Bernie Sanders and Hillary Clinton continued their robust argument about healthcare at last night’s Democratic presidential debate in Brooklyn. Bernie touted his single-payer plan, and Hillary her cautious, incremental approach. But Hillary has no right to claim that her plan is more “practical” than Bernie’s. The likelihood that Hillary’s plan would actually work is zero. Here’s why.
Hillary: Let’s make Obamacare work better
At the debate, Wolf Blitzer asked Sanders about the fact that his plan “would cost up to $28 trillion and, even after massive tax increases…add as much as $15 trillion to the national debt. How is this fiscally responsible?” (Here at the Apothecary, we’ve estimated that Berniecare will cost between $28 and $36 trillion over ten years.)
Sanders responded simply that “I disagree” and that his plan “will save middle-class families many thousands of dollars a year in their healthcare costs” which he would pay for with “a tax on Wall Street speculation.”
Mrs. Clinton responded with her usual claim that she’s the pragmatic one. “Rather [than] starting all over again…let’s make the Affordable Care Act work for everybody. Let’s get to 100% coverage. Let’s get the cost down, and let’s guarantee healthcare.”
Hillary’s plan is toothless and contradictory
Clinton’s plan may not be as ambitious as Sanders’. She’s not trying to spend an additional $28 to $36 trillion. But that obscures a more important fact: that when it comes to Obamacare, Clinton has boxed herself in with a series of toothless and contradictory proposals.
In January, Sec. Clinton said that she wanted “to build on and improve the Affordable Care Act.” How would she do that? “I would certainly tackle cost issues,” she continued. “We are going to have to figure out how to get more competition in the insurance market.”
But Clinton is reluctant to take on a healthcare industry that has paid her more than $2 million in speaking fees. And she knows that tightening the health law’s screws would be toxic in a general election. So, instead, she has proposed incremental half-measures that will have no meaningful impact on the cost of Obamacare-sponsored health coverage.
For example, Clinton proposes restricting insurers’ ability to include deductibles and co-pays in their products. But doing so would force insurers to charge even higher premiums, making coverage less affordable than it already is. Clinton proposes allowing Medicare to negotiate prescription drug prices, something that the Congressional Budget Office has predicted “would have a negligible effect on direct spending,” and wouldn’t even apply to Obamacare-based insurance. Her proposal to force drug companies to spend more on R&D—and less on advertising—would similarly make no real difference in Americans’ lives.
Sec. Clinton is famously fluent on healthcare policy. She knows that her proposals will have no real impact on the rising cost of Obamacare-sponsored insurance. Her hope is that Democratic voters won’t notice.
Reducing the cost of health insurance—and increasing insurer competition—are worthy goals. The problem for Mrs. Clinton is that she has few politically attractive ways to achieve them.
The reason why Obamacare-sponsored health insurance is so expensive is that the law contains a blizzard of regulations that force insurers to cover a broad range of healthcare services, with large financial payouts. As there is no such thing as a free lunch, these regulations have dramatically driven up the underlying cost of health insurance for those who have to shop for coverage on their own. According to a study I co-authored with colleagues at the Manhattan Institute, in 2014 alone Obamacare increased non-group health insurance premiums by 49% in the average U.S. county.
Healthier and younger individuals have stayed away. Insurers, like UnitedHealth, are dropping out. Obamacare’s individual mandate—the infamous provision that fines those who don’t buy coverage—was supposed to address these problems. But the mandate’s fines are too weak to persuade perfectly healthy people in their twenties to pay $300 a month for an insurance product of dubious value. Even those who qualify for Obamacare’s premium subsidies are often ineligible for enough help to offset the law’s higher premiums.
Hillary is ideologically and politically opposed to making Obamacare ‘work’
Sec. Clinton could address this problem by rolling back Obamacare’s most harmful regulations, the ones that make health insurance much more expensive than it needs to be. But she is ideologically opposed to doing so.
That leaves her with one alternative: making Obamacare even more coercive than it already is. She could make the fines for failing to buy Obamacare-based plans much steeper than they are today. She could impose a regime of price controls upon hospitals and doctors and drug companies in order to, in the short term, reduce the cost of care.
This piece originally appeared at Forbes
Photo by Justin Sullivan / Getty