Sen. Hillary Clinton, D-N.Y., helped mark the battle lines separating the Democratic presidential contenders and the Republican contenders on health finance issues last week when she released her American Health Choices Plan.
Clinton’s proposal would let Americans without employer-sponsored coverage choose between buying traditional Medicare coverage and buying private coverage through the Federal Employees Health Benefits Program.
The proposal would require most large employers to provide coverage or contribute to the health finance system some other way, and it would require individuals to buy their own coverage.
Clinton’s proposal also would:
–Strengthen Medicaid and the State Children’s Health Insurance Program.
–Require insurers to sell health coverage on a guaranteed issue basis, and limit carriers’ ability to use members’ health as a reason for increasing rates and dropping members from plans.
–Create a tax credit to help small businesses pay for coverage.
–Cap the employer tax exclusion for health insurance premiums for individuals earning more than $250,000 per year.
–Limit health insurance premium payments to a designated percentage of taxpayers’ income.
“If you’re one of the tens of millions of Americans without coverage or if you don’t like the coverage you have, you will have a choice of plans to pick from and you’ll get tax credits to help pay for it,” Clinton says in a statement about her proposal. “If you like the plan you have, you can keep it.”
Fellow Democratic contenders Sen. Barack Obama, D-Ill., and John Edwards are grumbling that many of the same ideas have appeared before-on their own Web sites.
Meanwhile, the leading Republican presidential candidates are offering much shorter health finance proposals that tend to emphasize steps such as easing access to health savings accounts.
Mitt Romney, the former Republican governor of Massachusetts, signed into law a state program that shares some elements in common with Clinton’s proposal.
But “is Romney still in favor of the Romney plan?” asks Eric Lotke, research director at the Campaign for America’s Future, Washington. “He’s been distancing himself from all that.”
Health insurance company and producer groups are welcoming the interest Clinton and other Democratic presidential candidates are showing in health insurance.
“You have to be encouraged that she put out this 8- or 10-page paper, with details,” says Bill Foudy, a Los Angeles agent who serves on the board of the Association of Health Insurance Advisors, an arm of the National Association of Insurance and Financial Advisors, Falls Church, Va.
But observers in the industry complain that Clinton has gone out of her way to demonize health insurers.
“The new Clinton plan includes important ideas to make coverage more affordable,” says Karen Ignagni, president of America’s Health Insurance Plans, Washington. “Unfortunately, some of the divisive rhetoric seems reminiscent of 1993.”
Eric Raymond, CEO of Corporate Synergies Inc., Mount Laurel, N.J., a benefits consultant who likes many aspects of Clinton’s plan, such as provisions for improving the quality of preventive care and setting standards for health data interchange, says he believes fair competition between a Medicare-like plan and private plans could work reasonably well, at least for awhile.
If, however, government subsidies give the Medicare-like plan an unfair price advantage, that could push the country toward adopting a single national public health insurance system, Raymond says.
In the long run, if a proposal like the Clinton proposal takes off, “the small group employer market probably will be taken over by the government,” Raymond says.
Industry observers say they also have many concerns about the proposal details.
AHIA, for examples, says Clinton ought to keep costs down by including an affordable basic benefits policy.
Janet Trautwein, CEO of the National Association of Health Underwriters, Arlington, Va., questions whether the government could make individuals buy health coverage without creating a huge enforcement bureaucracy.
In the auto insurance market, 48 states require drivers to have liability coverage, but the percentage of drivers who lack auto insurance is about as high as the percentage of Americans who lack health coverage, Trautwein says.
Clinton estimates implementing her proposal would cost about $110 billion per year. But the costs could be much higher, and some of the “financing sources” Clinton lists are estimates of hypothetical health care savings figures that may not really materialize, Trautwein and Foudy say.