Rich Lowry

When it comes to health care, Hillary Clinton is never going to let her name be associated with the words "radical overhaul" ever again. Or, if she can help it, with massive bureaucracy or new taxes. That's what happened in 1993 with her health-care plan as first lady, and, as she never tires of saying, she has "the scars to prove it."

HillaryCare 2.0 is an entirely different enterprise, or so she would have us believe. It's the "American Health Choices Plan." It "builds on the current system to give businesses and their employers greater choice of health plans," while imposing "no overall increase in health spending or taxes." It's the all-things-to-all-people, sweetness-and-light, all-benefits-and-no-costs health-care plan of 2007.

It's also a sign of how she has wised up since her famous debacle early in her husband's first term. For a liberal seeking to expand government-run health care, it's not necessary to create new, elaborate governmental mechanisms that are vulnerable to parody and frightening to voters. Simply building on the status quo is enough to hasten us toward national health insurance.

That's because we have a hybrid system of private insurance and government health care that is increasingly tilting toward government. As the conservative writer Ramesh Ponnuru points out, only 12 percent of health-care costs are paid out of pocket, and the government already pays almost half of health-care costs. Liberals need only push this system toward its logical conclusion.

Because the private health-insurance market doesn't function properly, the government is left to pick up the pieces. But it is government policies that distort the health-insurance market in the first place. Ideally, people would pay for their own health insurance, the way they do with, say, auto insurance. But the tax code favors insurance that people get through their employers.

This creates all sorts of problems. Because employers pay for their insurance, for most people the costs of health care are essentially hidden. They have no incentive to shop around for cost-effective plans. Meanwhile, when people lose their jobs, they tend to lose their insurance -- exactly when they probably need it most.

This creates an expensive system that's anxiety-inducing for people who worry about losing their insurance. The way the system is set up makes it difficult and expensive for individuals to buy insurance, which is one reason why 47 million Americans are uninsured.

Clinton's plan would make this ramshackle system worse. She proposes more regulations on insurers and a mandate on large employers to provide insurance coverage or pay a tax. The regulations will make insurance even more expensive, while the employer mandate would only augment the current senseless system of people getting insurance through their jobs.

This means that the private-insurance market would, in all likelihood, continue to break down. And, of course, government will be there to keep increasing its market share. As Michael Cannon of the Cato Institute points out, Clinton proposes widening the availability of every government health-care program at hand -- Medicare would be extended to the nonelderly; the S-Chip program for poor children would be extended to the middle class; and the Federal Employees Health Benefits Plan would be extended to all. And all without the taint of a "radical overhaul."

Back in 1993, the burden of proof was on Clinton to prove the necessity of her health-care ideas. Now, the burden of proof has probably shifted to her opponents, and she benefits from the fact that Republicans have endorsed some of her specific proposals (including an "individual mandate" that everyone get insured). In short, she re-enters the health-care debate from a position of strength.

Lately, Republicans like President Bush and Rudy Giuliani have gotten into the game, offering forward-looking ideas to try to create a health-care market where individuals can buy their own insurance. That would be the best health-care reform, but HillaryCare 2.0 looms, more cautious and therefore more plausible than her first act.


Rich Lowry

Rich Lowry is author of Legacy: Paying the Price for the Clinton Years .
 
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