With no consumer incentives to save money, the Clinton plan instead relies on draconian price controls, mostly for health-plan premiums but also for new drugs and doctors' fees. And it anticipates rationing, big time.
How can you tell? Well, there's the declaration that health-care costs won't be allowed to rise faster than Gross Domestic Product after 1997. This is a frighteningly unrealistic goal. As people get richer, they tend to spend a larger share of their income on health care. (Subsidies accelerate the trend, but they do not create it.) The only way to stop that natural trend is to institute very serious rationing and eliminate any thought of new technologies. You can indeed have 1965 health care at 1965 prices. But would you want it?
Even in Canada--the land of months-long surgery queues, where they cure kidney stones the painful old-fashioned way instead of buying lithotripters--healthcare spending growth far exceeds the Clinton goal. Canadian health-care costs rose 1.2 points a year faster than GDP from 1970 to 1990, and other industrialized countries had even larger gaps.
The real tip-off to the realities of Clintoncare comes at the end of the plan's first chapter: The law establishing the program will also impose "new criminal penalties...for the payment of bribes or gratuities to influence the delivery of health services and coverage." The planners apparently envision a Soviet-style system in which health-care services are so hard to get that patients will try to bribe physicians or insurers to jump to the head of the line. To forestall such anti-egalitarian action, they threaten patients with asset forfeiture and prison time.
The plan also recreates the savings-and-loan syndrome in health care. Given the price controls (and the fact that paying premiums isn't actually required), it's quite likely that at least some companies will overpromise, only to discover that they can't cover their expenses at the premiums they charge. Rationing is one solution. So is going out of business.
If your health plan fails, you needn't worry, say the Clintonite personnel officers. Your doctor won't come collecting, and the hospital can't discharge you: "If a health plan cannot meet its financial obligations to health care providers, providers have no legal right to seek payment from patients for any services covered in the comprehensive benefit package other than the patients' obligations under cost sharing. If a health plan fails, health providers are required to continue caring for patients until they are enrolled in a new health plan."
But Clintoncare doesn't make the doctors work for free, at least not indefinitely. It covers their bills by taxing the surviving, competent health plans. First, everyone pays into a "guaranty fund" very much like the deposit insurance that gave us the S&L crisis. Then, "if a health plan fails, the state may assess payments of up to 2 percent of premiums on other plans within the alliance to generate sufficient revenue to cover outstanding claims against the failed plan."
It's not hard to picture the race to fail first. And, as plan after plan exits the market, the survivors look more and more like suckers--unless they can renegotiate to offer less service at higher prices, a tactic not unknown among regulated monopolies. For patients, there is no escape.
That, in the end, is the point. "The American Health Security Act of 1993" is about neither health nor security. It is about asserting government power and squelching private diversity. If you don't believe me, and even if you do, you should read the book yourself.
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