Stossel v Hillary on Health
by John Goodman
 If you missed John Stossel's recent 20/20 program, you missed the best
documentary on health care I have ever seen. The best scene: in Canada,
a dog gets his MRI scan in one hour; people wait six months!
A few days later, Hillary Clinton finally released her health plan.
There are lofty goals, but not many specifics. She must have missed the
documentary.
Thirty years ago Michael Dukakis campaigned for president with the
boast, "I have insured everybody in Massachusetts." Of
course he hadn't, and three decades later, everybody in Massachusetts is still not insured. Along the way there have been many other
plans to create "universal coverage." They haven't
worked either.
This is why candidates don't get any points from me for "the
thought was there." Universal coverage at a minimum
requires a credible plan. So far, no presidential candidate has
come up with one, unless you count Dennis Kucinich's plan to
give health care away for free to everyone.
Here are a few principles politicians tend to overlook.
1. Employer mandates don't work. Hawaii has had an
employer mandate for more than 30 years; and the uninsurance
rate in Hawaii is higher than in several states that have no
mandate. A mandate is a tax on labor. Employers
respond by economizing on labor as well as by turning to part
time and contract workers. Pay-or-play mandates (insure
your employees or pay a fine) have the same effect.
2. Individual mandates don't work. All but three states
mandate auto liability insurance. Yet the national
uninsurance rate for drivers is only a point or two below the
national uninsurance rate for health. Two Canadian
provinces require a nominal premium to enroll in Canada's
Medicare. The uninsurance rate in those provinces is in
the neighborhood of 4% to 5%.
Even if health insurance is absolutely free, mandates are
unlikely to work. Up to 14 million people (almost one-third
of the uninsured) are eligible for Medicaid or S-CHIP, but
have not bothered to enroll.
3. A mandated benefit package only makes things worse.
Health insurance mandates almost always specify a
package of benefits that people must buy. The problem
here is the cost of the package is going to grow at twice the
rate of people's incomes. So the mandate will absorb an
increasing share of family income or require increasing tax
subsidies. Things are made even worse as special
interests lobby to include particular services and procedures
in the package.
A much better alternative to a defined benefit,
by the way, is a defined contribution requirement. The
government could, for example, require people to spend $X on
health insurance or pay $X in taxes, leaving cost control and
the content of benefit packages to the market.
4. Insurance in name only is not universal care. The
most important barrier to care for low-income patients is not
lack of insurance or price rationing. It is rationing by
waiting. Further, the uninsured and Medicaid and S-CHIP
enrollees often get care from the same doctors and the same
facilities. Indeed one reason why so many eligible
people fail to enroll in government insurance plans is that
enrollment often doesn't expand access to care.
5. Pay or play for individuals is not enough. Making
individuals pay more in taxes if they are uninsured is not
unreasonable. In fact, we do that already under federal
income and payroll tax laws. But as Massachusetts is
currently finding out, many people will pay the fine and
remain uninsured anyway.
6. The NCPA's universal coverage plan is a reasonable
solution. Fifteen years ago, Gerry Musgrave and I sorted
through all this in Patient Power. Our idea combines all
tax and spending subsidies into a single, simple policy.
The government offers every person a subsidy of $X. If
you buy health insurance, you get the $X as a refundable tax
credit. If you are uninsured, the $X goes into a safety
net institution in your neighborhood just in case you, and
others like you, cannot pay your medical bills. A link
to the latest exposition of the plan is below.
For the past decade and a half, the orthodox conservative response to
Hillary Care has been Hillary Lite. The left says, "The
problem is that there is too little health insurance." The right
says, "You are right, that is the problem; we just don't want as
much insurance as you want."
But there was something unique about Stossel's program. It was clear
that insurance is neither the main problem, nor the main solution.
Instead, the focus was on the market for medical care--on the value of
empowering patients and letting providers compete for them.
Get the DVD. View it. Share it with friends. Send copies to Senator
Clinton and the Republican Hillary-liters.
John Goodman is president of the National Center for Policy Analysis, an
independent public policy institute not affiliated with
any other organization, trade association or corporation.
For Sen. Clinton's summary of her own plan, go to: http://www.hillaryclinton.com/feature/healthcareplan/summary.aspx
To get a DVD of Stossel's 20/20 program go to: http://abcnews.go.com/2020/Stossel
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