Understanding the US health care debate (2)

Part II. Earlier attempts to fix the system

Many initiatives and proposed solutions to the health care system have been revolving around increasing coverage and reducing costs (see my earlier post about the problems). Options for increasing coverage include mandating individuals to purchase health insurance (and imposing a fee for those who opt not to), usually combined with subsidies for the poor, and providing tax-incentives. Many analysts and politicians believe the US should have an individual mandate. Without it, many young, healthy individuals may choose to be uninsured, means the average health among the pool of insured will go down, hence insurance premium will stay high or go higher.

Attempts to reduce cost range from introducing more competition to the insurance and health care market, imposing a cap on price, limiting what medical procedures that the government would reimburse, to introducing more complex and bureaucratic regulations or regulatory bodies.

The New York Times has a nice interactive timeline of the comprehensive history of US health care reform. I

Clinton's 1993 proposal

Introduced by President Bill Clinton, efforts was led by First Lady Hillary Clinton, who chaired the National Task Force (hence the nickname Hillarycare dubbed by the opponents). The key components of the plan were:

1. Mandating all eligible U.S. citizens to purchase health care, and employers of all businesses and all sizes, to provide insurance for their workers.
2. Standardizing benefits - the plan listed minimum coverages and maximum annual out-of-pocket expenses for each plan.
3. Establish a National Health Board in charge of regulating all health care in the country.

The proposal, as we know it, failed. Many possible explanations on why it failed. But the most common arguments are it was too complex, too ambitious, and lack of incrementalism - although moving to single-payer system, oddly, was not part of the plan. Later in 2000, Mrs. Clinton remarked that the US needs a more step-by-step approach in achieving universal coverage.

Partisan politics have off course contributed, though many analysts said that supports from Democrats grassroots were not too solid anyway. Then there was also resistance from the big pharmaceutical companies. Plus, an economic dip in the early days of the administration did not help. But the Clintons were also criticized for their lack of efforts in reaching out to the opponents and making the plan simpler for the wider audience.

Massachusetts 2006 reform

In 2006, the Commonwealth of Massachusetts enacted a Law that requires nearly every resident to obtain health insurance. Through the Law, the Commonwealth government also provides free health care and partial subsidies for low-income residents. The Law was a result of a bipartisan coalition. However, the original proposal was initiated by then governor and 2008 Republican primaries candidate Mitt Romney.

Another aspect of the plan is the creation of a health insurance “exchange.” Basically, it was a clearing house to help small firms from conducting complex negotiations with insurers. Employees will be able to choose any plan approved by the state-backed exchange, and their premiums will be deducted from their pay checks.

From Fall 2006 to Fall 2007, the number of uninsured among low-income adults dropped from 24% to 13%, while among the higher income the number dropped from 5% to 3%. As of 2008, overall rate of uninsured has dropped further to 2.6%. The Massachusetts reform has been widely referred to as the model for the national-level reform by both Clinton and Obama during the 2008 Democratic primaries (although it did not provide enough leverage for Mitt Romney himself).

However, it was not immune from criticisms. It has strained the state budget, and a future budget crisis may be a consequence, failed to reduce medical spending, has subsequently drawn funding away from crucial health resources such as emergency room care, in practice the plan is not affordable for many families, and increased queues for already crowded medical services.

Some smaller attempts

A bipartisan Patient's Bill of Right, articulating a list of positive rights which doctors and hospitals ought to provide patients, thereby providing information, offering fair treatment, and granting them autonomy over medical decisions, was debated in Congress, but failed to pass as a Law. In 2003, President George W. Bush signed a Law that expanded Medicare to cover prescription drugs. Health care reform was one of the issues during Bush-Kerry 2004 debate. But in his second term, there was no major initiatives. Instead, the Bush administration was locked in a heated debate on reforming the country's social security.

The 2008 presidential campaign

John McCain's proposal was in fact closer to traditional Democrat's position than many Republicans. He supported importing drugs from Canada, which should make him an enemy of the pharmaceutical industry. He wanted Medicare to negotiate bulk discounts with the industry, which was always opposed by the Republicans.

The differences were, first, instead of mandating individual, he proposed to give tax credits as incentives for individuals to purchase health insurance.

Second, to curb the overuse of technology and needless medical procedures, he wanted to change the incentives by scrapping payments for individual procedures in favour of giving fixed payments to doctors and hospitals for actually solving particular health problems.

Third, he also wanted to impose caps on damages for malpractice and rule out awards for punitive damages - something that would put him into a war with the lawyers.

In many ways, candidates Clinton and Obama's proposals were quite similar. Both proposals offered Massachusetts-like mandate-and-subsidy schemes. Both plans would also force insurance companies to provide coverage for all (for example, by making it illegal to turn down new applicants with pre-existing medical problems). Particularly for Clinton, hers was a substantial simplification of the 1993 ambitious plan.

The differences between those two were, first, Clinton's plan would require all individuals to have health insurance, while Obama's would only require children, hence his was less ambitious in achieving the universal coverage.

Second, Clinton planned to oblige all firms in all types and all industries to provide covers for their employees. She would also introduce a tax-break reform for employer-based coverage but small firms would be subsidized. Under Obama's plan, firms would also be required to provide insurance for their workers, but small firms would be exempted, and tax-break reform was not part of his proposal.

Bear in mind that these were their proposals as candidates. There is a big gap between the campaign and the White House version, as shown in history. They'd need to face battle with the Capitol Hill, as well as do reality checks. President Obama's health care plan has not been revealed until after a year. When it was finally revealed, it was not a clear one, while at least two versions of the bill, one by the House, the other - a stronger one - by the Senate, have been introduced. And the battle continues.