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For Democrats, Pragmatism On Universal Health Care

By Perry Bacon Jr.
Washington Post Staff Writer
Tuesday, July 10, 2007

In a conference call in January, the health-care debate within the Democratic Party played out before former senator John Edwards of North Carolina, who was in search of policy advice for his presidential campaign, and his wife, Elizabeth.

On one side was Ezekiel Emanuel, a doctor and bioethics expert and the brother of Rep. Rahm Emanuel (D-Ill.), arguing that the American health-care system is so riddled with inefficiencies that it needs to be blown up and replaced by a plan in which people can buy coverage themselves with a voucher.

On the other side was an economist from the Massachusetts Institute of Technology who has become possibly the party's most influential health-care expert and a voice of realism in its internal debates.

"Far be it for me to lecture you on politics, Senator Edwards," Jonathan Gruber recalled saying, and then he did just that. He told Edwards that whatever the merits of Emanuel's idea, it just would not be politically viable. Instead, Gruber argued for a more incremental approach, like the one in Massachusetts he helped write. Its central elements would be providing subsidies to people who are unable to pay for health care, increasing the number of those who are enrolled in public programs such as Medicaid and creating a public agency to help anyone ineligible for the programs buy health insurance.

A month later, when Edwards announced his health-care plan, he almost completely sided with Gruber. And he is not alone. For the first time since President Bill Clinton's plan for health-care reform, overseen by his wife, collapsed in 1994, the leading Democratic presidential candidates are campaigning in favor of universal health care. But in developing their specific plans, they are embracing the pragmatic steps advocated by the MIT professor and a group of similar-minded policy experts, many of whose ideas were shaped by their first exposure to the perils of health-care politics 13 years ago.

"Plans which minimize the disruption to the existing system are more likely to succeed than plans that rip up the existing system and start over," said Gruber, who has consulted with the three leading Democratic campaigns about their health plans. "It doesn't take a genius to see that. That's not to say that plans ripping it up wouldn't be better -- I just think they're political non-starters."

Two of those candidates, Edwards and Sen. Barack Obama (Ill.), have endorsed the idea of universal coverage and suggested ways to achieve it, and the third, Sen. Hillary Rodham Clinton (N.Y.), is expected to outline her ideas in the next few months. Obama's plan does not require adults to obtain health insurance, a distinction that Edwards has tried to exploit because his aides say that without such a requirement, Obama's plan would not ensure coverage for everyone.

While the war in Iraq dominates the campaign, polls show that Democratic primary voters rank health care as their top domestic concern after the economy. To many liberals, the health-care system is just as bad as it is portrayed in Michael Moore's new documentary, "Sicko."

To move toward universal coverage, Edwards, Clinton and Obama have approaches that borrow from the Massachusetts model. That plan, regarded as one of the nation's most innovative, took key elements of the 1993 Clinton plan and made them practical politically -- so practical that the plan was enacted in 2006 by a Democratic legislature with support from a Republican governor, 2008 presidential candidate Mitt Romney.

The original Clinton plan envisioned creating public agencies in states and nationally to oversee health care, and setting guidelines about how much insurance companies could charge and what benefits they would offer.

Edwards and Obama are proposing to create similar entities, but they would mainly provide coverage for the uninsured. Clinton is likely to adopt a similar policy, according to health-care experts who have spoken to her campaign.

The initial Clinton foray into health care required employers to provide all their workers with insurance. Now Democratic candidates are telling employers that they would not have to do that, although their plans would require employers that do not offer insurance to pay a tax. And for those who are happy with their insurance coverage, nothing would change, except the candidates say it would be less expensive and more efficient through systemic reforms such as computerized record-keeping.

A major component of the Massachusetts model is an "individual mandate" requiring that people buy insurance or face a penalty, usually not receiving a tax deduction. The idea is that once health insurance is affordable, everyone should be required to have it and taxpayers should not have to cover the bills of the uninsured.

Gruber championed this idea in Massachusetts, and over the past year he did the same in Obama's office, on the phone with Edwards and in conversations with Chris Jennings, Hillary Clinton's health policy guru. Edwards adopted it, and Clinton has suggested that she supports it as well. Such a mandate was in her 1993 plan.

Obama aides argue that people fail to buy insurance because they cannot afford it, not because they do not want it, so the senator from Illinois has not included a similar mandate in his proposals, focusing instead on reducing costs. Political caution in part motivated the decision, concede some Obama advisers who worry that such a mandate might be politically difficult for a president to enforce.

Gruber told Obama advisers that they should include a mandate. He said that without the mandate, Obama's plan would shrink the number of uninsured from 15 percent to 6 percent. Obama's aides said that they think they could achieve universal care without a mandate, but that they would add one if they did not.

"You get in your head that you cover 98 percent of people and you get yelled at for 99 percent," said David Cutler, a Harvard economist advising Obama. "Yeah, I'm a little surprised" by the attacks, he said.

Obama and Edwards have called for raising taxes on people who make more than $250,000 to finance additional health-care spending. Clinton has suggested she would look for savings in the health-care system to pay for her plan.

Massachusetts had a large amount of money already devoted to covering the uninsured. But because the federal government does not, any of the Democratic plans would involve increasing taxes or the deficit.

All three Democrats support a provision similar to another part of the Massachusetts plan that would require businesses either to offer insurance to their employees or pay a tax. Fourteen years ago, a similar proposal helped drive opposition to Bill Clinton's heath-care plan.

Edwards and Obama have embraced one potentially radical idea: Their plans each include an option for people to buy the kind of health coverage that is offered by Medicare for older Americans. If most Americans chose that option, it essentially would create a government-run health-care system. Edwards, the most aggressive of the leading candidates in courting the party's liberal base, mentions this aspect of his plan frequently, whereas Obama almost never does.

Republican presidential candidates, wary of large plans that call for tax increases, have depicted the Democratic proposals as "socialized medicine." Romney is among them, even though the law he signed as governor of Massachusetts has been a model for Clinton, Edwards and Obama. In fact, the Democratic plans represent an attempt to balance the demands of a liberal base and avoid anything that smacks of too much government intervention, the accusation that helped kill the 1993 Clinton proposal.

Hillary Clinton's advisers, reasoning that reducing health-care costs is the top priority for the 90 percent of voters who have coverage, have so far outlined only the cost-cutting parts of her agenda. She will give speeches later in the year on improving quality and insuring everyone, but her aides wanted to talk about reducing costs first.

"You have to speak first on reducing costs and improve quality before pouring more money into what people think in many ways is a sub-par system," said Gene Sperling, who was a top economic adviser to Bill Clinton and is now helping Hillary Clinton's campaign.

But some health experts argue that it is hard to imagine the savings the Democrats are touting without some painful measures, such as allowing insurance companies to restrict the kind of procedures or the choice of doctors that Americans have. "There is an idea you can somehow do all these things controlling costs without anybody doing anything they don't want to do," said John Sheils, who studies health-care plans at the nonpartisan Lewin Group. "These are tough questions."

Clinton advisers concluded early on that whatever the bad memories of 1993, she had to talk about health care. So she has been the candidate who has acknowledged that the 1993 experience frames everything Democrats do on the issue. "I've got the scars to show for it," Clinton said. "I've been through it, but that just makes me more determined."

Obama has seemed the most reluctant to wade into this debate. At a health-care forum in Las Vegas in March, he said that "every four years, somebody trots out a white paper, they post it on the Web" and nothing gets passed, suggesting that it was more important to focus on building a political consensus on reforming health care than on creating more complicated plans.

But the next month, when Victor Fuchs, an economist who studies health care at Stanford University, told some of Obama's advisers that the campaign should offer general principles on health care and not a plan, the response surprised him. Pundits in Washington would write that the campaign was not offering enough details, they told him, so they had to offer a plan if only to preempt that criticism.

Ezekiel Emanuel has not been impressed by the candidates' efforts on health care. When Edwards released his plan in February, he blasted it in an e-mail to one of the candidate's aides, saying it was hard to figure out why someone seeking the Democratic nomination was backing a health-care approach crafted by Romney, a Republican.

"I don't think they're very bold," Emanuel said. "I don't actually think they solve the problem."

Gruber disagrees. Yesterday he expressed satisfaction that Democrats have "a sense of realpolitik, of understanding the limitations of what the American voters will go for, while still moving toward the goal of universal coverage."

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