How to Oppose the Health Plan—and Why

Health care politics are now at a stalemate: Public enthusiasm for the president’s plan has precipitously declined, but its opponents have failed to capitalize on its obvious flaws and kill it outright. This is just a temporary lull, however. The plan is due for resuscitation–unless a strong counteroffensive is mounted. In political terms, that task falls mainly to members of the Republican Party. What form should their opposition take?

A simple, green-eyeshade criticism of the president’s health care plan–on the grounds that it’s numbers don’t add up (they don’t), or that it costs too much (it does), or that it will kill jobs and disrupt the economy (it will)–is fine as far as it goes, but it is not enough. Such opposition can only win concessions on the way to a "least bad" compromise.

But passage of the Clinton health care plan in any form would be disastrous. It would guarantee an unprecedented federal intrusion into the American economy. Its success would signal the rebirth of centralized welfare-state policy at the very moment that such policy is being perceived as a failure in other areas. And, not least, it would destroy the present breadth and quality of the American health care system, the world’s finest.

Even with so much against it, however, the Clinton plan will not be easy to defeat. To get bipartisan backing and lure wayward Republicans, Mr. Clinton will of course make concessions. Most important, in two weeks he will give a nationally televised State of the Union address that will no doubt be devoted to advertising his plan’s glories–and reminding his audience how supposedly perilous their own "health security" remains. Indeed, ever more fearmongering should be expected. A White House official was quoted last week saying: "We need to return to the crisis atmosphere."

The next 100 days are thus critical. For opponents of the plan, the risk is that the president will recapture the high ground on health care, leaving them merely to complain about flawed financing and cumbersome bureaucracy. But the opportunity also exists to wrench the debate from the president by redefining both what is at stake and how reform should proceed.

First, opponents must insistently show that the Clinton Plan is damaging to the quality of American medicine and to the relationship between the patient and the doctor. Second, they must aggressively debunk the administration’s "crisis" rhetoric, which in any case is merely a justification for it’s radical reforms. Even the Democratic chairman of the Senate Finance Committee, Sen. Daniel Patrick Moynihan, acknowledged over the weekend that, "we don’t have a health care crisis in this country." Republicans should have the courage to send the same message.

Having shown that the Clinton plan is radically dangerous and fundamentally unnecessary, Republicans should act with dispatch to advance meaningful reform alternative: not a competing "plan," but a set of proposals targeted at the specific and limited problems that are of greatest concerns to most Americans.

The chief value of small-scale, focused reforms is that many of them already enjoy stated support from large numbers of Republican and Democratic lawmakers. Indeed, an incremental approach to health care reform was advocated as recently as 1992 by now Treasury Secretary Lloyd Bentsen, whose Senate Finance Committee reportedout one set of proposals. At the time, Sen. George Mitchell (D., Maine), apparently recognizing that such a plan would rob the Democratic Party of a key election-year issue, stopped it from coming to a floor vote.

To block such measures now, however, would be to stand in the way of reforms that most Americans would welcome. Such a position on the part of Democrats would, in turn, undermine the already thin rationale for the president’s elaborate network or regulation and price controls.

In sum: opponents of the Clinton health plan should immediately propose simple federal legislation that fixes the most serious problems in American health care–and force the president to explain why he says no to it.

Below, some discrete health care reforms that should be advanced vigorously, and if need be, repeatedly, in Congress over the next few months:

-Reform insurance markets to make health insurance stable and portable.

Minor changes to existing COBRA legislation would allow currently insured workers, whatever the number of employees at their company, to continue their health coverage even after they leave their jobs and by paying premiums directly to the insurer. This reform would guarantee access to uninterrupted health coverage to all Americans who are now dependent on their employer for insurance. Additional small reforms could extend the same guarantee to individuals once covered as a dependent–a woman who separates from her spouse, for example.

-Limit pre-existing-condition restrictions under employer health plans.

If Congress adopts measures to assure everyone already in the health insurance system that his or her coverage cannot be denied in the future–even with a change of jobs or a move–the widespread fear of being dropped or turned down by an insurance plan because of a severe illness will evaporate. These provisions could also guarantee that individuals with a pre-existing condition who have health insurance but have to change insurance carriers, would be charged no more for their new plan than the normal premium rate charged to all new customers.

-Eliminate barriers to small business insurance pools.

According to a study by the Employee Benefit Research Institute, 20% to 30% of employees at firms that employ fewer than 100 people are without health insurance. If existing regulatory barriers involving geographical proximity and common business practice requirements were eliminated, more business groups could purchase health insurance collectively through pools or tax-exempt trusts, increasing their bargaining power and dramatically reducing their costs.

-Lower insurance premiums by making them tax-deductible.

Today, people who receive health coverage through their employers are not subject to taxation on those benefits. By contrast, the self-employed who purchase their own insurance are given only a 25% tax deduction. Making health insurance fully deductible–for both the self-employed and workers who employers do not provide it–will lower the price of health care insurance and make it more accessible.

-Permit the establishment of medical savings accounts.

Currents tax law permits employees to set aside income in a tax-except account to be used for medical expenses. A slight change to the tax code allowing such accounts to roll over would effectively permit the establishment of medical savings accounts. Further small changes would permit the self-employed to have their own "medical IRA’s." If such accounts were used in concert with lower-premium catastrophic insurance plans, individuals would have more control over their health care spending and costs would come down.

-Reduce costs through malpractice reform.

Medical malpractice insurance is among the fastest growing components of a physician’s business costs. Proposals to alter this perverse aspect of tort law are a common component of several current and past health care reform plans.

-Simplify health care paperwork through administrative reforms.

The burden of health care administration could be eased by the creation of a standard claims form and data set. A host of other steps to reduce health care fraud and improve information collection have already been proposed in Congress. The cost savings of all these measures would be substantial.

-Reduce Medicaid and Medicare expenses by lifting the regulatory burden on states.

Republican governors in California, Wisconsin, Massachusetts and elsewhere have already begun to reform health care by enacting some of the measures listed above at the state level. Federal regulations on state Medicaid and Medicare programs should steeply be rolled back to give governors the flexibility to supervise them as they see fit.

-Provide health insurance tax credits or vouchers to low-income families.

For those working heads of households who are not poor enough to qualify for Medicaid but still find the cost of an insurance plan beyond their reach, a government voucher or tax-credit system could help defray the cost of adequate coverage. This proposal is not without some expense. But much of it could be financed by redirecting federal payments already made to states for hospital costs incurred through the treatment of low-income individuals. Whatever form it takes, a tax-credit or voucher system would increase access to health insurance for low-income Americans–without a vast system of employer mandates, price controls, government rationing and mandatory alliances.

There are other possible reforms, of course. But these at least point in the right direction. To repeat: The president’s plan would have a seriously detrimental effect on the quality of medical health care. And the president’s plan is unnecessary: There is no health care crisis, and the reforms suggested above show how real problems can be directly addressed. That is the most effective argument that opponents of the Clinton plan can make in the opening months of 1994.

Mr. Kristol is chairman of the Project for the Republican Future. This article was published Tuesday, January 11, 1994.