We would all prefer a system that provides “universal” insurance for every conceivable ailment (from diet disorders to long-term care), remains “affordable” and allows complete “choice” for patients and doctors alike. But such a system is a mirage. There are conflicts among all these goals, and somehow, they will be resolved. What we call “the uninsured,” or “soaring health costs” or “rationing” are just some of the ways it happens. Our ideal system is an impossibility, and the debate’s crippling defect was its inability to recognize this basic limit.
For this, the Clintons bear a heavy responsibility. Their original proposal tried to be all things to all people. It tried to placate liberals and advocates of a Canadian-like “single payer” system by promising “universal coverage” with lavish benefits. It tried to placate big business by calling itself “managed competition,” which had a private-enterprise aura. And it tried to seduce selected constituencies with new benefits: the elderly got drug coverage under Medicare; states were relieved of many Medicaid costs.
The “con” failed because too many people con-eluded that the plan wasn’t credible. That is, it couldn’t expand insurance coverage and control costs without (as the Clintons said) major tax increases or massive government meddling in medicine. The initial Clinton strategy aimed to build support on two levels. Public opinion would be won by preaching “universal coverage,” which was heavily favored by the public as a way to protect people against insurance loss. On Capitol Hill, a coalition of big business, labor and the elderly would overwhelm opposition from small business (which disliked employer “mandates”) and some insurance companies (which would lose under “managed competition”).
In practice, the plan’s complexities–reflecting its many promises–sabotaged the strategy. Public opinion was lost, because the plan’s bewildering details (health “alliances,” “accountable health plans”) fanned people’s fears that government would disrupt their medical care. After Clinton’s speech to Congress in September, 59 percent of the public supported his plan. By July this was 40 percent. The plan did the damage, not hostile TV ads; in a NEWSWEEK Poll, 62 percent of respondents rated those ads as dishonest. The problem was not that the people grasped what the plan meant for them; it was that they couldn’t.
Similar problems eroded interest-group support. For example, big companies initially backed employer “mandates” because they believed universal insurance would lower their costs. They would no longer have to bear, through premiums, the burden of the uninsured. But the Clinton plan also shifted costs to employers by putting many nonworkers into huge insurance pools, where some of their costs would have to be subsidized by companies. The consulting firm Lewin-VHI estimated these subsidies at $20 billion annually. This was one way Clinton minimized new taxes.
The term “con” implies that the Clintons recognized their plan’s inconsistencies. In truth, I don’t know whether this was so. They should have known, but perhaps they deceived themselves? Either way, the plan squandered support while generating huge expectations of What “reform” should achieve. All subsequent efforts to modify Clinton’s plan started from a shaky political base while straining to satisfy sweeping and unrealistic goals. Republicans didn’t kill health reform; it self-destructed.
Democrats ought to concede this, but Republicans should not gloat. They hypocritically complained about “too much government” and extolled “competition.” What they ignored is that health care is already dominated by government. It pays two fifths of all costs and subsidizes private insurance by excluding employer-paid benefits from income taxes. In 1995 the subsidy will cost about $56 billion. If Republicans truly wanted “competition,” they’d end the subsidy (other taxes could be cut to offset the tax increase). No major GOP proposal did so.
In this sense, the “con” was bipartisan. Everyone evaded the nub of the problem, which is the insistent rise of spending. This squeezes government budgets and private pay and, as insurance becomes costlier, raises the number of uninsured. But there are no easy ways to curb spending. The two basic approaches are tough governmental controls or less generous private insurance, which channels people into “managed care” (giving them fewer choices) or makes them pay more of their own costs. All approaches pose risks. They could suffocate us in governmental or private bureaucracies; care quality could suffer.
The debate failed in its function of illuminating important public choices and providing popular consent for some set of preferences* But just because the choices weren’t faced doesn’t mean they can be avoided. They will continue to be made in a largely random fashion–driven by companies’ and states’ desire to curb their health costs. Perhaps this is the best we can do; it’s better than Clinton’s system. But there’s no guarantee that this haphazard process will sharply limit spending or that the number of uninsured won’t continue to rise. Congressional inaction will not insulate Americans from change.
Sooner or later, there will be another health-care debate. Broad agreement already exists on “insurance reform” (protecting people against the loss of coverage), and had the Clintons been willing to settle for less, Congress could have passed a bill. But grappling with the larger issues of costs and the uninsured will require more candor. Politicians can be blamed for only so much. Their “cons” reflect popular delusions. Americans have always been prone to utopianism. We want some grand solutions to our problems–and nothing less. We don’t want to talk about modest improvements or messy choices. Politicians pander to our erratic expectations with either sweeping promises or prudent silences. In health care, neither will get us very far.
