The president, of course, was Bill Clinton, and his health-care plan ultimately failed in Congress. It wouldn’t be until 2010 that a comprehensive reform bill would be signed into law. But with that law’s future in doubt — it goes before the Supreme Court this week, and even if it withstands that challenge, every Republican presidential candidate has promised to repeal it on “day one” — it’s worth looking back and asking what would have happened if Clinton had succeeded, and we had started down this path almost 20 years ago.
The plan was legendary in its complexity. In its February 1994 assessment of Clinton’s legislation, the Congressional Budget Office wrote, “The proposal’s scope is broad, and its attention to detail is extraordinary. It provides a blueprint for restructuring the entire health care system, complete in almost every particular of the design. In this respect it is unique.”
That’s either carefully worded mockery or a genuine compliment. But for all the plan’s vaunted complexity, a summary is possible: The plan relied on contributions from employers and individuals to finance a universal health-care system. Most non-elderly Americans would buy coverage from “regional alliances” in which many insurance plans competed — with transparent pricing and significant regulation — for their business. The subsidies would be structured so that people who chose more expensive plans had a higher out-of-pocket cost. If premiums grew faster than the law expected, there would be automatic spending cuts to bring prices back into line.
In certain ways — the alliances and the centrality of private insurers — Clinton’s plan was much like the Affordable Care Act. In others — its remaking of the employer-based system, its limits on premium growth, its reliance on employer contributions, its phasing out of Medicaid — it was vastly more ambitious and intrusive than what the Democrats passed in 2009. Whereas the Affordable Care Act was designed to leave the insurance arrangements of most Americans untouched, Clinton’s plan would have changed how most Americans received health insurance.
In part for that reason, it also might have done much more to control costs. The proposal included the now-standard efforts to encourage competition between insurers and pay providers for quality rather than volume, but it backstopped the system by instituting what exists in every other country: a strict budget for health care. Specifically, the bill capped the growth of premiums at a blend of the inflation rate and the growth of the broader economy. Between 1994 and 2010, that would have been about three percent annually. The real growth rate was 5.2 percent.
So let’s assume, as seems likely, that the Clinton plan would have partially succeeded and partially failed —Congress would have lifted the cap in some years and stuck to it in others. The competition between insurers and the efforts to promote pay-for-quality would have done some good, but not quite as much as the law’s framers had hoped. And so, rather than cutting cost growth by 2.2 percent annually, the new system cut it by one percent annually. Total savings to the American public between 2010 and 1994? About $2.7 trillion. In 2010 alone, national health spending would have been $390 billion less.
There’s a big “if” here, of course: that the proposal would have worked at all. But it’s hard to believe that a coherent national strategy to build a competitive health-insurance market wouldn’t have been better for cost control than the chaotic, fractured status quo. After all, every other nation that’s developed a national health-care system has costs far below those of the United States.
Meanwhile, what we know for sure is that the Clinton plan would have covered almost every American. The Urban Institute, working off numbers developed by the Institute of Medicine, estimates that 22,000 Americans died in 2006 because they were uninsured. The Clinton plan would likely have prevented most of those deaths, and that’s to say nothing of the people who were disabled, developed chronic conditions or were financially ruined because they didn’t have insurance and access to early, effective or affordable care.
The Clinton plan wasn’t perfect. It was, however, a start. It would have taken this mess that we call a health-care system, ironed out some of its worst inefficiencies, and created a structure for cost control. As time went on, Some parts of the law would have worked and some others would have blown up in our faces. We could then have learned from those experiences and improved the law by doubling down on the successes and removing or reforming the failures. We could, in other words, have begun the messy, long, but necessary process of building a better health-care system.
“We’ve learned a lot over the last 15 years,” says Robert Reischauer, who led the CBO in 1994. “But we would have learned a helluva lot more if we’d been trying to make a reform work.”
Instead, we permitted almost two decades of drift. And here we are, 18 years later, with our problems worse, and our potential solutions much the same. That’s 18 years we could have spent improving the health-care system. It’s 18 years that we instead spent doing nothing, and lowering our ambitions.
“One of the worst legacies of the Clinton plan was that its failure created this sense that nothing was possible save for really small-scale action,” says Yale’s Jacob Hacker, author of “The Road to Nowhere: The Genesis of President Clinton’s Plan for Health Security.” “What we had needed to do was take two steps forward, then maybe another step back, then maybe two more steps forward.”
Indeed, like the Clinton plan, the Affordable Care Act is an imperfect compromise. Some parts of it are likely to work better than we expect — the early returns from the law’s efforts to push beyond fee-for-service medicine are, for instance, quite encouraging — and some parts will be colossal failures. But unlike the Clinton plan, it’s been passed into law, and is a platform on which to build a better health-care system. The question now is whether we repeat the multi-trillion dollar mistake we made more than a decade ago and, rather than moving forward, settle back into the costly, inhumane status quo. Can we really afford another 18 years of drift?