Dems Propose Variety of Plans To Reform Healthcare

Flurry of Initiatives Released, But How the Public Will Respond Remains an Open Question

By E.J. Kessler

Published May 30, 2003, issue of May 30, 2003.

The last Democrat in the White House, President Clinton, hoped to make healthcare reform a centerpiece of his first administration.

But the plan his office produced proved so mind-numbingly long, complex and abstruse that it became a symbol for everything that was wrong with “big government.” In 1994, his proposal was resoundingly defeated.

For years, Democrats seemed seared by the experience and declined to venture any comprehensive healthcare reform plans — until several weeks ago, when the top presidential hopefuls began releasing a flurry of initiatives.

Representing a variety of approaches, the candidates’ proposals are all less ambitious than Clinton’s, which would have overhauled a segment of the economy that represents one-seventh of the gross domestic product. The new plans, according to their proponents, can be funded by rescinding all or some of President Bush’s tax cuts.

Rep. Richard Gephardt of Missouri, the first out of the gate on the subject of healthcare, proposed extending insurance coverage to all Americans by offering a sweeping — and, at about $105 billion a year, expensive — tax subsidy to businesses if they would insure all employees.

Senator John Kerry of Massachusetts and former Vermont governor Howard Dean, in contrast, took the “incremental” approach of covering many of the 41 million uninsured Americans by expanding tax credits, insurance purchasing pools and public programs. Dean, himself a doctor, put forth a plan that concentrates on insuring children and making the family, not the workplace, the focal point of insurance; it would cost $88.3 billion a year — “less than half of the president’s tax cut,” he says. Kerry’s plan, meanwhile, proposes various measures to contain healthcare costs and would run $72 billion a year on average for the first five years.

Connecticut Senator Joseph Lieberman, for his part, has yet to release a comprehensive health plan, but is proposing a $150 billion American Center for Cures to speed the development of cures for chronic diseases, which eat up a large part of the health dollar.

“The Democrats are in the business of trying to reframe a debate that is much larger than healthcare — it’s about overall economic policy,” said Henry Aaron, a public policy analyst at the liberal Brookings Institution. “If Bush frames the debate as ‘Do you want a tax cut or not?’ he’s won. The Democrats say that’s not the right way to frame it. It should be, ‘Do you want a tax cut or the public services those taxes could finance?’”

Aaron stressed the similarities between the Gephardt, Kerry and Dean plans. “All three are doing a major service by reminding the public you can’t have a government that does much without sufficient revenue.” Nevertheless, he averred that “the debate is going very much against the Democrats” because “the Republicans are putting the public sector in a fiscal bind that it will be next to impossible to get out of for decades.”

While Aaron placed himself in the “incremental” school, he said the Democrats, as a matter of strategy, should concentrate on ripping the president’s performance on healthcare rather than criticizing each others’ ideas. “It would be unfortunate if they fell into that trap instead of focusing on the commonalities,” he said. “It’s a Faustian bargain if they climb all over each others’ wounded bodies for the nomination.”

Jeff Lemieux, a healthcare analyst at the Progressive Policy Institute, an arm of the centrist Democratic Leadership Council, is another incrementalist who eschews “big bang” reforms such as state-based single-payer programs, Medicare expansion and sweeping employer mandates in favor of “non-ideological” approaches.

Lemieux told the Forward that elements of his institute’s approach — for example, an emphasis on tax credits and subsidized purchasing pools — can be seen in the plans of Kerry and Dean. Where Kerry’s and Dean’s plans differ from the institute’s approach is in their reliance on public plans, such as states’ Child Health Insurance Plus program. As a rule, the public programs “don’t get high coverage rates,” and so the institute prefers tax credits because they reach more people, Lemieux said. Gephardt’s approach does not reflect Progressive Policy Institute thinking, Lemieux noted.

Gerard Anderson, a professor at the Bloomberg School of Public Health at Johns Hopkins University, said that he “would love” to be able both to cover the uninsured and to cure chronic diseases, but if he had to choose one, he would choose Lieberman’s proposal. “There are 125 million people with chronic diseases who realize that the healthcare system is not working for them, because it is designed around acute care,” Anderson said. He called Lieberman’s initiative “the most innovative” and said it would resonate because it “addresses a key problem not addressed heretofore.”

Sarah Horowitz, founder and executive director of Working Today, an advocacy group that offers union-like benefits for freelancers, said she was “encouraged” by the Democrats’ plans, because they all propose some measure of refundable tax credit for healthcare. On the whole, however, the plans “just plug the holes” rather than propose a national system of benefits, which she thinks is what is needed in the new economy. “It could be in the form of a Republican voucher or a Democratic direct subsidy,” she said. “It doesn’t have to be a big debate. The system is falling apart.”

But whether the Democrats’ various approaches fly as a matter of politics or policy remains to be seen. While the public professes to prefer Democratic approaches on healthcare and a host of domestic issues, it still trusts Republicans much more on national security issues, an advantage that must be neutralized before any Democratic strategy based around domestic issues can be essayed, according to a memo circulated by strategists James Carville, Stan Greenberg and Bob Shrum of the Democracy Project.

Then, too, some have faulted the Democrats for timidity after the failure of Hillary Rodham Clinton’s healthcare initiative. Writing in the May 27 issue of The Wall Street Journal, “Political Capital” columnist Alan Murray chided the Democrats for shirking “fundamental, market-based reforms — such as the voucher-style plan proposed by former Sen. Bill Bradley in his presidential campaign.”

“So what the Democrats are left with is a grab bag of subsidies, tax incentives and regulatory plans designed to try to force the current system to serve more people and, in some cases, to keep down costs,” Murray wrote. “The proposals all lead to the government’s picking up more of the costs of healthcare, but they do little to create a market-based system that would control those expenditures.”



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