Tuesday, September 25, 2007

10 Questions for HillaryCare

With considerable fanfare, Sen. Hillary Clinton unveiled her latest stab at health care "reform" last week with her American Health Choices Plan (AHCP). The plan would require all Americans to purchase health insurance, and purports to offer choice between one's existing coverage or either the Federal Employees Health Benefits Program (FEHB) or a public plan similar to Medicare. It aims to provide universal coverage for all Americans, while requiring no new revenue (except a few dineros from those rich folk who benefited from George Bush's tax cuts.)

Any plan with this ambitious a scope merits a great deal of scrutiny, and such shall be provided from this quarter. Beyond questioning the wisdom of the idea of government-sponsored health care in the first place, there is benefit in examining the specifics of this particular iteration of "(pre)socialized medicine."

1) Census Bureau data inform us that of the 46.9 million people without health insurance in 2006, approximately 10.2 million are non-citizens (with approximately 8.0 million of them being Hispanics.) And of those 38 million American citizens who lack health insurance,
only 8.77 million are at or below the poverty level. Wouldn't it be more cost effective to simply raise the Medicaid income restrictions such that these people could qualify for free care?

1a) What will this plan do to remove the nearly 2.0 million Hispanic non-citizens currently receiving Medicare and Medicaid from the dole (a
nd wouldn't it be cheaper to build a fence along our southern border?)

2) The AHCP provides for a public plan option that would be similar to Medicare. Given Medicare's notorious inability to contain costs or encourage innovation, how would this contribute to the goal of modernizing health care delivery?

3) HillaryCare promises to provide $35 billion in health care expenditure savings by "apply[ing] technology and clinical best practices to improve quality, reduce errors, and eliminate expensive waste." How would this plan eliminate such waste when HMOs, pharmacy benefit managers and established bureaucracies like the Centers for Medicare and Medicaid Services haven't been able to manifest similar savings, and how much additional spending would be required to reap these savings? (And how will "overpayments" to HMOs and other managed care plans be targeted?)

4) Speaking of bureaucracies, Ms. Clinton's plan pledges that no new bureaucracy will be created with this plan. Does her plan account for the cost of additional bureaucrats that would be required? (Especially those of the "May I please see your insurance card" variety.)

5) The plan proposes that most taxpayers would receive a net tax cut, but that households making over $250,000 would have their income taxes "returned to pre-Bush levels" (i.e.: a top tax rate of 39.6 percent) to provide revenue for the plan. Would this income ceiling be adjusted to reflect inflation or regional variances in the cost of living?

6) Under the plan, high-income households will also lose their employer health premium tax exemption for the portion of their plan that is "in excess of the typical Health Choices Menu plan." How is "high-income" defined for the purposes of the plan, and how does Ms. Clinton intend to keep this from becoming a stealth tax on those workers who forgo higher base salaries in lieu of more generous health benefits?

7) HillaryCare pledges to reduce premium costs, while providing so-called "guarantee issue" irrespective of current health status or pre-existing conditions, as well as automatic renewal and prohibitions on premium variances based on age, gender or occupation (but not race apparently.) How will insurers minimize differences in premiums and simultaneously maintain both actuarial fairness and financial soundness?

8) Large employers will be required to provide health insurance for their employees or "make some contribution to the cost of coverage." As it is, health care expenditures add tremendously to the cost of goods and services (e.g., over $1,700 is tacked on to the cost of every car and truck that General Motors builds.) How would Ms. Clinton's plan reduce the overall health care cost burden for businesses competing internationally?

9) Small businesses that
provide "quality coverage" will be given a tax credit that can be structured as a traditional health plan. (Of course, President Clinton would need to work with small businesses to "design the parameters of the credit.") Given that small businesses account for most of the new jobs created since 1990, how would the AHCP avoid negatively impacting the ability of small businesses to hire new workers, and the economy more generally?

10) Individuals will receive a tax credit
that is intended to prevent premiums from exceeding a percentage of family income. How will the percentage be determined, and will it fluctuate based on household income, family size and/or structure or the consumer price index? (And will the credit be provided even if plan participants purchase insurance outside their state of residence?)

Anyone who has any meaningful experience with health care administration would attest to the fact that no single plan can provide the maximum choice of plans and providers along with reasonably immediate access to care and minimum cost. To promise such a thing would be like committing to drive three cars simultaneously, with each car going in its own direction. But Ms. Clinton's plan seems to promise exactly that, although not in so many words. What becomes clear from the words that she does use is that her plan does not deal with the one of the biggest component of health care expenditures: namely, providing expensive, technology-driven end-of-life care.

Nor does Hillary seem to perceive the difference between health coverage and health care in general. As discussed elsewhere, nations that have experimented with widespread government-subsidized health care have seen their aspirations founder on the on the craggy coasts of budgetary realities.

For when any necessary good or service is stripped of its cost, it is also robbed of its value, and consumption will invariably exceed supply. This is reflected in the rationing of health care that has been seen in Canada (where in 2003, 1.2 million Canadians were unable to find a primary care provider and where a doctor sued the government of Quebec, alleging that the province's health care regulations were illegally restrictive), and elsewhere.
Even those who whole-heartedly support Ms. Clinton's plan must admit that the problem with our current system is not access to care so much as it is the cost and cost-efficiency of delivery of health care. Beyond tinkering at the margins, the only way that governments can truly deliver health care cost savings is to ration the amount of care that is actually delivered. To implement any sort of government plan would take us further away from the goal of improving health outcomes for all Americans.

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