Op-Ed Columnist
Clinton, Obama, Insurance
By PAUL KRUGMAN
The principal policy division between Hillary Clinton and Barack
Obama involves health care. It's a division that can seem technical
and obscure — and I've read many assertions that only the most
wonkish care about the fine print of their proposals.
But as I've tried to explain in previous columns, there really is a
big difference between the candidates' approaches. And new research,
just released, confirms what I've been saying: the difference between
the plans could well be the difference between achieving universal
health coverage — a key progressive goal — and falling far short.
Specifically, new estimates say that a plan resembling Mrs. Clinton's
would cover almost twice as many of those now uninsured as a plan
resembling Mr. Obama's — at only slightly higher cost.
Let's talk about how the plans compare.
Both plans require that private insurers offer policies to everyone,
regardless of medical history. Both also allow people to buy into
government-offered insurance instead.
And both plans seek to make insurance affordable to lower-income
Americans. The Clinton plan is, however, more explicit about
affordability, promising to limit insurance costs as a percentage of
family income. And it also seems to include more funds for subsidies.
But the big difference is mandates: the Clinton plan requires that
everyone have insurance; the Obama plan doesn't.
Mr. Obama claims that people will buy insurance if it becomes
affordable. Unfortunately, the evidence says otherwise.
After all, we already have programs that make health insurance free
or very cheap to many low-income Americans, without requiring that
they sign up. And many of those eligible fail, for whatever reason,
to enroll.
An Obama-type plan would also face the problem of healthy people who
decide to take their chances or don't sign up until they develop
medical problems, thereby raising premiums for everyone else. Mr.
Obama, contradicting his earlier assertions that affordability is the
only bar to coverage, is now talking about penalizing those who delay
signing up — but it's not clear how this would work.
So the Obama plan would leave more people uninsured than the Clinton
plan. How big is the difference?
To answer this question you need to make a detailed analysis of
health care decisions. That's what Jonathan Gruber of M.I.T., one of
America's leading health care economists, does in a new paper.
Mr. Gruber finds that a plan without mandates, broadly resembling the
Obama plan, would cover 23 million of those currently uninsured, at a
taxpayer cost of $102 billion per year. An otherwise identical plan
with mandates would cover 45 million of the uninsured — essentially
everyone — at a taxpayer cost of $124 billion. Over all, the Obama-
type plan would cost $4,400 per newly insured person, the Clinton-
type plan only $2,700.
That doesn't look like a trivial difference to me. One plan achieves
more or less universal coverage; the other, although it costs more
than 80 percent as much, covers only about half of those currently
uninsured.
As with any economic analysis, Mr. Gruber's results are only as good
as his model. But they're consistent with the results of other
analyses, such as a 2003 study, commissioned by the Robert Wood
Johnson Foundation, that compared health reform plans and found that
mandates made a big difference both to success in covering the
uninsured and to cost-effectiveness.
And that's why many health care experts like Mr. Gruber strongly
support mandates.
Now, some might argue that none of this matters, because the
legislation presidents actually manage to get enacted often bears
little resemblance to their campaign proposals. And there is, indeed,
no guarantee that Mrs. Clinton would, if elected, be able to pass
anything like her current health care plan.
But while it's easy to see how the Clinton plan could end up being
eviscerated, it's hard to see how the hole in the Obama plan can be
repaired. Why? Because Mr. Obama's campaigning on the health care
issue has sabotaged his own prospects.
You see, the Obama campaign has demonized the idea of mandates — most
recently in a scare-tactics mailer sent to voters that bears a
striking resemblance to the "Harry and Louise" ads run by the
insurance lobby in 1993, ads that helped undermine our last chance at
getting universal health care.
If Mr. Obama gets to the White House and tries to achieve universal
coverage, he'll find that it can't be done without mandates — but if
he tries to institute mandates, the enemies of reform will use his
own words against him.
If you combine the economic analysis with these political realities,
here's what I think it says: If Mrs. Clinton gets the Democratic
nomination, there is some chance — nobody knows how big — that we'll
get universal health care in the next administration. If Mr. Obama
gets the nomination, it just won't happen.
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