Académique Documents
Professionnel Documents
Culture Documents
Executive Summary
In 1992 Gov. Bill Clinton of Arkansas unseated approaches similar to those of the failed Clinton
incumbent President George H. W. Bush in part by health plan. Like the Clinton health plan, they
tapping voter dissatisfaction with the rising cost of misdiagnose what ails the health care sector;
health insurance and the growing number of would attempt to direct the provision of health
Americans without health insurance. Despite a care from Washington, DC, through increased
massive legislative campaign directed by then–first taxes, government spending, and bureaucratic
lady Hillary Rodham Clinton, the Clinton admin- control; and would magnify the perverse incen-
istration’s sweeping proposal to increase federal tives created by past government interventions.
control over the health care sector languished and Like that of the Clinton health plan, their
eventually died in Congress. Today, with health response to the use of unconstitutional govern-
insurance costs once again rising at double-digit ment power in the health care sector is to wield
rates and the number of uninsured Americans at a even more unconstitutional power.
new high, the Democratic candidates for president The five major candidates (Clark, Dean,
have lined up their own health insurance reform Edwards, Kerry, and Lieberman) would take incre-
proposals. The major candidates are Army Gen. mental steps toward a government-run health
Wesley Clark (ret.), former governor of Vermont care system. The two long-shot candidates in the
Howard Dean, Sen. John Edwards (NC), Sen. John race (Kucinich and Sharpton) take a more aggres-
Kerry (MA), Rep. Dennis Kucinich (OH), Sen. Joe sive approach, calling for an immediate govern-
Lieberman (CT), and Rev. Al Sharpton. Before leav- ment takeover. Although Sen. Hillary Rodham
ing the race, Rep. Richard Gephardt (MO) also put Clinton (D-NY) disappointed many Democratic
forward a major health care proposal. Party faithful by forgoing a race for president this
Unfortunately, the candidates’ health plans year, judging by the health care proposals of the
reflect the same misconceptions as and rely on current field, her influence is being clearly felt.
_____________________________________________________________________________________________________
Michael Cannon is a senior fellow with the National Center for Policy Analysis in Dallas.
In America’s Introduction preferences. Denied the necessary informa-
health care sector, tion, consumers and producers are less able
Americans endure rising health care costs, and willing to circumvent waste, inefficiency,
government diminished access to health care, and high and high prices. Controlling health care costs
blocks the market levels of frustration as a direct result of and improving patient satisfaction require
health insurance being among the most gov- reforms that bring consumers’ preferences to
process by hiding ernment-dominated sectors of the U.S. econ- the fore by removing government’s prefer-
prices from omy. Instead of a market where health care ences—by deregulating health insurance and
patients, thus providers and patients benefit each other and restoring incentives for patients to demand
society by pursuing their self-interest, gov- value.
encouraging ernment involvement in health insurance The health plan proposed by President
patients to markets has given America a system that sub- Clinton in 1993 would have taken America in
consume more stitutes waste for economy, rising prices for the opposite direction. Government would
affordability, and bureaucratic dictates for have encouraged patients to consume more
care and demand consumer choice. medical care and demand even less value,
less value. In a free market, consumers and produc- sending more distorted signals to producers
ers make voluntary exchanges that benefit through greater use of price controls. The
both parties. In a genuinely free market, con- information necessary to promote health
sumers motivated by their own self-interest care quality and eliminate waste would have
will naturally make decisions that reward the been even more severely restricted.
most efficient producers, while punishing Although the details of their proposals
inefficiency and high prices. As a result, pro- differ, the Democratic candidates for presi-
ducers search for less costly ways of meeting dent in 2004 are all basically following the
consumer needs. In that environment, prices approach of the Clinton health plan. They
convey information. They signal to con- would expand “coverage” with vast subsidies
sumers the cost to society of providing vari- and mandates, encouraging Americans to
ous products at different points in time. To consume even more medical care. And they
producers, prices convey information about would empower others—employers, insurers,
what consumers want, helping them identify and government bureaucrats—to tell con-
activities useful to consumers and avoid sumers when they have had enough.
unwanted activities. Over time, this process The candidates’ plans reflect a consensus
makes an ever-increasing number of prod- among many observers that rising health
ucts, of ever-increasing quality, available to care costs must be remedied with additional
an ever-larger number of consumers. regulations and subsidies, that the problem
In America’s health care sector, govern- of millions of Americans who lack insurance
ment blocks the market process by hiding must be addressed by doing whatever
prices from patients, thus encouraging expands “coverage.” That is understandable.
patients to consume more care and demand Many people who would like to purchase
less value. This denies patients information health insurance find it priced beyond their
on how their actions affect others, a necessary means, and once one is “covered” many med-
component of controlling costs and eliminat- ical expenses are passed on to someone else.
ing waste. At the same time, it denies produc- This analysis is a misdiagnosis of the prob-
ers information about what consumers value lem. Health care costs and the number of
most. Rather than let producers be guided by uninsured continue to rise, not for lack of
prices that reflect consumer preferences, gov- government, but because too much govern-
ernment distorts prices or sets them arbitrari- ment has crippled the normal market
ly. This encourages producers to pursue law- processes that make health care of ever-
makers’ preferences instead of consumers’— improving quality available to an ever-larger
and to lobby for prices that reflect their own share of the population. The candidates’ pro-
2
posals would add even more government to underestimated future spending on govern-
the mix. ment health programs and other entitle-
How much more? Between 2005 and 2013, ments.4 Gail Wilensky, who administered
the candidates’ proposals would cost any- Medicare and Medicaid for President George
where from $591 billion (Edwards) to $6.268 H. W. Bush, said of the new Medicare pre-
trillion (Kucinich). To put this in perspective, scription drug benefit:
consider that the prescription drug entitle-
ment, recently enacted as part of Medicare If history is any guide, it will cost more
reform and considered the largest new govern- than we think. . . . Not because people
ment program since the Great Society, is esti- are deliberately low-balling the esti-
mated to cost only $410 billion1 (Figure 1). mates, but because we have never been
Financing any of the proposals would require able to correctly estimate the cost of a
the next president to repeal all of the tax cuts new benefit, and this one is much big-
enacted in 2003 ($140 billion from 2005 to ger than most.5
2013) and a significant portion of the tax cuts
enacted in 2001 ($1 trillion from 2005 to For example, when Medicare was enacted,
2011).2 The U.S. Department of the Treasury hospital costs were projected to be $9 billion
Between 2005
estimates that repealing the 2001 and 2003 in 1990. Actual spending in 1990 was more and 2013, the
tax cuts would raise taxes an average of $1,544 than $66 billion.6 There is no reason to candidates’
for more than 100 million Americans and cost believe the costs of the candidates’ health
a married couple with an income of $40,000 insurance proposals will be lower than pro- proposals would
and two children $1,933 annually.3 At least jected; there is ample reason to believe they cost anywhere
two of the proposals would require further tax will be higher.
increases. Government spending on those proposals
from $591 billion
The proposals are likely to cost much would compound the enormous budgetary (Edwards) to
more than projected and would add to an pressures of existing federal entitlements. $6.268 trillion
already growing burden on taxpayers. Cost The present value of the future fiscal imbal-
projections have repeatedly and famously ance of Medicare and Social Security alone is (Kucinich).
Figure 1
Estimated Costs of Democratic Candidates’ Health Insurance Reforms (2005–13) vs.
New Medicare Rx Entitlement (2004–13)
$6,268
$1,500
$1,250
$959 $972
$1,000 $775 $796
Billions
$750 $591
$410
$500
$250
$0
Rx Benefit Edwards Lieberman Clark Dean Kerry Kucinich
3
estimated to be more than $43 trillion before
the new prescription drug benefit is added.7 Remembering the Clinton
Under current law (again before adding the Health Security Act
cost of the new Medicare benefit), Social
Security, Medicare, and Medicaid will con- In 1993 a Clinton administration task
sume nearly 80 percent of federal spending force, directed by First Lady Hillary Clinton,
by 2040.8 In addition to placing new duties devised and proposed a sweeping reorganiza-
on taxpayers, the candidates’ health propos- tion of America’s health care sector. The
als would make existing obligations greater Clinton health plan would have increased
by subjecting Medicare and Medicaid to government controls and exacerbated trends
greater medical inflation. of rising costs and waning consumer sover-
The cost of those proposals, however, eignty.
would go well beyond federal outlays. Each Under the Clinton Health Security Act,
would impose hidden costs on employers and the power of individuals to make countless
workers and lead to greater state government choices about their health care would have
spending. The costs include dampened eco- been handed over to government, and the
nomic growth resulting from higher tax rates. few remaining market mechanisms that con-
People who oppose the influence of money tain costs and promote quality would have
in the political process will find much to dis- been lost. The federal government would
like about the candidates’ health insurance have compelled all Americans to buy health
proposals. Each would increase government coverage, dictated what type of coverage they
control over the health care sector and with it would receive and where they would “pur-
the amount of money spent to influence how chase” it, set prices for coverage and medical
government exerts that control. By conserva- services, and encouraged states to form their
tive estimates, health care interests spent more own single-payer health care systems.
than $600 million on political contributions Commenting on the Clinton health plan, The
and lobbying activities in the 2001–02 election Economist wrote,
cycle.9 Health professionals make the second
highest contributions to congressional cam- Not since Franklin Roosevelt’s War
paigns.10 Health care groups ranked second in Production Board has it been suggest-
terms of dollars spent on lobbying activities in ed that so large a part of the American
The cost of 2000.11 The health care industry’s interest in economy should suddenly be brought
government is a direct result of government’s under government control.12
the proposals, influence over the health care sector. Under
however, would any of the candidates’ proposals, health care Though it might have left some private
go well beyond regulation would increase and with it political health insurance companies standing, the
contributions and lobbying activities of health Clinton health plan would have let govern-
federal outlays. care interests. ment direct the financing of medical care to
Each would Finally, the candidates’ proposals would such an extent that America could no longer
impose hidden expand the federal government’s power far have been said to have a private health care sys-
beyond what the Constitution grants. tem. Rising costs, diminishing quality, and
costs on Fidelity to the Constitution requires reduc- rationing of care would have been exacerbated
employers and ing federal power over the health care sector. in the United States as they have been under
A positive agenda for improving America’s other socialized health systems. Notable fea-
workers and lead health care system would focus, not on the tures of the Clinton health plan follow.
to greater state candidates’ paper guarantee of “coverage,” but
government on restoring the market processes that make Compelled Behavior
health care of ever-improving quality available The most draconian aspect of the Clinton
spending. to an ever-greater share of the population. health plan was its mandates on individuals
4
and employers. The federal government no “right” package of benefits. Individuals Under the
would have compelled Americans to pur- have different preferences when it comes to Clinton Health
chase health insurance whether they wanted health insurance, just as they do when it
it or not, forced employers to pay 80 percent comes to doctors, cars, and clothes. Imposing Security Act,
of the cost, and subsidized premiums for the same coverage on everyone means many the power of
low-income individuals and small employers. people will be forced to purchase benefits
The option to decline health insurance cover- they do not want. For example, the Clinton
individuals to
age would have become a right no American health plan would have required Americans make countless
could exercise, and health insurance “premi- to buy coverage for elective abortions.14 choices about
ums” a tax few could avoid. In 1993 David Declining unwanted, government-mandated
Rivkin of the American Enterprise Institute benefits today can be difficult. It may involve their health care
commented on the unconstitutionality of dropping coverage, changing jobs, or even would have been
the individual mandate: moving to another state. However, any of handed over to
those is easier than passing a new federal law
In the new health care system, individu- or leaving the country, which is what would government.
als will not be forced to belong because have been necessary under the Clinton health
of their occupation, employment, or plan. Insofar as a standard benefits package
business activities—as in the case of forces consumers to buy benefits they other-
Social Security. They will be dragooned wise would not, it encourages them to con-
into the system for no other reason than sume more care to obtain some value for the
that they are people who are here. If the money they would rather have spent else-
courts uphold Congress’s authority to where.
impose this system, they must once and In addition to the National Health Board,
for all draw the curtain on the the Clinton plan would have impaneled a
Constitution of 1787 and admit that National Quality Management Council to
there is nothing that Congress cannot develop standards of quality coverage and
do under the Commerce Clause. The care. All health plans would have been
polite fiction that we live under a gov- required to comply with the council’s quality
ernment of limited powers must be dis- guidelines. In effect, the council would have
carded—Leviathan must be embraced.13 substituted its judgments about quality for
those of more than 250 million consumers. It
is certain that such a panel’s judgments
Standard Benefits Package would have delivered quality in some
The federal government would have con- instances and failed in others. Patients
trolled the coverage citizens received. A adversely affected by the council’s judg-
National Health Board would have been vest- ments, however, would not have had the
ed with the responsibility and power to make option of avoiding them. Care could have
billions of decisions that consumers would been delivered only according to the council’s
otherwise have made for themselves. That guidelines.
panel of “experts” would have dictated what
types of health insurance Americans would Price Controls
purchase, how much they would pay in pre- The National Health Board would have set
miums, and how much could be spent on prices and spending levels for the entire health
health care nationwide. care sector. No health insurance premium
The board would have been charged with could have exceeded the average for a geo-
constructing a package of health benefits graphic area by more than 20 percent. Many
that all Americans would have had to pur- observers predicted this price control would
chase. Creating a one-size-fits-all standard end fee-for-service health insurance, severely
benefits package ignores the fact that there is limiting consumer choice. Moreover, the
5
health plan’s premiums would have been the cost of the medical care they consumed,
same for everyone—young and old, healthy encouraging them to demand more care but
and sick—within a politically determined geo- less value. Community rating would have
graphic area. Forcing people with below-aver- encouraged consumption but discouraged
age needs to subsidize those with above-aver- healthy behavior.
age needs would have stimulated demand Not every American would have been
among both groups. The former would have forced into a regional health alliance. Certain
wanted to get the most value for their forced large employers would have been allowed to
contributions, and the cost of coverage and operate their own alliances, though they
care for the latter would have been dramatical- would have been required to conform to the
ly lowered. The board also would have con- same benefits, pricing, and quality standards
trolled spending nationwide by drafting glob- and would have faced other incentives to join
al budgets that dictated how much could be a regional alliance. The Clinton health plan
spent on medical care in a certain geographic also would have encouraged states to launch
area. Global budgets in other nations have single-payer health care programs, under
invariably led to rationing of care.15 which the state would finance medical care
for everyone within its borders. Interestingly,
Another feature Health Alliances federal employees, including members of
of the Clinton Another feature of the Clinton health plan Congress and many of those who drafted the
health plan was “managed competition”: government Clinton health plan, would have been exclud-
would bring together private insurers and con- ed from regional alliances for four years after
was “managed sumers in an artificial marketplace, much like the first Americans were forced to enroll. Had
competition”: the Federal Employees’ Health Benefits Plan. the regional alliances not met the planners’
The Clinton health plan would have created expectations, that would have granted politi-
government state-based “regional health alliances” to serve cally powerful federal workers enough time
would bring everyone within a geographic area, with the to carve themselves out of the alliances per-
together private exception of those working for certain large manently.
employers. The alliances would have been
insurers and operated by state governments or quasi-gov- Higher Taxes
consumers in an ernmental agencies and would have been The Clinton health plan would have result-
artificial market- responsible for enforcing the dictates of the ed in a massive tax increase. The Clinton
National Health Board and the National administration initially estimated its health
place, much like Quality Management Council. Individuals plan would save taxpayers money, though few
the Federal would have been automatically enrolled in people believed that prediction. As one observ-
their regional health alliance and in some er noted at the time:
Employees’ instances automatically assigned to a plan.
Health Benefits Although consumers could have chosen [V]irtually all of the perverse incentives
Plan. among a few health plans, those options of the current system are to be left in
would have been heavily restricted by a stan- place, while the Administration is
dard benefits package, price controls, and expanding coverage for the millions
other regulations. Moreover, third-party pay- who are uninsured. This amounts to a
ment and other perverse incentives would stimulation of demand, combined
have been intensified. The alliances would with a constriction of supply. This is
have created a semblance of competition, but akin to turning up the heat on a pres-
without the economizing incentives that sure cooker, while clamping down on
come from allowing risk-based insurance pric- the lid. At some point, the lid will blow
ing or letting consumers decide how to spend and the costs of the system will sky-
their health care dollars. Consumers would rocket in bigger deficits and even high-
have continued to pay a small fraction of the er taxes.16
6
Under heavy criticism, the Clinton admin- Democratic candidates for president in 2004:
istration was forced to admit the program expanding government health programs; indi-
would cost taxpayers an additional $700 bil- vidual and employer mandates; a standard
lion over five years, and some observers main- benefits package; government quality stan-
tained it would cost significantly more in dards; price controls; health insurance subsi-
higher tax revenue and lower economic dies; exemption of federal workers from rules
growth.17 that govern others; and higher taxes, both
explicit and hidden. One ostensible difference
An Incremental Approach is the proposal to use tax credits to expand
The Clinton health plan was so massive in insurance coverage (Clark, Dean, Edwards,
scope that it collapsed of its own weight. Kerry, Lieberman). Although tax credits have
Since its defeat, supporters of greater govern- the potential to curb third-party payment and
ment control over the health care sector have improve consumer choice through a more
focused on incremental rather than whole- equitable distribution of the tax subsidy for
sale measures. As President Clinton told a health insurance, the tax credits proposed by
group of supporters in 1997: the candidates would do little more than sub-
sidize greater consumption of health care. The
I’m glad I tried to do the health care five leading candidates (Clark, Dean, Edwards,
plan. . . . Now that what I tried to do Kerry, Lieberman) would expand government
before won’t work, maybe we can do it control over the health care sector incremen-
in another way. That’s what we’ve tried tally and subsidize health insurance with
to do, a step at a time, until eventually refundable tax credits. The two long shots
we finish this.18 (Kucinich and Sharpton) would go well
beyond even the Clinton health plan and
One of those steps already has been taken. establish a nationwide single-payer system.
Internal documents from the Clinton admin-
istration’s health care task force reveal the Features Common to All Plans
group considered a number of options for Higher Taxes, Hidden Taxes. The costs of all
phasing in “universal coverage” starting with of the plans for which cost estimates are avail-
children. Phasing in full government control able would far outstrip the cost of the recently
first for children and then later for adults was enacted Medicare prescription drug benefit.
discussed with the task force by a senior aide The least expensive plan (Edwards) would cost
to Sen. Edward Kennedy (D-MA), a longtime a projected 40 percent more in 2013. The most
advocate of a single-payer system.19 In 1997, expensive proposal (Kucinich) would cost
with the help of Senator Kennedy, the nearly 17 times as much.20 The cost estimates
Clinton administration created the State are likely to understate actual government
Children’s Health Insurance Program, which outlays and do not account for additional hid-
expanded government financing of health den costs.
Many features of
care to cover more low-income children. The Financing any of the candidates’ propos- the Clinton
2004 Democratic presidential candidates’ als would require the next president to repeal health plan have
proposals would take the next several steps all of the tax cuts enacted in 2003 ($140 bil-
down this road. lion from 2005 to 2013) and a significant resurfaced in the
portion of the tax cuts enacted in 2001 ($1 health platforms
trillion from 2005 to 2011).21 All of the can-
2004: The Democratic didates have endorsed repealing a significant
of the
Presidential Candidates portion of those tax cuts. Some propose Democratic
additional tax increases. Kucinich would candidates for
Many features of the Clinton health plan impose a 7.7 percent payroll tax to finance a
have resurfaced in the health platforms of the single-payer system. president in 2004.
7
Each proposal Expanding Government Programs. Each provide coverage for some or all workers. The
would give candidate would expand the reach of govern- mandates would be enforced by various tax
ment health programs. Even the incremental penalties.
government expansions of Medicaid and SCHIP pro- Automatic Enrollment and Government
greater power to posed by some candidates (e.g., Dean) rival Monitoring of Insurance Status (Clark, Dean,
the cost of the new Medicare prescription Edwards, Kerry, Lieberman). Several candi-
dictate the type drug benefit. The expansions would increase dates would set up procedures to enroll indi-
and level of the “entitlement” attitude toward health care viduals automatically in government health
health benefits and diminish private-sector coverage. Again, programs or monitor their insurance status,
the proposals of the five leading candidates or both. Status would be monitored through
consumers would would crowd out private health insurance by schools, the Internal Revenue Service, or
receive. as much as 50 percent of the proposed expan- other government agencies. Candidates
sions.22 The proposals of Kucinich and proposing single-payer systems (Kucinich
Sharpton would crowd out the entire private and Sharpton) have not specifically addressed
health insurance industry. these issues.
Price Controls. Each candidate would Tax Credits (Clark, Dean, Edwards, Kerry,
expand the reach of government price con- Lieberman). Several candidates propose sub-
trols by expanding government programs at sidizing health insurance through refund-
the expense of private-sector coverage. able tax credits aimed primarily at low-
Government-determined prices would be income Americans (a concept also endorsed
imposed on more transactions, and the share by President Bush). That all five of the lead-
of prices set by private payers would shrink. ing candidates propose tax reform to
In proposals containing health alliances (see improve health care indicates significant
below), premiums would be community recognition of the tax code’s role in shaping
rated, creating a disincentive for younger and that sector. However, the proposed tax cred-
healthier risks, attracting more expensive its fail to offer consumers true choice or curb
risks, and putting taxpayers on the hook for third-party payment. In effect, many would
the costs of adverse selection. be not tax credits but welfare payments.
Standard Benefits Packages. Each proposal Many are targeted to employers rather than
would give government greater power to dic- individuals and may only be used toward cov-
tate the type and level of health benefits con- erage that includes what in some cases would
sumers would receive. This most obviously be a highly prescriptive standard benefits
would occur in government programs, but package. Credits could be used only for cov-
candidates who would preserve a private erage through an employer, a health alliance,
health insurance market would mandate or a government program. No candidate has
that consumers purchase government- announced—and some have denied—that his
ordained benefits. Some would require cer- proposed tax credit could be used in the indi-
tain types of coverage and measures of quali- vidual market or in conjunction with health
ty, while others would prescribe appropriate savings accounts (see below). Without the
deductibles and copayments. choice of purchasing insurance wherever the
recipient chooses, or the ability to use the
Features Common to Some Plans credit toward health savings accounts, the
Individual and Employer Mandates (Clark, candidates’ tax credits would increase rather
Dean, Edwards, Kucinich, Lieberman). Forcing than limit third-party payments, lead to even
consumers to do what government wants is greater health spending, and invite addition-
particularly detrimental to the goal of deter- al government controls.
mining what consumers want. Several candi- Health Alliances (Clark, Dean, Edwards,
dates would either compel certain individuals Kerry, Lieberman). Nearly all the candidates
to obtain coverage or compel employers to support creating government-sponsored
8
Figure 2
FEHBP Premium Increases vs. Those of Other Employers, 1999–2001
12
10.5 10.2 10.9
9.5 9.3 9.4 9.6
10
7.9 8.2
7.8
8
Percent
6 5.3
0
1999 2000 2001
Sources: Congressional Research Service; Kaiser Family Foundation; and Hewitt & Associates.
health alliances, or purchasing pools, from plans (Figure 2). FEHBP plans are communi-
which individuals or employers could pur- ty rated, which has led to adverse selection
chase coverage with government subsidies and is likely one reason 20 percent of eligible
(tax credits) at government-controlled prices. federal workers decline coverage,24 compared
Though health alliances can give con- to 14 percent of eligible workers in large
sumers a choice of plans, the candidates’ pro- firms.25 As a sign of what would await feder-
posals would do little to improve consumer ally chartered health alliances, Congress has
choice or restore market signals. For example, shown increasing willingness to enact man-
health alliances in themselves do nothing to dates that increase the cost of FEHBP cover-
reduce third-party payment. Moreover, they age.26
would determine the design of the plans, set A flexible, centrally planned government
the premiums and allowable profits, and program such as FEHBP makes better use of
force taxpayers to cover insurers’ losses. market processes than a rigid centrally
Judged against the goals of expanding planned program like Medicare, which With government
health coverage and controlling costs, health makes FEHBP a possible model for Medicare designing the
alliances have come up short. Economists reform. However, a flexible centrally planned
with RAND Health studied statewide health program still makes less use of consumers’
product, setting
alliances in California, Connecticut, and knowledge and market incentives than a pri- its price, and
Florida and found “the alliances did not have vate market, deregulated and divested of gov- paying for it, it is
their intended effects. They did not increase ernment preferences for third-party pay-
the percentage of small businesses that ment. difficult to argue
offered health insurance, nor did they reduce Some candidates claim their health that health
small-group market health insurance premi- alliance proposals would enhance market
ums.”23 Candidates who would fund health competition. However, with government
alliances would
alliances claim they would be modeled on the designing the product, setting its price, pay- be anything but a
Federal Employees’ Health Benefit Plan. Yet ing for it, determining acceptable profit levels government
FEHBP has had no more success controlling for the people who provide it, and in some
the rising cost of insurance than have private cases forcing individuals to consume it, it is program.
9
Gen. Wesley difficult to argue that health alliances would
Clark proposes to be anything but a government program. A Look at the Candidates’
increase taxes, Plans
Reforms Missing from All Plans
compel children Health Savings Accounts. Each of the candi- A description and analysis of each candi-
dates’ proposals would exacerbate the problem date’s health insurance reform proposals fol-
and young of third-party payment. Fortunately, Congress low.
adults to obtain has already enacted real reform that will curb
coverage, provide third-party payment by restoring incentives for Gen. Wesley Clark
patients to be prudent consumers. Army Gen. Wesley Clark (ret.) proposes to
tax credits for Starting in January 2004, health savings increase taxes, compel children and young
low-income accounts (HSAs) became available to most adults to obtain coverage, expand existing gov-
Americans, nonelderly Americans. HSAs combine a tax- ernment health programs, create a new
free savings account dedicated to medical national health insurance purchasing alliance,
and impose a expenses with a high-deductible health insur- provide tax credits for low-income Americans
standard benefits ance policy. Individuals who purchase health to purchase government-approved coverage,
insurance with a deductible between $1,000 and impose a standard benefits package on all
package on all and $2,600—and families with health insur- public and private health plans.28 The Clark
public and private ance deductibles between $2,000 and plan would cost federal taxpayers an estimated
health plans. $5,150—can contribute the amount of the $796 billion over 10 years. By 2013 the Clark
deductible to an HSA. Funds in the HSA plan is projected to cost $174 billion annually
cover expenses up to the deductible tax-free, and to extend coverage to an estimated 31.8
at which point insurance takes over. million currently uninsured individuals.29
HSAs eliminate the tax subsidy’s prefer- Expanding Government Health Programs.
ence for third-party payment (if not the sub- The Clark plan would expand Medicaid and
sidy itself) by allowing consumers to keep SCHIP to cover all children and young adults
whatever HSA funds they do not spend, under age 23 in a family below 150 percent of
which grow tax-free. HSAs thus make con- the federal poverty level, or FPL, (see below
sumers more prudent shoppers for medical for costs and number of newly insured).
care. They further give consumers the securi- Medicaid would be expanded further to
ty to leave an employer plan and purchase cover all adults, including single adults and
coverage that meets their own needs. HSAs childless couples, up to 150 percent of the
let consumers’ spending patterns voice con- FPL, at a cost of $282.1 billion from 2005 to
sumers’ preferences to producers and make 2013, and cover an estimated 11.3 million
available more information about what con- currently uninsured adults. The cost of those
sumers value than any other health insur- expansions would be borne by the taxpayers.
ance reform to date. Health Alliances. The Clark plan would
Regulatory Choice. State lawmakers are create a nationwide health alliance called the
able to enact excessive health insurance regu- Congressional Health Plan modeled on the
lations because they are insulated from com- FEHBP. The Clark plan would also distribute
petition by laws that restrict interstate com- funds to states to create state-based alliances
merce by prohibiting their residents from from which small employers could purchase
purchasing health insurance regulated by group coverage. The cost of providing cover-
more consumer-friendly states. Allowing age to an estimated 1.1 million currently
consumers to purchase health insurance reg- uninsured individuals without access to
ulated by the state of their choice would let employer-provided coverage through the
them decide which regulations are justified Congressional Health Plan is estimated to be
and which are excessive and would discour- $34.6 billion over the 2005–13 period ($5.6
age overregulation.27 billion in 2013).
10
Tax Credits. The Clark plan would intro- tists, health care professionals, health service
duce three types of tax credits to be used researchers, consumers and health econo-
toward health insurance. Each would phase mists”30 that would issue recommendations
out as an individual’s or family’s income rose. on the value of preventive care and the rela-
Parents with incomes up to five times the tive value of different medical interventions.
FPL would receive a tax credit toward the Further, the commission would recommend
purchase of health insurance for their chil- model health coverage designs that would
dren through an employer plan, Medicaid, determine “appropriate” levels of cost shar-
SCHIP, or the new Congressional Health ing and eliminate “excessive” deductibles and
Plan. Adults under age 23 would receive the copayments. “[A]ll federal health programs,
same tax credit to purchase insurance for including safety net providers, would guaran-
themselves. The tax credits and Medicaid and tee that their benefits are comparable to the
SCHIP expansions for children and young Commission’s recommendations.”31 Over
adults would cost an estimated $291.9 bil- time, “adoption of recommended services
lion for 2005 through 2013 ($53.9 billion in could eventually become a prerequisite for
2013) and cover an estimated 13.1 million any type of tax subsidy.”32 The Clark plan
currently uninsured individuals. would initially provide subsidies to promote,
A tax credit would be available to all but eventually would require medical
The Clark plan
adults between 150 percent and 275 percent providers and health insurers to adopt, emulates the
of the FPL to be used toward the purchase of “information and communications technol- Clinton health
employer-provided insurance or coverage ogy such as electronic medical records, com-
through the Congressional Health Plan, at a puter-aided decision tools, reminder systems plan, albeit
cost of $169.6 billion from 2005 through and medication order entry systems.”33 incrementally.
2013, and would cover an estimated 4.9 mil- Insurers that participated in FEHBP
lion currently uninsured individuals. would be required to offer the same health
Workers earning up to five times the FPL insurance products as the Congressional
who left their jobs would receive a temporary Health Plan. Participating insurers would be
tax credit equal to 70 percent of the cost of required to issue coverage to all applicants
coverage under COBRA (Consolidated (guaranteed issue). Premiums in the
Omnibus Budget Reconciliation Act) or cov- Congressional Health Plan would be set by
erage under the Congressional Health Plan the federal government at the average cost of
($17.6 billion over 2005–13; $2.9 billion in insuring all adults age 23 to 64 (community
2013) and provide coverage to an estimated rating). Taxpayer subsidies would cover the
1.4 million currently uninsured individuals. losses of participating insurers.
Government Controls. The Clark plan The Clark plan emulates the Clinton
would require children and adults up to age 22 health plan, albeit incrementally. It would
to have health insurance. Children’s health compel coverage of children and young
insurance status would be monitored by adults. Their coverage status would be moni-
schools and other arms of the government, tored, and failure to comply would result in
including the Internal Revenue Service. Parents greater tax liability. However, people who do
would furnish proof of children’s coverage on not cover themselves or their children already
their income tax forms. Children found not to pay an additional tax today because they
be covered would be automatically enrolled in forgo the tax benefits of employer-provided
Medicaid or SCHIP. Young adults who did not health insurance.
obtain coverage or parents who did not cover The Clark plan also would expand the
their children would pay tax penalties, such as reach of government health programs, there-
the loss of a child exemption. by shrinking the private health insurance
The Clark plan would create a new, per- market. Increasing the eligibility thresholds
manent government commission of “scien- for Medicaid and SCHIP would shift to tax-
11
payers burdens that are already being borne health insurance. For parents and young
voluntarily by consumers and employers. adults, the tax credits would supplement
Furthermore, it would expand the reach of forced spending on health insurance. The
Medicaid payment rates, which would dimin- availability of tax credits for low-income
ish the quality of coverage for those who workers and the CHP for those without
drop private coverage to enroll. access to employer coverage would encourage
The Clark plan’s value commission would employers of low-wage workers to drop cov-
wield powers similar to those of the National erage, shifting even more private spending to
Health Board under the Clinton health plan. taxpayers. Those factors would also further
The commission would have the power to weaken the individual health insurance mar-
dictate what coverage benefits consumers ket, where consumers would receive no tax
nationwide would have to purchase. Its “rec- subsidy, by encouraging flight to the
ommendations” on benefits, including Congressional Health Plan. The tax credit for
deductibles and copayments, would be people eligible for COBRA would offer sig-
imposed on all federal health programs, nificantly less choice than the tax credit cur-
including the new nationwide health rently available for displaced workers. The
alliance. Making compliance with the com- requirement that those programs and private
mission’s recommendations “a prerequisite health plans offer a standard benefits pack-
for any type of tax subsidy” would effectively age would further limit consumer choice in
give the commission the power to set benefits the private market. Moreover, the Clark tax
for the private sector as well. credits would do nothing to curtail third-
The Clark plan’s proposed nationwide party payment or encourage consumers to
health alliance is problematic for taxpayers. demand greater value.
Premiums would be set according to a The Clark plan would expand the reach of
nationwide average of the anticipated health government health programs at the expense
needs of adults aged 23 to 64. For simplicity, of private health insurance. The result would
assume 50-year-olds represent average health be an expansion of third-party payment and
expenditures in this group. With prices for all consumer demand, putting greater inflation-
health plans set at the cost of insuring a 50- ary pressure on medical prices and thereby
Howard Dean year-old, those above age 50 would flock to imposing enormous burdens on taxpayers,
would enact the program while the better risks would not just for the proposed spending but also
explicit and avoid it. Enrollees above age 50 would receive for the increased cost of the obligations
an implicit subsidy encouraging them to already incurred under Medicare and
hidden taxes, consume more care. Enrollees below age 50 Medicaid. By increasing budgetary pressures
expand govern- would be few, but they would face incentives and government control over health spend-
to overconsume care in order to get some ing in both the public and the private sector,
ment health value for the extra premiums they would pay. the Clark plan invites greater government
programs, compel Moreover, since the Congressional Health rationing of medical care.
many large Plan would guarantee coverage at a fixed rate
regardless of health status, eligible individu- Gov. Howard Dean
employers to als would wait until they were sick before Former Vermont governor Howard Dean,
offer coverage to signing up for insurance. All told, the cost of himself a physician, would enact explicit and
all workers, covering likely participants in the Clark CHP hidden taxes, expand government health pro-
will be well above the amount collected in grams, compel many large employers to offer
and impose a premiums, and taxpayers will pick up the dif- coverage to all workers, have government mon-
standard benefits ference. itor individuals’ coverage status and automati-
The tax credits offered under the Clark cally enroll eligible people in government
package on all plan would provide a tax break, and in some health programs, create a national health
Americans. cases a welfare payment, for purchasing alliance, and impose a standard benefits pack-
12
age on all Americans.34 From 2005 to 2013 the viduals’ insurance status through the Internal Under the Dean
Dean plan would cost $959 billion ($148 bil- Revenue Service. Individuals would demon- plan the federal
lion in 2013) and cover an estimated 30.2 mil- strate proof of insurance when filing taxes.
lion previously uninsured individuals.35 Those without health insurance would have government
Expanding Government Health Programs. to either affirmatively opt out of government would monitor
The Dean plan would expand SCHIP and coverage or be enrolled automatically in a gov-
rename it the Family & Children Health ernment health program for which they were
individuals’
Insurance Program. The program would be eligible. Individuals so enrolled would have to insurance status
open to children and adults under age 25 opt out within a certain time period or pay through the
with family incomes up to 300 percent of the premiums to the program.
FPL and cost an estimated $306.2 billion over The Dean plan would impose a number of Internal Revenue
2005–13 ($47.1 billion in 2013). It would also hidden taxes on employers. First, it would Service.
be open to adults between ages 25 and 64 reduce or eliminate tax deductions or federal
with incomes up to 185 percent of the FPL contracts, or both, for large firms that did
($379.1 billion over 2005–13; $58.9 billion in not offer coverage to all employees. Second, it
2013). The current six-month waiting period would require all employer health plans to
for SCHIP participation would be waived for cover dependents through age 24. Third, it
people experiencing a change in employment. would require employers to continue paying
The federal government would fund the their portion of an employee’s health premi-
expansion, which would cover an estimated ums for two months after separation from an
11.4 million currently uninsured children employee if the employee opted for COBRA
and 12.5 million currently uninsured adults. coverage.
Health Alliances. The Dean plan would cre- The Dean plan would create a new Health
ate a national health alliance called the Care Institute to direct cost/benefit research
Universal Health Benefits Program. The UHBP on new medical technologies, examine new
would offer “coverage identical to what mem- ways of financing health care, serve as an
bers of Congress and federal employees get” information clearinghouse, and focus on
through FEHBP36 to all individuals not eligible “implementation, not just research.”38 Next,
for FCHIP, Medicaid, or Medicare ($126.6 bil- the Dean plan would require all insurers and
lion over 2005–13; $20.3 billion in 2013; 3.9 providers to use federally standardized elec-
million newly insured),37 as well as small tronic systems for patients’ medical records,
employers and the self-employed ($100.3 bil- billing, and prescriptions. The Dean plan
lion over 2005–13; $14.9 billion in 2013; would also convene a White House Confer-
800,000 newly insured). ence on Healthcare Effectiveness to make fur-
Tax Credits. The Dean plan would provide ther recommendations regarding health ben-
tax credits to Americans who are uninsured efits and the practice of medicine, again
for six months and who are not already eligi- focusing on implementation of its recom-
ble for FCHIP, Medicaid, or Medicare. The mendations. Health plans in the UHBP
amount of the credit would be the difference would be required to offer a standard benefits
between 7.5 percent of the taxpayer’s adjust- package, much like FEHBP plans. Insurers
ed gross income and the premium of the participating in the UHBP would be required
UHBP standard health plan of his choice. to issue coverage to all applicants (guaranteed
The Dean plan would pay 70 percent of the issue), and premiums would be set by govern-
premium for workers who use COBRA cover- ment at the average cost of insuring all adults
age for more than two months ($46.8 billion aged 23 to 64 (community rating). Taxpayer
over 2005–13; $6.6 billion in 2013; 1.9 mil- subsidies would cover insurers’ losses when
lion newly insured). claims exceeded premiums.
Government Controls. Under the Dean plan The Dean plan would expand government
the federal government would monitor indi- health programs to the exclusion of private
13
health insurance and shift costs from Board, the focus on “implementation” of
employers and workers to taxpayers. Crowd- their “recommendations” lends itself to
out in the UHBP health alliance would be imposition of mandates. As governor, Dean
lessened by the six-month waiting period. once told Vermont’s legislature: “State-
However, crowd-out due to the expansion of passed mandates have contributed about 25
eligibility under FCHIP would be aggravated percent of this year’s increase in insurance
by elimination of the six-month waiting peri- premiums. Many of these I have supported.
od for enrollment by people changing jobs. But this year, I ask the legislature not to pass
Cost projections for the Dean plan do not any additional mandates.”41 As a presidential
include the hidden taxes it would impose on candidate, Dean has already proposed feder-
employers. For example, the mandate that ally mandated medical records, billing, and
employers continue to pay their portion of prescriptions systems. Further, he has
an employee’s health premiums for the first endorsed a federal law that would require
two months of COBRA eligibility would parity between mental health benefits and
impose costs on employers. Workers who opt medical and surgical benefits in private
for COBRA coverage tend to have high med- employer plans that offer both.42 The
ical expenses. In addition, firms’ premiums Congressional Budget Office estimates this
Sen. John would rise because of higher claims costs mandate could increase mental health costs
Edwards’s health resulting from greater use of COBRA cover- in affected plans by 30 to 70 percent, increase
care reform age. Eliminating tax deductions or federal Medicaid and SCHIP spending by more than
contracts for large employers who do not $600 million over 10 years, and increase pre-
plan would offer health benefits to all workers is a tax miums for affected plans by one percentage
increase taxes, that is tantamount to an employer mandate. point or more,43 an increase the Lewin Group
The requirement would apply to all large estimates is enough to cause 300,000
subsidize health firms, whether they currently offer health Americans to lose private coverage.44
consumption benefits or not, though it would fall most The Dean plan would expand the power
through restric- heavily on firms that do not offer coverage. of the federal government and increase
Of uninsured adults who work in large firms, health insurance subsidies, and it would fail
tive tax credits, 71 percent lack coverage because their to expand consumer choice or curb third-
and dictate what employer does not offer it.39 By shifting com- party payment.
health benefits pensation to health benefits, this mandate
would reduce workers’ wages. It would also Sen. John Edwards
consumers must eliminate jobs. More than half (57 percent) of Sen. John Edwards’s health care reform
purchase. large-firm employees who are uninsured plan would increase taxes; compel coverage
because they are ineligible for health benefits of children and young adults through age 21;
are part-time workers.40 Large firms likely monitor their health insurance status;
would eliminate many of those positions and expand Medicare and SCHIP; increase spend-
replace the workers with contract workers ing on Medicaid; create state-based health
from smaller firms not subject to the man- alliances; subsidize health consumption
date. Such a mandate would lend itself to through restrictive tax credits; and dictate
expansion. If shifting to contract workers what health benefits consumers must pur-
thwarted the mandate’s goal of expanding chase, including types of coverage and levels
coverage, lawmakers would likely expand the of cost sharing.45 The Edwards plan would
mandate to include smaller firms. cost a projected $590.1 billion from 2005 to
The Dean health alliance would create the 2013 and cover an estimated 21.7 million
same problems as the Clark health alliance currently uninsured individuals. By 2013 it
(see above). Though Dean’s new federal would cost an estimated $104 billion per
health bureaucracies would have less power year, or nearly twice the cost of the new
initially than the Clinton National Health Medicare prescription drug benefit.46
14
Expanding Government Health Programs. receive a credit equal to 70 percent of their
The Edwards plan would allow individuals COBRA premiums, at an overall cost of $14.9
aged 55 to 64, and younger spouses of billion over the 2005–13 period ($2.1 billion
Medicare beneficiaries, to “buy in” to Medi- in 2013); an estimated 1 million previously
care at a cost of $10 billion from 2005 to 2013 uninsured individuals would be covered.
($1.5 billion in 2013), thus covering an esti- Small businesses with a majority of low-
mated 600,000 previously uninsured individ- income employees would receive a tax credit
uals. SCHIP would be expanded to include all for participating in the new SBSP health
adults, including single adults and childless alliances. (Projected costs and number of
couples, with incomes up to 250 percent of newly insured are included in the child and
the FPL. Adults with incomes up to 100 per- adult estimates.)
cent of the FPL could enroll in SCHIP at no Government Controls. The Edwards plan
cost. Those with incomes between 100 per- would require parents to obtain coverage for
cent and 250 percent of the FPL would con- their children and would require young
tribute to the cost of SCHIP coverage, though adults to obtain coverage up to age 21.
states could reduce contributions for those Children’s insurance status would be moni-
under age 25. The federal government would tored by government. Children would be
make benefits appropriate for adults, elimi- enrolled in government programs automati-
nate waiting periods, and pay all costs of the cally “when they are born, when they register
SCHIP expansion. for school, when they come to health clinics,
Health Alliances. The Edwards plan would or when a parent files a tax return.”47 Parents
subsidize state-based health purchasing who failed to purchase coverage for their chil-
alliances through a new Small Business dren or enroll them in a government pro-
Support Program. The SBSP would help gram would first receive a warning from the
states set up alliances for small employers government. Parents who still failed to cover
and the self-employed to purchase coverage their children would lose unspecified tax
that private insurers would make available to benefits and their children would be “auto-
all participating firms. matically enrolled in the appropriate pro-
Tax Credits. The Edwards plan would gram.”48 The Edwards plan would require
allow three types of refundable tax credits. employers and insurers to offer “affordable”
Families with incomes up to five times the coverage for dependents up to age 25.49 The Edwards
FPL who were not already eligible for The Edwards plan would make tax credits plan would
Medicaid or SCHIP would receive a credit for applicable only to health plans that adopted
coverage either in an employer-provided federal government standards for “high-
make tax credits
health plan or SCHIP. Tax credits could not quality” coverage and “reasonable” cost shar- applicable only to
be used in the individual market. Families ing (copayments and deductibles). Health health plans that
that used the tax credit for employment- plans would be required to provide coverage
based coverage could receive supplementary at least as generous as SCHIP, and specific adopted federal
services from Medicaid or SCHIP. The benefits would be mandated, including age- government
Edwards child coverage subsidies would cost appropriate vaccinations with no copay- standards for
an estimated $240 billion from 2005 to 2013 ments and mental health parity.50 Health
($42.5 billion in 2013) and cover an estimat- plans also would be governed by a “patients’ “high-quality”
ed 8.7 million currently uninsured children. bill of rights” that would codify a federal def- coverage and
Subsidies for adults would total $325 billion inition of what is “medically necessary,” pro-
over the nine-year period ($58.3 billion in hibit certain cost-control techniques, and
“reasonable”
2013) and cover an estimated 11.4 million expose insurers and employers to increased cost sharing
currently uninsured adults. liability. The Edwards plan would require (copayments and
COBRA-eligible workers with family insurers, providers, and patients to use feder-
incomes up to 250 percent of the FPL would ally standardized electronic medical records deductibles).
15
Sen. John for provision of care and billing; that infor- also would be asked to eliminate the five-year
Kerry proposes mation would be stored in a national data- waiting period for legal immigrant children
base. and pregnant women, allow disabled chil-
to expand Like the Clark plan, the Edwards plan dren to remain enrolled when their parents
government would compel children and young adults to begin work, and enroll 95 percent of all eligi-
obtain coverage and use the Internal Revenue ble children in Medicaid and SCHIP. In
health programs, Service and other government agencies to return, the federal government would
create a national monitor compliance. Also like Clark, assume the cost of all children enrolled in a
health alliance, Edwards would develop government stan- state’s Medicaid program and provide states
dards for coverage benefits, including an enhanced federal matching rate for
enact new health deductibles and copayments, and use the tax SCHIP. The Medicaid and SCHIP expansions
insurance code to impose those standards on private would cost the federal government an esti-
subsidies, and health insurance. (Whereas Edwards would mated $502.7 billion from 2005 to 2013—
make adoption of the federal standard bene- 123 percent of the cost of the Medicare pre-
offer states a fits package mandatory for use of a tax cred- scription drug benefit—including $17.4 bil-
“swap” that could it, Clark would condition any tax subsidy on lion in 2013. They would cover an estimated
adoption of the standard benefits package.) 18.1 million currently uninsured Americans.
leave them with The Edwards plan’s restrictive tax credits The Kerry plan also would create a new
larger than could be used only toward employer or gov- federal reinsurance program. A “premium
expected health ernment health plans. Without the option of rebate” program would reimburse employer
purchasing individual coverage or the ability and health alliance plans for 75 percent of
obligations. to curb third-party payment with HSAs, the the cost of employee medical claims in excess
tax credits would merely be a subsidy that of $50,000. The program would cost an esti-
would lead to higher health care costs. mated $288.5 billion from 2005 to 2013
including $50.4 billion in 2013, accounting
Sen. John Kerry for nearly one-third of the cost of the Kerry
Sen. John Kerry proposes to expand gov- plan. The premium rebates would cover an
ernment health programs, create a national estimated 2.1 million workers.
health alliance, enact new health insurance Health Alliance. The Kerry plan would cre-
subsidies and restrictive tax credits, define a ate a nationwide health alliance called the
standard benefits package for all Americans, Congressional Health Plan. Participation
and offer states a “swap” that could leave would be open to all individuals and employ-
them with larger than expected health oblig- ers. Insurers participating in the FEHBP
ations.51 The Kerry plan would cost a project- would be required to offer the same health
ed $972 billion from 2005 to 2013 and cover plans as the Kerry health alliance would offer,
an estimated 26.7 million currently unin- though each would operate as a different
sured individuals. Its expected cost in 2013— pool. The program would cost an estimated
$157 billion—is more than twice that of the $79.1 billion from 2005 to 2013 ($11.5 bil-
new Medicare prescription drug benefit.52 lion in 2013) and cover an estimated 2.5 mil-
Expanding Government Health Programs. lion currently uninsured workers.
The Kerry plan would offer states a “swap.” Tax Credits. The Kerry plan would provide
States would be asked to extend SCHIP eligi- tax credits to small businesses participating
bility to all children in families with incomes in the health alliance for up to half the cost of
up to 300 percent of the FPL, then to all fam- coverage, to individuals aged 55 to 64 ($9.2
ilies with incomes up to 200 percent of the billion from 2005 to 2013; $1.3 billion in
FPL, and, “[o]nce states get back on course to 2013; 600,000 newly insured), and to low-
a more secure financial footing,”53 to all income individuals for premium costs above
adults (including singles and childless cou- 6 percent of adjusted gross income ($39.4 bil-
ples) below 100 percent of the FPL. States lion from 2005 to 2013; $6.5 billion in 2013;
16
1.8 million newly insured). The Kerry plan poorest Americans. In exchange, states would
also would provide workers eligible for assume greater obligations to relatively more
unemployment benefits a tax credit for 75 affluent individuals through SCHIP. Over
percent of the cost of COBRA coverage time, the more affluent SCHIP families likely
($53.2 billion from 2005 to 2013; $7.7 billion would demand, and get, a higher level of care
in 2013; 1.8 million newly insured). than Medicaid families. That would leave
Government Controls. The Kerry plan states with greater obligations relative to those
would automatically enroll children in assumed by the federal government under the
Medicaid or SCHIP at their schools or com- Kerry plan’s “swap.”
munity health centers. To participate in the The Kerry reinsurance program would
Kerry health alliance, large employers would subsidize greater consumption and could
be required to maintain the same contribu- lead to significant litigation. It would provide
tion they currently make to employee health enormous incentives for health plans to pro-
premiums and not segment their employees vide more generous care—health plans would
into the health alliance. Employers who cur- pay only $250 for every additional $1,000 of
rently offer coverage would be required to care above $50,000 in claims. The Kerry cam-
pay an entry fee equal to 10 percent of the paign notes that 0.4 percent of private insur-
firm’s total premiums (to reduce adverse ance claims are above $50,000, yet those
States could end
selection). Health plans would be required to claims account for nearly 20 percent of all up the losers
offer family coverage to domestic partners. claims costs. The Kerry plan’s subsidy of under the Kerry
They would also have to use new federally high-end claims would increase both the
mandated electronic records systems. Health share and the amount of claims above the plan’s “swap.”
plans within and outside the health alliance $50,000 threshold. At the same time, employ-
would be required to offer specific benefits, ers and insurers would be required to demon-
including disease management and mental strate that the savings were passed on to
health parity. To qualify for the new federal workers, with the expectation of savings as
reinsurance program, the Kerry plan would high as $1,000 for a family plan. Insurers and
require employers to provide “affordable cov- employers would be caught between patients
erage to all their employees”54 and to demon- in medical need who would want the subsidy
strate that the savings from reinsurance were passed on to them (knowing that the health
used to reduce workers’ premiums. plan would pay only 25 cents on the dollar
States could end up the losers under the for the treatment they want) and government
Kerry plan’s “swap.” A common feature of bureaucrats demanding the subsidy be
government health programs is that the most passed on to all workers through lower pre-
generous benefits go to the most politically miums. Even if the savings were passed on to
powerful beneficiaries. For example, Medicare workers, that still could result in greater
provides higher quality service and greater spending as employers faced existing and
choice of doctors than Medicaid because enhanced incentives (i.e., small business tax
Medicare’s constituency—senior citizens—is credits for participating in the Kerry health
better organized and more politically active. alliance) to convert the savings into more
Even within Medicare, benefits are allocated generous health benefits.
on the basis of politics. Medicare pays for Though it would have two different pools,
many routine items because routine care is the Kerry plan could reduce choice for feder-
used by many voters. However, Medicare al employees by requiring insurers to offer
leaves beneficiaries responsible for many cata- the same plans in both programs. Like the
strophic expenses because such coverage bene- Dean plan, the Kerry plan’s requirement that
fits fewer voters.55 Under the “swap,” the fed- employers participating in the new health
eral government would assume greater alliance provide “affordable coverage to all
responsibility for Medicaid, which serves the their employees”56 would encourage firms to
17
replace low-wage workers with contract coverage for six months; self-employed,
workers. unemployed, part-time, seasonal, contract,
temporary, and temporarily disabled work-
Sen. Joseph Lieberman ers; workers receiving unemployment insur-
The Lieberman plan would increase taxes, ance and workers eligible for COBRA (for
expand government health programs, create one year); early retirees between the ages of 55
national and state-based health alliances, and 64 without access to employer coverage;
grant restrictive tax credits, dictate a standard stay-at-home moms; small firms (with fewer
benefits package, and impose mandates on than 50 employees and that contribute two-
employers.57 The proposal would cost an esti- thirds of the cost of worker premiums); and
mated $775 billion from 2005 to 2013 ($150 employees of large firms whose health premi-
billion in 2013)—more than twice the project- um contribution exceeds 7.5 percent of
ed cost of the Medicare prescription drug adjusted gross income. States would have the
benefit.58 It would cover an estimated 31.6 option of administering their own
million previously uninsured individuals. MediChoice programs or participating in a
Expand Government Health Programs. federal MediChoice pool.
The Lieberman plan would expand Medicaid Tax Credits. The Lieberman plan would
to cover all individuals with incomes up to grant tax credits to those participating in
150 percent of the FPL (including single MediKids and MediChoice. Families at or
adults and childless couples) and expand below 150 percent of the FPL would receive
SCHIP to include all children and young tax credits equal to 100 percent of their chil-
adults up to age 25 in families with incomes dren’s MediKids premiums. MediKids tax
up to 300 percent of the FPL, low-income credits for families between 150 and 300 per-
pregnant women, and legal immigrant preg- cent of the FPL would be set according to an
nant women and children. The federal gov- income-based sliding scale, with no families
ernment would assume 100 percent of the paying more than 7.5 percent of their income
cost of newly eligible children and would in premiums. MediKids-related tax credits
The Lieberman increase funding to states that enrolled 90 are projected to cost $97.6 billion from 2005
plan would percent of all eligible children. The Medicaid to 2013 ($30.0 billion in 2013) and cover 7.5
expansion would cost an estimated $270 bil- million currently uninsured children.
increase taxes, lion from 2005 to 2013 ($47.7 billion in People eligible for MediChoice would
expand 2013) and would cover an estimated 9.3 mil- receive tax credits toward MediChoice plans
government lion currently uninsured individuals. or private market coverage with the federal
Expanding SCHIP would cost an estimated standard benefits package. The amount of
health programs, $151 billion from 2005 to 2013 ($25.9 billion the credit would be based on the average
create national in 2013) and cover an estimated 7.2 million MediChoice plan premium. Adults earning
currently uninsured individuals. between 150 percent and 185 percent of the
and state-based Health Alliances. The Lieberman plan FPL would receive the full premium amount.
health alliances, would create nationwide and state-based Those earning between 185 percent and 250
grant restrictive health alliances modeled on the FEHBP. The percent of the FPL would have their tax cred-
first, MediKids, would be open to all children its determined on a sliding scale. These
tax credits, dictate and young adults up to age 25. Children eli- MediChoice tax credits would cost an esti-
a standard gible for Medicaid and SCHIP would be per- mated $151.8 billion from 2005 to 2013
mitted to enroll, with the aid of tax credits ($26.1 billion in 2013) and cover an estimat-
benefits package, (see below). ed 3.6 million currently uninsured people.
and impose The second, MediChoice, would be open Workers in small firms who earned below
mandates on to all individuals without access to “afford- 150 percent of the FPL would receive a credit
able, conventional group health insurance,” for the full cost of a standard MediChoice
employers. including those without access to employer plan, and those who earned between 150 per-
18
cent and 250 percent of the FPL would receive losses.”60 Insurers participating in MediKids Rep. Dennis
a partial credit. Tax credits would be adjusted would be required to offer coverage to partic- Kucinich
to ensure that no eligible person would pay ipating children’s families through
more than 7.5 percent of adjusted gross MediChoice. MediChoice insurers would be presents the most
income on health insurance premiums. A new required to provide standardized informa- detailed proposal
KeepCare program would grant eligible work- tion on plan pricing and benefits, as well as a
ers tax credits equal to 65 percent of COBRA standard benefits package: “All policies will
for converting
or health alliance premiums. These tax credits cover pre-existing conditions, prescription America’s health
would cost an estimated $104.9 billion from drugs, and provide comprehensive cover- care sector to a
2005 to 2013 ($20.3 billion in 2013) and cover age.”61 The standard benefits package would
an estimated 4 million people. include mental health parity. government-run,
The Lieberman plan also would provide The Lieberman plan contains many provi- single-payer
enhanced tax deductions for firms that sions seen in other plans. The strength of the system.
extended coverage to part-time and contract Lieberman plan is that it would allow children
workers and would allow individuals to to leave government health programs with a
deduct a portion of their long-term care pre- tax credit (essentially a voucher) good for pur-
miums. chasing private coverage. Unfortunately, the
Government Controls. Children would be credit applies only to children and could be
enrolled automatically in MediKids at birth, used only toward insurance in a government
though parents would have the option of health alliance, where government sets prices,
declining coverage for their child. The dictates benefits, determines acceptable prof-
KeepCare program would require all employ- its, and bears all the risk.
er health plans to continue covering workers
for two months after they left or lost their Rep. Dennis Kucinich
jobs. Firms that offered health insurance yet Rep. Dennis Kucinich presents the most
had more than 10 percent of their employees detailed proposal for converting America’s
eligible for MediChoice—either because the health care sector to a government-run, sin-
employee’s share of the premium exceeded gle-payer system.62 The Kucinich campaign
7.5 percent of the employee’s adjusted gross estimates that the cost of its plan for nation-
income or because the coverage did not meet al health insurance would be $6.1 trillion
the government standard—would face a during the 2006–13 phase-in period and
penalty: they would be required to pay the climb to $1.2 trillion annually in the first year
federal government’s share of premiums for of full implementation (2013).
their employees who enrolled in MediChoice. Expanding Medicare. The Kucinich plan
Insurers participating in the MediKids would expand the Medicare program to cover
program would be required to provide a stan- all Americans. The federal government would
dard benefits package including “compre- be the sole payer for all medical goods and ser-
hensive coverage for preventive care, hospital- vices, and private health insurance would be
izations, prescription drugs, long-term care, abolished. A new Enhanced Medicare for All
all recommended vaccines, and other health program would phase in coverage of the
care services,” as well as government-speci- entire population by age group, starting with
fied limits on out-of-pocket costs.59 Both the children in 2006. By 2013 all Americans
MediKids and MediChoice programs would would be enrolled. The Kucinich campaign
control the prices charged and profits earned estimates that a combination of existing gov-
by, as well as provide reinsurance for, partici- ernment health spending ($1.1 trillion), a 7.7
pating insurers. Moreover, “private insurers percent payroll tax ($917 billion), taxing cur-
would have to agree to limit their profits to a rently untaxed health benefits ($245 billion),
small percentage of their costs, while federal and “existing non-patient revenues” such as
reinsurance will protect against catastrophic “individual donations, foundations, and hos-
19
pital gift shops”63 would finance the pro- marily to tax and regulatory factors and
gram. is not intrinsic to private health insur-
The Kucinich plan would nationalize more ance.65
than one-seventh of the U.S. economy, dimin-
ishing economic growth and the U.S. health The search for ways to control costs would
care sector’s status as a world leader. American inevitably lead to the rationing of care.
patients are already heavily insulated from the Kucinich has announced his intent to limit
cost of medical care. Were the Kucinich plan the amount government pays for prescrip-
to make health care “free,” individuals would tion drugs. Such price controls would make
take less responsibility for their own health existing drugs less available. Worse, it would
and demand for medical care would rise even reduce the profitability of investing in
further. Actual costs would outstrip projec- research and development of new medicines,
tions, requiring a greater tax increase than pro- leading to fewer breakthrough cures.
posed. The economic effects of the required Patients living under nationalized health
tax increase would be severe. Martin Feldstein care systems routinely experience government
estimates that financing entitlement spending rationing. For example, a recent study of
through payroll tax increases would decrease Canada’s single-payer system found that
Though Rev. Al economic productivity and impose costs on patients wait an average of 18 weeks for treat-
Sharpton has the economy equal to two-thirds of the tax ment, a 90 percent increase since 1993.
not proposed a increase.64 In other words, the Kucinich cam- Canadians wait longer for treatment than
paign’s proposed $917 billion tax increase Americans, but not as long as New Zealanders
specific plan for could impose an additional, hidden tax of or the British under their single-payer systems.
reforming health more than $600 billion. The resulting decrease Economists seeking to put a dollar figure on
in jobs and wages would make financing the the cost of waiting have estimated it to be as
insurance, he Kucinich single-payer health system even high as $5,600 per patient.66 Sometimes the
has endorsed more difficult. cost is much higher; it is commonplace for
amending the Eventually, government would be forced patients to die waiting for treatment in single-
to look for ways to control costs. Though the payer systems.67 The suffering is not distrib-
U.S. Constitution Kucinich campaign stresses that administra- uted evenly. In Canada, “a profusion of recent
to create a legally tive costs would be lower under a single-payer research reveals that cardiovascular surgery
enforceable right system such as Canada’s, it is unlikely the queues are routinely jumped by the famous
Kucinich plan would find any savings here and politically connected.”68
to health care. and very likely it would find additional costs. Given the current Medicare program’s
Professor Patricia Danzon has estimated that restrictions on purchasing care privately out-
after accounting for the “deadweight costs” side the program,69 it is unlikely that
of taxation and moral hazard, the overhead American patients waiting for care would be
costs of public insurance programs amount able to access it with their own resources.
to more than 45 percent of claims payments, They would be in the same situation as many
compared to less than 8 percent for private Canadian patients are in today, only with no
insurers: United States nearby to provide high-quality
care to those who are willing to pay.
The rough empirical evidence tends to
confirm that overhead costs in Canada, Rev. Al Sharpton
adjusted to include some of the most Though Rev. Al Sharpton has not pro-
significant hidden costs, are indeed posed a specific plan for reforming health
higher than they are under private insur- insurance, he has endorsed amending the
ance in the United States. Although U.S. Constitution to create a legally enforce-
there may well be waste in U.S. private able right to health care.70 Sharpton has
insurance markets, it is attributable pri- voiced support for a constitutional amend-
20
ment (H. J. Res. 30), authored by Rep. Jesse Despite the lower cost of living in Mexico,
Jackson Jr. (D-IL), which reads: which makes a fixed income go much fur-
ther, many American seniors are reluctant to
Resolved by the Senate and House of retire to Mexico because of the poor quality
Representatives of the United States of of medical care,73 even though such treat-
America in Congress assembled (two-thirds ment would be covered by Medicare.74 As do
of each House concurring therein), That America’s northern neighbors, Mexicans
the following article is proposed as an who can afford the expense travel to America
amendment to the Constitution of the for care.75
United States, which shall be valid to The constitutional guarantee that “all
all intents and purposes as part of the persons are entitled to health protection” has
Constitution when ratified by the leg- not prevented significant inequality in the
islatures of three-fourths of the several way health care resources are allocated by
States: government. During 1999 total per capita
ARTICLE expenditure on health (social security and
general health services) was only 595 pesos in
SECTION 1. All citizens of the United Chiapas, while it reached 2,299 pesos in Baja
States shall enjoy the right to health California Sur. Overall, Chiapas, Oaxaca,
care of equal high quality. Guerrero, and Puebla had the lowest total per
capita expenditure in the country, in spite of
SECTION 2. The Congress shall have having the highest levels of marginality and
power to implement this article by unsatisfied basic needs.76 However, America
appropriate legislation.71 could come closer to achieving equality than
Mexico.
Sharpton is the only candidate to elevate The Jackson amendment would com-
an entitlement to health care to the level of a pound the entitlement dilemma with its
constitutional right. Yet amending the equality mandate. In many single-payer sys-
Constitution will not avoid the dilemma such tems, patients have the option of purchasing
entitlements create by granting one person a private health insurance and paying for care
legal claim on another person’s labor. In the out-of-pocket. The Jackson amendment
case of health care, the entitlement imposes a would likely prevent Americans from pur-
duty on workers through taxes that reduce chasing care outside a government-run sys-
their income and a duty on suppliers (doctors, tem. Its creation of a right to health care of
hospitals, drug manufacturers, etc.) by paying “equal high quality” could leave Americans in
them less for their services than they would the same situation as many Canadians, who
accept otherwise. At the same time, the entitle- are unable to go outside the public health
ment increases the expectations of the enti- care system if that system fails to meet their
tled; each duty imposed discourages the very needs.
behavior—work, curing—that keeps the enti- Whether or not there should be available Sharpton is the
tlement’s promise. health services that are fully provided by the only candidate
Granting Mexicans a constitutional right private sector, outside the public or manda-
to health care has delivered neither quality tory scheme, has been a topic of heated to elevate an
nor equality of care. Despite efforts, reflected debate in Canada. Many people claim that it entitlement to
in the Mexican legislation, to guarantee uni- is a horrible idea to even consider allowing
versal access to health services, the lack of a individuals to attain expedited care outside
health care to
functional health system, with sufficient the rationed public system if they choose to the level of a
human and material resources to effectively spend their own income to do so. Much of constitutional
respond to the needs of the population, con- this argument appears to revolve around the
tinues to be a fact.72 concept of egalitarianism: it is often assumed right.
21
The health care that the poor deserve not only better care amalgamation of even the least harmful
proposals of the than their incomes would provide but the components of the Democratic presidential
same care that the most wealthy in society candidates’ health plans would be a disaster.
Democratic enjoy. Implicit in this concept is that the Enhancing the quality and affordability of
candidates for wealthy should be forced to consume health health care requires replacing government’s
care of a lower quality than their incomes preferences with choice and competition in
president in 2004 would provide. The only standard of care all aspects of health insurance: point of pur-
would further available to anybody should be the standard chase, pricing, benefits, and regulatory struc-
entrench that can be offered for the entire popula- ture. Ideally, government would restore mar-
tion.77 ket incentives to private health insurance
third-party Scarcity dictates that constitutionally markets by dramatically lowering tax rates
payment and have entitling all Americans to the same level of and taxing health insurance premiums and
government health care would diminish rather than medical expenses like other expenditures.
increase health care quality. America’s robust Although such sweeping change is unlikely,
assume even trial bar would hasten this race to the bottom forward-looking reforms have begun to chip
greater control by subjecting any inequities to legal chal- away at the harmful incentives of the tax
lenge. The Sharpton campaign has embraced exclusion for employer-provided health
over the health this eventuality: “If we pass a new health care insurance.
insurance amendment, the next civil rights movement The health savings accounts that take
consumers will emerge fighting for congressional legisla- effect in 2004 will for the first time end the
tion—while also using the federal courts—to federal tax code’s bias toward third-party
purchase. implement the Health Care Amendment.”78 payment. By balancing the tax code’s incen-
Although Sharpton’s health care platform tives to consume care against a new incentive
may be the most far-fetched of any of the can- to save for future medical needs, HSAs will
didates’ proposals, in one sense it is the most make millions of Americans more value-
responsible. Sharpton is the only candidate minded consumers. Consumers demanding
who has proposed seeking constitutional greater value will make their preferences
authority before granting the federal govern- known to producers, weed out waste and
ment greater power over America’s health inefficiency, and help control costs for all
care sector.79 health care purchasers, including employers
and government health programs. HSAs
reflect the lessons learned from decades of
Conclusion government suppression of the market
process in the health care sector. Its successes
Health care costs and the number of unin- will disseminate that knowledge further. A
sured Americans are rising because of gov- better approach than any of the Democratic
ernment promotion of third-party payment plans would be to do nothing and let health
and the fact that nowhere in America can a savings accounts transform America’s health
consumer purchase a health insurance policy care markets and culture.
based solely on his preferences and what an All the knowledge and tools necessary to
insurance carrier is willing to offer. The control costs and improve quality are with
health care proposals of the Democratic can- us, locked inside the minds of hundreds of
didates for president in 2004 would further millions of consumers. Accessing them
entrench third-party payment and have gov- requires putting the federal government back
ernment assume even greater control over within its constitutional restraints by remov-
the health insurance consumers purchase. ing the government’s preferences from the
Each would lead to higher taxes, greater health care sector—little by little if neces-
health care costs, dampened economic sary—and allowing consumers’ preferences to
growth, and greater rationing of care. An direct the market.
22
Spending on lobbying is for the 2000 election cycle.
Notes 10. Center for Responsive Politics, “Top Industries
Giving to Members of Congress: 2002 Cycle,”
1. Cost projections for the Medicare prescription November 3, 2003, http://www.opensecrets.org/
drug benefit are from Congressional Budget industries/mems.asp.
Office, “CBO Estimate of Effect on Direct
Spending and Revenues of Conference Agreement 11. Center for Responsive Politics, “Lobbyist
on HR 1,” November 20, 2003, ftp://ftp.cbo.gov/48 Database.” Spending on lobbying is for the 2000
xx/doc4808/11-20-MedicareLetter.pdf. election cycle.
2. Joint Committee on Taxation, “Estimated 12. “Kill or Cure?” The Economist, September 25,
Budget Effects of the Conference Agreement for 1993, p. 31, quoted in Robert E. Moffit, “A Guide
H.R. 2, The ‘Jobs and Growth Tax Relief to the Clinton Health Plan,” Heritage Foundation
Reconciliation Act of 2003,’” JCX-55-03, May 22, Backgrounder, November 19, 1993, http://www
2003, http://www.house.gov/jct/x-55-03.pdf; and .heritage.org/Research/HealthCare/tp00.cfm.
Joint Committee on Taxation, “Estimated Budget
Effects of the Conference Agreement for H.R. 13. David Rivkin, “Health Care Reform v. the
1836,” JCX-51-01, May 26, 2001, http://www.ho Founders,” Wall Street Journal, September 28, 1993,
use.gov/jct/x-51-01.pdf. p. A19.
3. U.S. Department of the Treasury, Office of Tax 14. Moffit.
Policy, “Effects of Repealing Major Individual
Income Tax Relief Provisions in Both ‘Economic 15. Doug Bandow, “Dangerous Medicine: A
Growth and Tax Relief Reconciliation Act of 2001’ Critical Analysis of the Clinton Health Plan,”
and ‘Jobs and Growth Tax Relief Reconciliation Mackinac Center for Public Policy, April 15, 1994,
Act of 2003,’” June 20, 2003; and U.S. Department http://www.mackinac.org/article.asp?ID=248.
of the Treasury, “Effects of Repealing 01 03 Tax
Cuts,” June 18, 2003. 16. Moffit.
4. See Doug Bandow, “Medicare Expansion and 17. Bandow, “Dangerous Medicine.”
the Mirage of Fiscal Responsibility,” Cato
Institute Daily Commentary, December 4, 2003. 18. “Remarks by President Clinton at Service
Employees International Union Legislative
5. Quoted in Stephen Chapman, “Rx for Bank- Conference, Hyatt Regency Hotel, Washington,
ruptcy,” Washington Times, November 21, 2003. D.C.,” Federal News Service, September 15, 1997.
6. Sue Blevins, Medicare’s Midlife Crisis (Washington: 19. Association of American Physicians and
Cato Institute, 2001), p. 55. Surgeons, “CD-ROM Archive of Association of
American Physicians and Surgeons vs. Hillary Rodham
7. Jagadeesh Gokhale and Kent Smetters, “How Clinton, et al.: Excerpts from Task Force Documents
to Balance a $43 Trillion Checkbook,” American Copied from National Archives,” pp. 539–40,
Enterprise Institute, August 5, 2003, http://www. ftp://ftp.entrewave.com/aaps/TASKFORC.PDF.
aei.org/publications/filter.,pubID.18965/pub_de
tail.asp. 20. Cost projections for the Medicare prescription
drug benefit are from Congressional Budget
8. Chris Edwards and Tad DeHaven, “War Office, “CBO Estimate of Effect on Direct
between the Generations: Federal Spending on the Spending and Revenues of Conference Agreement
Elderly Set to Explode,” Cato Institute Policy on H.R. 1.”
Analysis no. 488, September 16, 2003, p. 5, http://
www.cato.org/pubs/pas/pa488.pdf. 21. Joint Committee on Taxation, “Estimated
Budget Effects of the Conference Agreement for
9. Center for Responsive Politics, “Health: Long- H.R. 2, the ‘Jobs and Growth Tax Relief
Term Contribution Trends,” November 3, 2003, Reconciliation Act of 2003’”; and Joint Committee
http://www.opensecrets.org/industries/indus.asp? on Taxation, “Estimated Budget Effects of the
Ind=H; Center for Responsive Politics, “Lobbyist Conference Agreement for H.R. 1836.”
Database,” November 3, 2003, http://www.opense-
crets.org/lobbyists/index.asp; and Follow the 22. Tanya T. Alteras, “Understanding the
Money, customized search, http://followthemoney Dynamics of ‘Crowd-out’: Defining Public/Private
.org/. According to the Center for Responsive Coverage Substitution for Policy and Research,”
Politics, “All numbers attributed to a particular Academy for Health Services Research and Health
industry can be assumed to be conservative.” Policy, prepared for the Robert Wood Johnson
23
Foundation’s Changes in Health Care Financing Revenues of Conference Agreement on HR 1,” p. 47;
and Organization Program, June 2001, pp. 14–15, and Lyle Nelson, “How Many People Lack Health
http://www.hcfo.net/pdf/crowdout.pdf. A study of Insurance and for How Long?” U.S. Congressional
expansions of state low-income health programs Budget Office, May 2003, p. 7, ftp://ftp.cbo.gov/42
also found “about 50 percent of those who newly xx/doc4210/05-12-Uninsured.pdf.
participated in the public program substituted
public insurance for private insurance.” RAND 30. Clark for President, “Clark Plan for Health
Health, “State Efforts to Insure the Uninsured: An Reform: Promoting Value in Health Care and
Unfinished Story,” 2003, p. 2, http://www.rand.org Access and More Affordable Coverage for All,” p. 4,
/publications/RB/RB4558.1/RB4558.1.pdf. http://clark04.com/issues/healthcare_long. pdf.
28. Information on the Clark plan comes from the 40. Ibid.
Clark for President website, http://clark04.com/
issues/healthcare_long.pdf; Sara R. Collins, Karen 41. Gov. Howard Dean, State of the State address,
Davis, and Jeanne M. Lambrew, “Health Care January 4, 2000, quoted in “Democratic Governor
Reform Returns to the National Agenda: The 2004 and Medical Doctor Opposes New Health Care
Presidential Candidates’ Proposals,” Common- Mandates and Right to Sue,” Health Benefits
wealth Fund, November 17, 2003, http://www.cm Coalition, January 11, 2000, www.hbcws5.com/fact
wf.org/programs/insurance/collins_reformagen 11100.htm.
da_671.pdf; and Kenneth E. Thorpe, “Estimated
Federal Costs and Newly Insured under General 42. Holly Ramer, Associated Press, “Dean Calls for
Clark’s Health Care Plan,” October 27, 2003. Copy Overhaul of Mental Health Care,” Manchester, NH,
of this and other work by Thorpe in author’s files. Union Leader, September 13, 2003, p. A5.
29. Ibid. Thorpe bases all estimates of individuals 43. Jennifer Bowman, Jeanne De Sa, and Stuart
newly insured on the Census Bureau’s current pop- Hagen, “Estimate of S. 543, the Mental Health
ulation series estimate of 43.6 million current unin- Equitable Treatment Act,” Congressional Budget
sured Americans. See Congressional Budget Office, Office memorandum, July 12, 2002, http://www.
“CBO Estimate of Effect on Direct Spending and cbo.gov/showdoc.cfm?index=3619&sequence=0.
24
44. William J. Scanlon, General Accounting Office, 57. Information on the Lieberman plan comes
“Private Health Insurance: Impact of Premium from the Joe Lieberman for President, Inc., web-
Increases on Number of Covered Individuals Is site, http://www.joecare.com; Collins, Davis, and
Uncertain,” Testimony before the Subcommittee Lambrew; and Kenneth E. Thorpe, “Estimated
on Employer-Employee Relations of the House Federal Costs and Newly Insured under Senator
Committee on Education and the Workforce, June Lieberman’s Health Insurance Plan,” August 29,
11, 1999, p. 6, http://www.gao.gov/archive/1999/ 2003, http://www.joecare.com/plan/econanal.
he99147t.pdf. htm.
45. Information on the Edwards plan comes from 58. Figures do not include projected offsetting tax
the John Edwards for President campaign website, receipts. Ibid.
http://www.johnedwards2004.com; Collins, Davis,
and Lambrew; and Kenneth E. Thorpe, “Estimated 59. Joe Lieberman for President, Inc., “Treating
Federal Costs and Newly Insured under Senator America Right: Better Care That’s Always There;
Edwards’ Health Insurance Proposal,” October 22, Joe Lieberman’s Workable Solution to America’s
2003. Health Care Crisis,” http://www.joecare.com/plan
/index.htm.
46. Figures are before calculating offsetting
receipts. Ibid. 60. Ibid.
53. “John Kerry’s Plan to Make Health Care 68. Esmail and Walker, “Waiting Your Turn,” p. 5.
Affordable to Every American,” pp. 6–7, John
Kerry for President campaign website, http:// 69. See John S. Hoff, Medicare Private Contracting:
www.johnkerry.com/pdf/kerry_health_plan.pdf. Paternalism or Autonomy? (Washington: AEI Press,
1998).
54. Ibid., p. 2.
70. Information on the Sharpton plan is drawn
55. See John C. Goodman and Gerald L. Musgrave, from the Al Sharpton for President campaign web-
Patient Power: Solving America’s Health Care Crisis site, http://www.sharpton2004.org/. Attempts to
(Washington: Cato Institute, 1992), pp. 551–84. obtain additional information from the campaign
were unsuccessful.
56. “John Kerry’s Plan to Make Health Care
Affordable to Every American.” 71. H.J. Res. 30, introduced March 4, 2003,
25
Government Printing Office, http://frwebgate. 76. Hofbauer and Lara, p. 14.
access.gpo.gov/cgi-bin/getdoc.cgi?dbname
=108_cong_bills&docid=f:hj30ih.txt.pdf. Dennis 77. Nadeem Esmail and Michael Walker, “How
Kucinich has cosponsored this constitutional Good Is Canadian Health Care? An International
amendment. Comparison of Health Care Systems,” Fraser
Institute, August 2002, p. 30, http://www.fraserin
72. Helena Hofbauer and Gabriel Lara, “Health stitute.ca/shared/readmore.asp?sNav=pb&id=394.
Care: A Question of Human Rights, Not Charity,”
Fundar Centro de Análisis e Investigación, April 78. Sharpton 2004 for President Committee, “A
2002, http://www.internationalbudget.org/themes Trio of Human Rights Amendments,” campaign
/ESC/health.pdf. website, http://sharpton2004.org/index.php?menu
ID=Page&pid=5.
73. Bruce Stokes, “Mexico, the Next Retirement
Mecca?” National Journal, September 9, 2000. 79. Kucinich has cosponsored the Jackson
amendment, though he has not incorporated it in
74. Walton Francis, “The FEHBP as a Model for his campaign, nor has he indicated whether he
Medicare Reform: Separating Fact from Fiction,” would delay implementation of his health care
Heritage Foundation Backgrounder no. 1674, plan pending the amendment’s ratification. This
August 7, 2003, http://www.heritage.org/Research raises an apparent paradox. The Jackson amend-
/HealthCare/bg1674.cfm. ment would establish a “right to health care of
equal high quality” and grant Congress the power
75. Worldsurface.com, “Mexico,” http://www.world to enforce that right. If Kucinich believes
surface.com/browse/static.asp?staticpageid=937. Congress already possesses the power to enforce
“Worldsurface.com is an online travel magazine this right, the Jackson amendment is unneces-
written by an international community of writers & sary. If he believes Congress does not already pos-
photographers. We promote sustainable tourism sess this power, his health care plan would be
and fair trade travel for independent travelers.” unconstitutional.
Published by the Cato Institute, Policy Analysis is a regular series evaluating government policies and offer-
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26