Unlearned Lessons: HillaryCare II

Posted: Oct 05, 2007 2:40 PM
Unlearned Lessons: HillaryCare II

The year was 1993. Israel and the PLO signed an agreement on the White House lawn that, we were told, would lead to a lasting peace. Islamic terrorists tried to blow up the World Trade Center. When they were finally convicted, the federal government claimed an important message had been sent to terrorists everywhere: Stay away from the USA. The president also ordered the bombing of Iraq that year, to send another important signal that misbehavior in Mesopotamia would not be tolerated. On the home front, the president put his wife in charge of overhauling the health care system.

Well, considering this boffo record of success, it seems only fitting that Sen. Hillary Clinton would head back to the health care well.

To paraphrase William Faulkner: History isn’t dead; it’s not even past. This time around, though, Clinton claims history isn’t repeating itself with her new health care plan. Far from it: She has learned from her mistakes, and she’s “got the scars to prove it.” This time Clinton — as well as several of her primary opponents — proposes “flexible” reforms that would preserve consumer “choice.” This is supposedly the grand lesson Clinton learned from her many political scars: People don’t want government-run health care.

But she might want to study her mistakes a bit more closely because her alternative is to provide government-run health insurance, which ultimately is the same thing. Clinton’s plan would yank insurance regulation from the states and impose a series of federal mandates on employers, individuals and insurance companies. Insurers would have to cover anybody who knocks on their door. Individuals would be required by law to have health coverage, just as drivers are required to have auto insurance. Clinton claims she would make her system affordable by regulating both premiums and benefits, offering tax breaks and subsidies to the poor and middle class, and by offering a fallback government-run plan that would compete with the private plans. The Democrats insist this doesn’t amount to government-run health care, but it would be more honest to say that it doesn’t amount to government-run health care right away.

First of all, forcing people to buy health insurance whether they want to or not is somewhat at odds with the idea that her plan champions “choice.” More important, forcing companies to cover everybody means the risk pool for insurance companies gets riskier and, hence, more expensive. Costs would rise, and so young healthy people would rationally opt for as little coverage as possible, because presumably bare-bones coverage would be much cheaper.

Boosters of these plans claim that the healthy “competition” between the government and the private sector would drive prices lower. But how, exactly, can private companies compete against a government plan that cares nothing about making a profit? Because there’s no free lunch, the government costs would have to be made up elsewhere — through higher taxes and mandated higher premiums for people who can afford their own health insurance.

In states where such plans have been tried, such as Kentucky and Washington, the response by the private insurance companies has been a Monty Pythonesque “Run away! Run away!”, leaving behind pretty much only single-payer systems and angry customers, patients and voters. This is the model Clinton et al. want to impose at the national level. Indeed, John Edwards boasts that “over time,” his plan “may evolve toward a single-payer approach.” That single payer is you, Mr. Taxpayer.

Democrats may have invented new bells and whistles, but their thinking hasn’t changed much since 1993. Back then, they believed there was a “health care crisis,” and the solution required big-footed feds to stomp all over the existing system. What they didn’t take into account is the fact that millions of Americans were satisfied with their health care. The Democrats’ response now is to say, “but you can keep your doctor.” That’s nice, but it still misses the point.

Today, among the insured — a group far larger and more likely to vote than the uninsured — people actually like the status quo. A recent Kaiser Foundation poll on health care found that 88 percent of those with insurance thought their coverage was good or excellent while 93 percent were happy with their quality of care. And 64 percent said they were happy with their health care costs. Meanwhile, a recent Gallup Poll found that trust in the federal government is the lowest ever recorded. This is not quite the kindling for revolutionary change many liberals think is out there.

The GOP understands this. As Yuval Levin of the Ethics and Public Policy Center recently noted in the Weekly Standard, the Republican candidates as well as the White House have collectively pushed a number of reforms that would expand consumer choice without necessarily expanding government. By changing the way health care is taxed and using government purchasing power more efficiently, they aim toward decoupling the New Deal-era system of using big business to provide health care. Some propose following what Mitt Romney did when he was governor in Massachusetts and offering subsidies to those who can’t afford insurance.

None of these plans is perfect, but all recognize that the federal government cannot simply impose a solution without creating the sorts of problems that plague all other single-payer systems — rationing, long lines and ever-higher taxes. Moreover, these approaches are probably more appealing to the vast swath of voters who don’t live inside the Democratic bubble.

And that’s the irony of Hillary Clinton’s claim to have learned so much from her last failure, which cost Democrats the Congress and largely hobbled the liberal aspirations of the her husband’s presidency. If the most famous champion of nationalized health care in U.S. history wins the nomination and voters start paying attention, they might easily conclude that Hillary and her party haven’t learned anything at all.

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