Politics

Hillary's Learning Curve

How long before she becomes a libertarian?

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On most issues, you can line up Hillary Clinton on one side and the Bush administration, free-market think tanks and conservative economists on the other. It would be a surprise to find the former first lady lifting ideas from her longtime opponents. But in this case, there is not one surprise but two: She's not only doing it, but she's doing it on health insurance, where she once embodied Big Government.

The chief question before the country right now is what to do about the 47 million people in the United States who lack health insurance. Their being uninsured is regrettable because it prevents them from getting adequate care and forces the rest of us to shoulder the cost when they get sick.

Not only that, it causes anxiety among the insured, who worry about losing coverage. The magnitude of the problem is such that this year, the presidential candidates have been forced to come up with plans to assure everyone, or almost everyone, will be covered.

For years, many conservative experts have proposed a way: making health insurance more affordable by changing how it's treated in the tax code. In this year's State of the Union address, President Bush urged that individuals who buy medical insurance get the same tax break that businesses get when they purchase policies for their workers. In his plan, any family that obtains private coverage would get a $15,000 tax deduction.

But more is required to expand coverage among low-income Americans. Since they pay little or nothing in income taxes, the deduction wouldn't help them much. So the president's plan would provide them a "refundable" tax credit—a fancy way of saying that if they don't owe taxes, they would get money to buy health insurance. It amounts to a federal voucher for medical coverage.

Bush's solution certainly appeals to his ideological allies. His former chief economic adviser, Harvard professor Gregory Mankiw, has praised the concept. So has Tyler Cowen, a George Mason University economist affiliated with the libertarian Cato Institute. David Gratzer, a physician at the conservative Manhattan Institute, raised the idea in an article for National Review Online.

The case has been neatly summarized by Nina Owcharenko, a policy analyst at the Heritage Foundation who says approaches like this have a host of conservative virtues. "Instead of building on bureaucratic structures or relying on outmoded welfare programs," she writes, "they can promote personal choice in health plans and benefits by transferring decisionmaking power in the health care system to individuals and families."

The change would also make a huge difference. Mark Pauly, a health care economist at the University of Pennsylvania's Wharton School, says that with a credit of $2,000 per person, "I'd guarantee a 50 percent reduction in the number of uninsured." A larger subsidy could boost that figure to 85 percent.

Part of the value of this strategy is that it would vastly expand the individual insurance sector, which now performs poorly because it is so small, has such high overhead expenses and attracts so many high-risk individuals. Arming millions of healthy people with tax credits, Pauly ventures, would be a potent stimulus to competition and efficiency in the private market.

This is not a goal of those who favor government-run health care. So you wouldn't expect Hillary Clinton to embrace the idea. But her new plan says, "Working families will receive a refundable tax credit to help them afford high-quality health coverage." (How big, she doesn't say.)

Is that a change? Well, back in 1993, when we got the original version of HillaryCare, it was opposed by a coalition called Citizens Against Rationing Health, whose alternative plan included—what's this?—a refundable tax credit for the poor.

This is not to say that Clinton has joined the Milton Friedman fan club. Her program is still heavy on the kind of intrusive government dictates she has always found so alluring. It would compel employers to provide coverage, force insurance companies to offer policies to everyone, with no "excessive premiums," and order pharmaceutical manufacturers to sell drugs at "fair prices." It would force private insurers to compete with a government-sponsored program that could be priced at a loss to put them out of business.

When it comes to health care, Clinton has a long way to go. But conservatives can hope that she has only begun to learn from them.

COPYRIGHT 2007 CREATORS SYNDICATE, INC.

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  1. Good. Let’s hope it creeps a bit further.

    On a related note, I saw a little bit of her speech revealing her plan. She stressed “individual choice” and “competition” as vital aspects to her plan. Maybe Old Boy Bill is whispering in her ear–we can only hope.

  2. I’d say HRC is creeping more toward pragmatism than idealism. Front-runners tend to get more conservative as the prize gets closer and closer.

  3. Isn’t it convenient that she leans Libertarian and borrows ideas from conservatives more as elections approach….Why didn’t she present such ideas at the YearlyKos convention?

  4. She stressed “individual choice” and “competition” as vital aspects to her plan.

    When she says those words, I don’t think they mean the same thing as when we say those words.

    Just sayin’.

  5. When she says those words, I don’t think they mean the same thing as when we say those words.

    I’m not certain they mean anything at all…

  6. I’m with ed. When Hillary creeps towards free-market thinking, she has a ways to go before she reaches mainstream thought, much less libertarian thought. The difference this time is that she actually has to sell the idea herself and doesn’t get to rely on her husband. Bill has just a little bit more charisma than his wife. Plus, he also doesn’t induce the urge to stab out your eyes and ears every time he talks, unlike Hillary.

  7. Like Nixon to China, only a Democrat can do any real privatization and de-regulation. If it is a good plan, enough Republicans will do the right thing to outweigh the objecters on the Democratic side. Look at it this way, if Reagan had proposed welfare reform, he would have been destroyed as wanting to throw starving masses into the street. Clinton not so much. Perhaps I am too much of an optimist, but I would like to give Hillary Clinton the benefit of the doubt on this.

  8. So, what the Republicans said at the debate on Tuesday was “Pay no attention to the Democrats and their Communist Health Care plans, come to us with our Fascist Health Care Plan.

    Hillary is making nice to fascism, but its still socialism.

  9. I don’t know John, the snowclone “Only x can go to x” doesn’t really work in this situation – Nixon went to China to open trade with a huge nation – it was in his best interest and in the Republican party’s best interest. It’s not in Hillary’s interest AT ALL to do any kind of privatization, rather it’s in her interest to use all the presidential power that Bush has claimed and then some.

  10. Conservatives spent so many years demonizing “Headband Hillary,” the hippie who kept her maiden name and “compared marriage to slavery” and wants the government to raise everyone’s children that they are continually suprised to discover that she’s a cautious centrist.

  11. Why do I think that the first thing Congress is going to do with HillaCare is strip out the more market oriented provisions.

  12. “Conservatives spent so many years demonizing “Headband Hillary,” the hippie who kept her maiden name and “compared marriage to slavery” and wants the government to raise everyone’s children that they are continually suprised to discover that she’s a cautious centrist.”

    Is this the case or is her health plan a back door to socialized medicine which could be the case if private insurance goes out of business if government run insurance can out compete it with by operating at a loss.

  13. I would like, once and for all, a break down of this “47 million without healthcare” figure. Who EXACTLY are each of these people? If those who call for universal healthcare want to use this figure in order to saddle me with yet another inefficient government agency (in charge of my healthcare no less) then this figure needs to be broken down. Anyone out there know who/where all these uninsured are?

  14. dbust1: A hell of a lot of the uninsured are chaps like me with youth and decent health who are taking a small risk because it’s cheaper.

  15. chancelikely,

    Exactly. I made the mistake, yes mistake, of paying for healthcare in a previous job. I’m young, like you, and in great health. I was also cash strapped and, like you, should have taken a chance on not needing insurance. So, if some of the “47 million” are just those who CHOOSE not to buy insurance who are the rest? Anyone know? I’d hate to think that the universal healthcare nanny staters have succeeded in feeding America a big lie.

  16. I think Hillary will win, and I think she will ultimately govern as a self interested poll watcher, which means the quality of her term will have a lot to do with how reasonable public opinion is on various issues.

    Also:

    Dave Weigel in a pants suit?

  17. “Anyone out there know who/where all these uninsured are?”

    A study in 2004 by the Actuarial Research Corporation found that 14 million of the uninsured were eligible to be enrolled in public insurance programs such as Medicaid or SCHIP. 9.3 million uninsured individuals earned $50,000 or more. More than 45% of the uninsured are people under 35 years old. Almost 33 percent of the uninsured are Hispanics, many of whom are illegal immigrants who would qualify for Medicaid but are araid to sign up for fear of being deported. It was estimated that only 8.2 million were chronically uninsured and low income. So, you can see that this 47 million figure is highly exaggerated to try to justify putting us all under a socialized medicine system.

  18. Rattlesnake Jake,

    Thank you, thank you, thank you. Now if only the media and pols would read anything besides tele-prompters or spoon fed “research” then this big lie would die the ignominious death it deserves.

  19. dbust: an excellent question!

    for starters:

    hier PDF!PDF!PDF!

    some are young – like chance. some actually are wealthy. For some, it’s too expensive – they pay more for coverage than they’ll need.

    Estimates of the uninsured are generally taken from surveys – samples of interviewed rather than from the census.

    The NHIS (National Health Interview Survey) is the go-to source. The Current Population Survey, the Survey of Income and Program Participation, and the Medicare Expenditure Survey are also sources used in finding this number.

    The NHIS defines individuals as “uninsured” if they lacked coverage in the month prior to the survey. The CPS defines individuals as uninsured if they have lacked coverage for the entire previous calendar year (*the CPS has been questioned: many suspect that the respondents provide incorrect info).

    THe MEPS data come up with “insured” to mean “those without insurance coverage for the entire interview round (3-5 months)”.

    The SIPP counts individuals who are uninsured for each month of the four month reference period.

    Since these are surveys with different methodologies, there are varying “answers” to the uninsured.

    The NHIS had around 40.5 million; MEPS got 46.

    In 2004, MEPS counted about 48 million.

    The HHS has this info, hier

    The “economic reason” for the uninsured is that consumers face the “wrong price” (defined as the actuarially fair insurance, where price = risk)

    The consumer selects level of coverage based on expected utility of being sick, well, and the financial loss from illness or from expenditures on medical services.

    To be fully insured, you’d set the level of coverage to equal your expected loss of income from illness or from medical expenditures.

    Since there is uncertainty, that’s why you need insurance.

    Cutler and Zeckhauser’s 2000 paper, the Anatomy of Health Insurance (abstract)

    Market failure is famously attributed to moral hazard and adverse selection. Ehrlich and Becker (1972) have a paper on this, abstract)

    That can help explain why there are uninsured.

    One problem with health care is that there is an overuse, misuse, and underuse of resources. Preventative measures.

    The RAND Health Insurance Experiment
    (http://www.rand.org/health/projects/hie/) has more on this – there are some problems with the study (including participation incentives).

    Newhouse (1997) summarizes the RAND experiment in “Free For All”
    hier

    This is a complex issue, and it cuts across many contentious political issues…

  20. Not to mention the moving target of the temporarily unemployed who are temporarily uninsured. The “47 million” figure also dishonestly presumes that every one of those individuals wants to be insured but cannot afford it, which is untrue but useful in a political context where “the wide stance” has trumped the old-fashioned concept of “truth”.*

    *Something that is actually true, not just expedient

  21. “Their being uninsured is regrettable because it prevents them from getting adequate care and forces the rest of us to shoulder the cost when they get sick.”

    First off there is a law already in America that everyone must receive the health care ordered by a doctor. This is in contrast to the “rationing” system in public insurance where you receive your health care at the mercy of a commissioner.

    Secondly in a public insurance scheme we will always have to shoulder the burden of people getting sick as opposed to the current arrangement where only a small fraction of bills must be paid out of the public expense.

    Remember, health insurance does not mean health care and making something a public responsibility is a poor tactic to reduce a public burden.

  22. “health insurance does not mean health care”

    QFT

    and health care does not mean health. It is one of many inputs in the “production” of health.

  23. To be fully insured, you’d set the level of coverage to equal your expected loss of income from illness or from medical expenditures.

    Well, no. Insurance should cover unexpected losses. There’s no reason to pay the insurance company $120 so they’ll cover the cost of a $100 annual checkup and the paperwork to file the claim. Unfortunately many folks think they should, and too many politicians pander to them.

    Personally, I think we need to get employers out of the loop. If we could get policies individually, or in voluntary groups, it would end the huge problem of loosing coverage every time you change jobs.

    What if (for instance) I could get the same tax benefits by applying for insurance through the National Rifle Association, the United Methodist Church, or Wells Fargo Bank? The insurance companies get large groups to deal with, and they stand a much better chance of keeping customers long enough for preventive services to pay off in long-term health care.

  24. How long before she becomes a libertarian?

    Ummm — never, yeah?

  25. Uncertain losses. You know how much you’re gonna lose from lost work, for example. It is muddied by not knowing price schedules for treatment, but it’s uncertainty that you’re insuring against, and you select your level of insurance coverage by what you’d expect.

  26. whoops. (sorry for double)

    and what you’re writing is exactly what I’m saying.

    it is uncertain whether you’re going to be sick. if you are and miss work, you know how much you would expect to lose.

    you have insurance
    risk aversion
    willingness to pay to reduce risk

    risk premium – willingness to pay to insure against the risk of loss. to be able to do this, you have to have an expectation of loss.

    the greater the potential loss, the greater demand for insurance. the greater the uncertainty, the greater demand for insurance.

    risk averse will have more insurance than those who are less averse.

    the occurrence is unexpected. but the losses are not.

  27. But more government meddling is required desired by statists to expand coverage among coerce low-income Americans into spending their money on what they perceive as a lower priority than things like food, housing, or education.

    Clarity should not be sacrificed to brevity, Steve Chapman.

  28. I got so caught up in the healthcare portion of the article that I ignored the political spectrum. Calling Hillary a “centrist” is a misrepresentation. “Center left” may be more accurate. Looking at just the left end of the spectrum she may be ‘center’ but she sits well to the left on the whole spectrum.

    And as far as front runners becoming more conservative as they get closer to the “prize,” I really can’t say; but I don’t think that is the case with Hillary. With her I think she lets the winds of opinion steer her rudder more so than any personal political convictions. Furthermore I really do question her integrity and any statements she makes now are just that, statements. NOT commitments.

    Also, John, please explain how “only a Democrat can do any real privatization and de-regulation.”

  29. I think the following facts are ingnored by both conservatives, liberals, and yes libertarians.

    1. We are already paying for everyone’s healthcare. Just right now we often wait till it reaches the point of being emergency care, and so it costs more. So people who complain about not wanting to subsidize other people need to wake up because we already do. The only way that would change is if we stop providing emergency care to people, but that’s just not going to happen.

    2. If we accept point 1, then are mission is to try and provide healthcare in the most efficient and cost effective method provided. I think most of us would agree that will require people paying for their own healthcare costs as much as possible. For example, right now the connection between healthy lifestyle choices, and healthcare costs is broken. If you restore it and make people pay for their own choices (shocking) then people will start to make better choices, and total costs will come down. Ideally this would mean that people’s premiums would be tied to their health and lifestyle choices.

    3. Now accepting points 1 and 2, we ask what about poor people. Since they normally don’t pay for their own healthcare anyway, how could you tie their premiums into their healthcare. Obivously with some type of refundable credit. Broken down this means you are paying some people to remain healthy. Not nessecarily a plesant thought, but IMO an inescapable one.

    In general it costs $2400 a year ($200 a month) or so to insure a healthy person, but the costs quickly clime to $6000 a year or more to treat someone with any number of chornic ailments that are prinipally caused by poor lifestyle choices. We need to restore the direct link between healthy living, and medical costs. Once we do that we can begin to lower overall medical costs that are in danger of bankrupting our country.

    For those that are interested you can see more about heathcare http://kronesblog.blogspot.com on August 13. It’s directly related to CA current proposals.

  30. Good points, Mathew.

    dbust1, you’re exactly right about Hillary on your 12:41 post.

    What John meant by only Democrats doing any real privatization or deregulation is that anytime a Republican tries to get privatization or deregulation passed, they get howled at for being heartless. Democrats don’t get that same kind of criticism. Would a Republican president have been able to have passed welfare reform?

  31. Great points, Mathew Andresen.

    For all those that are looking, I’m the person that is often spoken about when people speak of the uninsured. I’m 32, unenmployed, and while I’m generally healthy, I have occasional healthcare needs.

    I would rather have an open market for health care, and no state involvement…BUT, we don’t have that. Right now we have outrageous prices for health care because we haven’t let the free market work. I can’t get a prescription drug without going to a doctor, paying for advice I’m quite capable of finding on my own, and then paying ridiculous prices for prescription drugs all because there’s a monopoly on health care and pharmacueticals in this country. There are no price lists when you go to a doctor. It’s extremely difficult to shop for a cheaper doctor. Usually, you are shunted into whoever your insurance provider wants, or you go to the emergency room if you’re uninsured.

    The vast majority of my health care needs could be taken care of by myself, through ordering prescription drugs from the internet, where I can compare prices easily. If I need advice, I should be able to choose from a wide variety of doctors with different pricing schedules to remain competitive. If I need a procedure done, I should be able to pick from a list of doctors willing to do this procedure, along with their prices.

    Since I am unemployed, and have a hard time getting employment due to a drug related felony (completely victimless crime), I’m forced to go to the emergency room when I have an acute illness, such as last year when I had kidney stones. They charged me several thousand dollars for this.

    If I cannot get a job in order to get insurance due to government interference, and cannot get health care at reasonable prices due to government interference, then I don’t feel bad taking government assistance with health insurance so that I can manage to keep myself alive long enough to find some sort of work that pays well enough to pay rent, and if I’m very lucky maybe has some sort of health plan. In short, the government has made it impossible to take care of my own health care. Now they should be required to step in, in at least a minimal capacity, so I can afford things like penicillen, and asthma medication.

  32. Next thing you know the Liberal-Statist-Centrist Democrats will want to take over home and Auto insurance too.

  33. yet another light, airy, always moderately positive toward any democrat in this country piece from mr. chapman….just shocking….hmmm… Bush for once gets something right and vetos the schip thing…i mean i can’t even remember when any welfare state measure has been actually vetoed by a president…think that might be a story, but chapman writes this this about hillary…whew

  34. I got so caught up in the healthcare portion of the article that I ignored the political spectrum. Calling Hillary a “centrist” is a misrepresentation. “Center left” may be more accurate. Looking at just the left end of the spectrum she may be ‘center’ but she sits well to the left on the whole spectrum.

    Well…depends on how you measure the spectrum.
    Since America, in general, skews right of center when compared to the rest of the world, being “center left” in America might even put you “center right” if the distribution of the world across the spectrum is considered.

    I would guess someone has tried to quantify this more rigorously.

  35. Ah, the Clintons; so triangulatable.
    (That’s a word, right?)

  36. First off there is a law already in America that everyone must receive the health care ordered by a doctor. This is in contrast to the “rationing” system in public insurance where you receive your health care at the mercy of a commissioner.

    Except, that’s not really true either. Many (most?) doctors get a lot of their pay check from insurance companies that slap them, if they recommend people for further treatment “too much” or “too often”.

    My wife had to overtly threaten a lawsuit, when she thought she had a serious problem, because our primary care physician was refusing to acknowledge it, or to recommend the the testing that needed to be done.

    Turns out, when she was tested the problem was real.

    If you think we aren’t rationed already, you haven’t looked at the system close enough. It’s just a question of whether the rationer is a buearacrat of Big Government, or of Big Business.

    Unaccountable, non-free market Big Business, I mean. Because the entire medical industry does not have to play by the same rules of business practice that everybody else does.

    Put the freaking medical system into the free market, and you’ll be amazed at how affordable health care becomes for the teaming masses.

  37. I want everyone to know that HRC figures big in my own health care plans. I plan to vote against her.

    I also plan to hope like hell that the alternative is actually better.

  38. Trea,

    I hereby declare that “triangulatable” is now a word.

    Triangulatable- possessing characteristics endowing one with the capacity for being measured utilizing trigonometric relationships.

  39. Let’s not forget that Roosevelt before his first term said a lot of things that didn’t exactly pan out over his reign.

  40. How about we get rid the regulations on medicine instead of using the tax code to give government more control over medicine and people?

  41. This is the same Hillary who very recently said – supposedly just about Social Security – this nugget:

    “When I’m president, privatization is off the table because it’s not the answer to anything.”

    Take that statement, and you have her solution to “anything”… she does NOT like the private sector. In her world, if government does not provide it… it’s not worth providing.

    Yikes. Why would ANYONE write anything favorable about this foul creature?

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