Senator Hillary Clinton recently released her plan to reform U.S. healthcare and ensure universal coverage. Spectators to her unsuccessful 1990s efforts to achieve the same goal may be reminded of the line from Poltergeist II: “They’re ba-aack.”
Senator Clinton insists that her plan is anything but recycled.
“This is not government-run,” she asserts. “Don’t let them fool us again.”
This statement is baffling, considering a concept at the heart of her proposal.
Clinton aims to impose a government mandate on every man, woman and child in the United States to buy or be given government-subsidized health insurance. Except for the very rich, plans would be paid for from taxes and employer mandates in addition to individual payments based on ability to pay what Senator Clinton describes as a “reasonable” amount.
Despite Senator Clinton’s claim of originality, individual and employer government mandates are nothing new.
Before supporting any plan based on this principle-that forcing people to buy health insurance increases access to care-the track record of mandates should be considered.
In order for an individual government mandate to compel the purchase of health insurance, another government requirement for something called “Guaranteed Issue” must first be enacted.
“Guaranteed Issue” forces every insurance company to sell health insurance to every applicant regardless of health history, lifestyle or risk factors. This is in fact another part of Senator Clinton’s proposal that she reports is critical to achieve universal coverage.
In theory, this appears sound. If health insurance companies can’t “just say no” to high-risk applicants, no one will be left without access to coverage.
Unfortunately, the law of unintended consequences trumps this logic.
In New Jersey and Massachusetts, unlike in California, laws were passed to force every insurance carrier to sell plans to every individual applicant. Individual insurance premiums in New Jersey and Massachusetts are three times higher than those in California.
Washington State tried Guaranteed Issue. With no way to mitigate risk, insurance carriers in the state suffered severe financial losses related to high-risk patients. They then exited the individual market; no individual health insurance plans were accessible to Washington residents at any price.
Senator Clinton was not a New Yorker in 1993. But that was the year New York State forced Guaranteed Issue on the health insurance market. 500,000 New Yorkers then cancelled their health insurance plans; rates for a third of all those insured had skyrocketed by 20-59%.
Alternatives to Guaranteed Issue exist and have proven effective. When a risk pool is created, the expense associated with covering high-risk patients is spread across an entire industry instead of forcing unsustainable losses on a few that cover a disproportionately large number of such individuals.
Rehashing ideas that have failed in the past is not limited to Senator Clinton or even those who share her political views.
Senator John Edwards offers a plan for universal healthcare that forces both an individual government mandate and an employer mandate.
Aside from creating financial disaster for U.S. employers and inevitable large-scale job losses, an employer mandate on this scale has been ruled a violation of federal law. In January of 2007, ruling on a similar attempt in Maryland to compel large employers to “pay or play,” a federal appeals court cited the 1974 Employee Retirement Income Security Act (ERISA) and declared this type of employer mandate illegal. The Maryland Attorney General elected not to appeal to the U.S. Supreme Court, reporting that he “could not win.”
Not to be outdone by his Democratic colleagues, Republican Governor Mitt Romney succeeded in imposing a Senator Clinton-style individual government mandate on the citizens of Massachusetts. Taxpayers in that state now fund subsidies for insurance premiums that have risen 30% since the Governor’s plan was enacted.
Recycling old ideas and presenting them as new accomplishes nothing meaningful for those with the highest stakes in this debate: patients needing affordable, high quality coverage.
For the sake of patients who must contend with the consequences of politicians’ actions, however well meaning or unintended, a fresh approach based on common sense-not spin-is needed.
Dr. Halderman is a Board-Certified General Surgeon practicing in rural central California.
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