Clinton Unveils Her Health Plan

That was then. This is now.

Then was when, as first lady, Hillary Clinton led the charge for health care reform. Her proposal was so unwieldy,  politically naive and arrogantly promoted that it helped Republicans take over control of Congress for the first time in over 40 years and set back the cause of health care reform by over a decade.

Now is when, as presidential candidate, Senator Hillary Clinton needs to put that history behind her and talk to the future. Which is what she did in Iowa today, unveiling the 2007 version of her health care reform plan.

Her approach this time is to be less original, less ambitious and less arrogant. Instead her new plan shares much in common with several other proposals making the rounds — including those of her rivals for the Democratic presidential nomination. This isn’t a bad thing; quite the contrary. It not only lends her plan credibility, but it provides political cover when it comes under attack.

So, for example, she shares with Governor Bill Richardson the concept that if people are satisfied with their existing coverage, they can keep it. She borrows from both Governor Richardson and Senator Barack Obama the idea of using refundable tax credits to help lower income Americans pay for their coverage. And, like Governor Richardson and former-Senator John Edwards she incorporates the idea of a requirement that all Americans obtain health care coverage and expanding MediCare eligibility.

Like many health care reform proposals — at least Democratic reform proposals — Senator Clinton would require insurers to accept all applicants without regard to their risk profile. As previously noted, she wisely balances this with a requirement that all Americans obtain coverage. What’s unclear is how she would enforce this requirement. Poor compliance by consumers would lead to the burden Senator Clinton’s state of New York bears: average insurance premiums roughly 350 percent higher than those in California.

Senator Clinton makes a major point out of avoiding the creation of new bureaucracies (another approach she shares with Governor Richardson). However, there’s something a bit disingenuous about this claim. True, instead of creating a new government health care program she would open up the Federal Employee Health Benefit Program to all Americans. However, the expansion required of the FEHBP to manage such growth would be the actuarial equivalent of creating a new bureaucracy. But with the added downside of probably disrupting the agency’s current mission.

As with all the health care reform plans put forward by presidential candidates, Senator Clinton’s proposal is more a window into her thinking than a blue print for reform. The new president will need to work with Congress to fashion a detailed reform structure. There will be plenty of debate and shaping of ideas in that process. The outcome may resemble what’s being described today, but then again, it may not.

Yet this glimpse into the approach of Senator Clinton is illuminating. By avoiding a single payer approach she demonstrates her willingness to take on the most liberal elements of her party. By imposing requirements on both corporations and individual she invites attacks from conservatives concerning a heavy-handed government approach to health care. In short, given the context of the health care reform debate as it exists today, Senator Clinton’s package is somewhere in the middle (ok, maybe a bit left of the middle, but close enough for government work). This positioning might be expected in the general election, but its a risky move in the primaries. However, it also demonstrates that Senator Clinton learned something then and she’s applying those lessons now.

Budget a Bad Omen for Insuring the Uninsured

As lawmakers prepare for a special session on health care reform and the Governor touts a broad coalition backing universal coverage, the recently enacted budget should serve as a reality check.

Governor Arnold Schwarzenegger and his staff has made clear that any reform package emerging from the special session needs to include an “enforceable” requirement for every Californian to obtain health care coverage. This makes sense. Requiring carriers to issue coverage to all applicants without a corresponding mandate to buy is a formula for disaster. People are logical. If it makes economic sense to simply wait until medical services is needed before buying coverage that’s what they’ll do. Of course, when healthier individuals exit an insurance pool, overall claims increase which leads to higher prices for those remaining. This drives more low cost individuals from the pool and premiums move even higher. Eventually you wind up with New Jersey where the average premium for individual health insurance is 350 percent higher than in California.

So the state’s promise of passing an enforceable mandate to buy coverage along with a mandate for carriers to sell that coverage is critical to the overall health care reform package.

One of the tenants of the California of Health Underwriters’ Healthy Solutions health care reform plan is that the state should demonstrate it can meet its current obligations before making new promises. Unfortunately, to date, the state has failed in this regard. As the Healthy Solutions document notes, as many as a million Californians are eligible for state-run health care programs, yet fail to enroll. According to the California Health Interview Survey, 447,000 children are eligible for, but not enrolled in, state health programs. Healthy Solutions calls on the state to first enroll this group before creating new programs.

It seemed the state was going to do just that. Earlier this year the Governor held a press conference at the Northeast Valley Health Corp clinic in the San Fernando Valley promising additional state funds to support enhanced outreach.  According to the Los Angeles Daily News, the commitment was so firm nonprofit health clinics and local government agencies had already increased staff to bring many of those 447,000 into the state’s Healthy Families and MediCal programs. Yet, as part of the deal to pass a budget, an estimated $66 million was cut, resources which health advocacy groups told the Daily News would have enrolled about 100,000 children during the current fiscal year. The Northeast Valley Health Corp had hired nine people in April for this effort. At least half will now be let go and the others reassigned.

So, here’s what we’re about to witness: Legislative Leaders and the Governor will announce plans to expand eligibility for Healthy Families and MediCal. They’ll promise to enforce a requirement for all Californians to obtain health care coverage and offer premium subsidies to those in households with less than 400 percent of the Federal Poverty Level. At roughly the same time, the Northeast Valley Health Corp will be laying off roughly half of the nine people it hired in April to expand outreach to children and reassigning the rest.

This strikes me as a credibility problem of near Lyndon Johnson-like proportions. As CAHU suggests, the state needs to keep its current promises before making new ones. Yet the budget fiasco of 2007 demonstrates this may be beyond its ability.

At the very least all of this should (but won’t) give advocates of single-payer programs pause. After all, it’s a pretty bad omen when a liberal Legislature and a moderate Governor fail to reach out to 100,000 kids. Imagine what might happen when the pendulum swings to a conservative state government. And the pendulum always swings.