mandate for health insurance, there are requirements for other participants in the system. Insurance companies “will end discrimination” and “ensure high value,” while “drug companies will offer fair prices”; providers will work collaboratively to deliver high-quality, affordable care; “large employers” will be expected to provide health insurance or contribute to the cost of coverage (small employers will receive a tax credit to offer coverage, or start doing so).
What “fair prices,” “high quality,” and “large employers” are supposed to mean has been a source of debate even before the first Clinton health plan. How will affordable coverage be mandated when some estimates place the cost of family health coverage at $12,000 per year? If twenty-five employees is the cutoff definition for “large business” (as the Clinton campaign has indicated), what would smaller businesses be required to provide?
Rudy Giuliani (R)
The main component of his proposal is “an income exclusion of up to $15,000 for those without employer coverage to make insurance more affordable.” This would make buying insurance fairer for those who do not have access to employee-sponsored coverage (who must currently purchase their coverage with pre-tax dollars). Under this plan, individuals would move from employer-sponsored plans to individually purchased private plans, making for a freer market of health insurance. His plan would also establish “a Health Insurance Credit to low-income Americans” to purchase health insurance; reform medical liability; streamline FDA approval of new drugs; invest in information technology, improve and expand Health Savings Accounts, and “infus[e] incentives in insurance markets…to promote healthy lifestyles and wellness programs.” Giuliani does not discuss in his proposal how these changes would be paid for.
Republicans and Democrats
Laszewski points out that “from thirty thousand feet,” all Democratic healthcare plans look the same: lots of new spending to guarantee access for all Americans to some sort of health care plan, whether public, private, or in between. Republican plans, for their part, tend to invoke individual mandates, a vibrant free market of competing health care choices, and technological efficiency. Informed consumers with the proper incentives would know to allocate their resources efficiently. (Whether Medicare Part D proves this assumption is open to question.) If Clinton’s health plan stakes out a centrist position in between these two, in what direction will the “sausage factory” of legislation push the finished product? Will Giuliani’s plan be enough for dissatisfied healthcare consumers? We’ll see . . . if they get that far.