Thanks to the profit-seeking souls at Times Books, you don't have to be a lobbyist or congressional aide to get your hands on the text of the Clinton health-care plan. You can go to the mall and pick up a 284-page paperback copy for $8.00. But judging from the way both supporters and opponents are describing it, even the pros haven't really read the plan.
When supporters talk about it, they sound like cheery personnel officers guiding new employees through company benefits packages. "We offer two choices of plans," they say. "There's the fee-for-service plan, where you have a $200 deductible, and the preferred provider network, where you pay only $10 a visit. Which would you like to sign up for? We recommend the cheaper one."
Opponents, on the other hand, make the Clinton plan sound like just another expensive entitlement scheme: Aid for Families with Dependent Sick People. They warn of heavy payroll taxes—if you like FICA, you'll love Clintoncare—and runaway costs. They talk about the deficit and lost jobs.
Both sides treat the health-care plan as the latest lavish program for taxing and spending. One side emphasizes the benefits, the other the costs. Neither gets to the real story.
Despite the neat charts you've probably seen reprinted in your local newspaper, most of those 284 pages have nothing to do with describing benefits. And very few talk about paying for them.
The Clinton plan isn't a simple transfer scheme. It is a systematic program for destroying the health-care industry and replacing it with regional cartels, government price caps, and mass, standardized medicine. It is not about handouts or subsidies, though it includes both. It is about unbridled, unaccountable bureaucratic rule.
Sure, the plan has its silly and expensive moments. It suggests covering aerobics ("physical training classes") in the name of preventive care. It picks up everyone's therapist bills, promising a cost explosion unmatched since California started allowing worker's comp claims for "stress."
At its most absurd, the Clinton outline declares that "health plans may not terminate, restrict or limit coverage for the comprehensive benefit package for any reason, including non-payment of premiums." (Emphasis added.) It's easy to see where that will lead. Why pay when you can get the same care for free?
But the heart of the plan is not expensive indulgences. It is, rather, an attack on choice and competition. In page after mind-numbing page of bureaucratic detail, the plan closes every conceivable avenue of escape, plugs every possible source of diversity, eliminates every incentive for innovation. It threatens new drugs with price controls, forbids hospitals and universities to train more than a constricted number of specialists, requires urban health plans to serve rural areas, and makes paying extra for care a crime.
To read the plan carefully, to picture the world it describes in deliberately abstract language, is to begin to see the forest amid the trees. And it is The Forest of No Return. Those who stumble in never can get out. Bill Clinton is nationalizing the health-care industry and doesn't have the guts to admit it.
The centerpiece of the plan is the system of "regional health alliances." An alliance may be a state agency or a nonprofit corporation overseen by your state. The government-appointed alliance board determines which companies can offer health plans in your area. Employers and self-employed people pay premiums to the local alliance, and "it is the obligation of every eligible individual to enroll in a health plan."
The regional alliance resembles the local cable franchise—a government-created monopoly through which consumer services flow. "States may establish one, and only one, regional alliance in each area."
Like a cable company's, the alliance's prices and services are tightly regulated. Consumers have "choice" among health plans offered through the alliance, just as they can choose whether to buy Showtime or HBO from the local cable monopoly. But the number of plans is limited, and most are nearly identical. (The plan lets big companies establish their own "corporate alliances" for employees, but it doesn't let them offer plans that pay higher fees than the standard government ones.) Consumers are stuck with a single regional alliance that has no competition and thus no incentive to give good service. The only escape is to move to another region and hope the new alliance is better.
Each plan must provide a standard benefit package and price its premiums within a narrow range based on a "target" established by a National Health Board. If premiums are too high, they have to be "renegotiated" or reduced via an "assessment" (a.k.a. a tax) on high-priced plans. The Clinton outline doesn't specify what happens if no company will sell its services at the approved premium. But it does give each state the option of establishing a government-run single-payer plan. In other words, it provides a mechanism for establishing a Canadian-style socialist system through the back door, without the messiness of a congressional vote.
Much of the plan deals with various sorts of price controls. Bill Clinton is obsessed with containing the cost of health care—he brought it up incessantly at the Little Rock economic summit. But the Clinton plan eschews any thought of making consumers more sensitive to prices. It deliberately limits out-of-pocket costs "to ensure financial protection" even as it expands "free" care not only to the now uninsured but also to people whose current insurance plan is less lavish than the "guaranteed benefits package."
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—health care 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.