The federal government reports rising numbers of Americans without health insurance. A Democratic candidate for president proposes a major program to increase coverage. Congress debates legislation for health care rights.
Reading the headlines, someone might think, "Didn't we already go through this once?" But, actually, health care has reemerged as a compelling political issue under conditions almost exactly opposite those of the early 1990s. At that time there was a sense of a gathering crisis in health care; now there's a gathering opportunity--or, at least, there may be, depending on how current political battles play out.
When Harris Wofford of Pennsylvania won a come-from-behind victory in a 1991 Senate election by campaigning for universal health insurance--and thus put the issue on the national agenda--America was in the midst of a recession, and the public's economic fears found a powerful focus in worries about health coverage. Health care expenditures were rising at double-digit rates, and both private employers and government were desperate for relief. Those were the driving forces behind the interest in comprehensive health reform--"comprehensive" because it sought not just to cover everyone but also to contain costs. Indeed, for many political leaders, including Bill Clinton, one of the primary purposes of health reform was long-term reduction of the deficit.
Today, unemployment has fallen to its lowest point in more than a quarter-century, inflation is nearly flat, the federal deficit has turned to surplus, even crime rates are falling--in short, America seems to have turned around. Thus, the continued increase in the numbers of uninsured (up 1 million in 1998 to 44.3 million, or 16.3 percent of the population, according to the Census Bureau) is especially disturbing because it seems out of step with the dominant trends: If more people are becoming uninsured in good times, what will happen in a recession?
Meanwhile, the managed-care revolution has quieted concerns about rising health care expenditures. Instead, in the battle over patients' rights, the excesses of cost containment are the issue. And in the debate about the uninsured, the projected growth in the federal surplus would provide money for reform that wasn't available before.
Perhaps most important, the health reform efforts emerging today are different from those of the early '90s precisely because the earlier ones failed, and those interested in change have tried to learn from the experience.
Consider how the circumstances of the late '90s and the defeat of the Clinton plan are shaping the debate about health care in the presidential race. While Republican front-runner and Texas Gov. George W. Bush has yet to address the issue, it is central for the leading Democrats: Bill Bradley has introduced a major new federal initiative to cover the uninsured, while Vice President Gore has focused on coverage for low-income families with children. Both Democrats find money for their proposals in the budget surplus. Neither tries to set up any new governmental structures. Neither emphasizes cost containment as a goal. Both avoid mandates on employers, controls on insurers or measures that could antagonize physicians and other providers. Both try to keep their plans simple by limiting their scope.
The two Democrats, however, have limited their proposals in different ways. Gore seeks to provide "universal access to coverage" for children under 19 by 2005 by expanding the Children's Health Insurance Plan (CHIP) enacted by Congress in 1997; he would increase the number of children eligible to participate, and also allow the low-income parents of those children into the program. This approach recalls the response of reformers to the defeat of national health insurance during the Truman years. Regrouping in the 1950s, they decided that rather than seek coverage for everyone, they would focus only on the elderly. That eventually gave us Medicare.
A program for low-income families with children, however, does not have the political force behind it of a universal program for the elderly. Unlike Medicare, CHIP also depends on cooperation from the states and voluntary enrollment. Just this past week, President Clinton lamented that only one-fifth of the 5 million children currently eligible for CHIP have actually been signed up, and the number of uninsured children has continued to rise. When programs are voluntary and limited by income, their beneficiaries have a lot more work to do to qualify than do the majority of Americans who get coverage automatically from their employers or from Medicare when they reach age 65. CHIP particularly makes things more complicated, because even with Gore's proposed expansion, parents will often have to deal with a different health plan for their children than they have for themselves. As a result, Gore's program might also be insufficient to reverse the growth in the uninsured population.
Bradley's proposal is more ambitious, with a total price tag of $65 billion a year, about half of which would go into new subsidies to low- and moderate-income people for the purchase of health insurance. The plan does not purport to cover all the uninsured, but on the basis of rough calculations, Bradley's advisers estimate that it would increase the coverage to about 95 percent of Americans. To address the problems that have beset CHIP, Bradley would require parents to insure their children, much as we require parents to send their children to school or otherwise provide for their education. Still, coverage would be voluntary for adults, and many of those eligible would decline to participate because they would be eligible only for partial subsidies and might feel it was still too expensive. There is actually a risk that the program would cost less than estimated because participation would be lower than projected.
To make insurance more readily available, Bradley's proposal would open up the Federal Employees Health Benefit Plan (FEHBP) to any individuals and groups who wanted to use it to buy coverage. The defeated Clinton plan also created purchasing pools called "health alliances" but gave control of them to the states; the advantages of the federal employee program are that it's an established system known to work and it doesn't require the states to do anything.
Under Bradley's proposal, the states would become solely responsible for nursing homes and other services for the elderly, while the federal government would assume the entire burden for health care under Medicaid. This grand swap, which would make health care a federal rather than a state responsibility, accounts for $18 billion of his proposal's annual federal cost. Medicaid and CHIP would then be folded into the general program of subsidies, and their beneficiaries could enroll in plans through the federal employee system.
In the current political debate, Bradley's proposal is being greeted as a liberal initiative. But like the conservative proposals of the early '90s, it is a system of managed competition, though he has stayed away from that rhetoric. He has also limited the subsidies to a maximum of $1,800 for an individual and $5,000 for a family, which are unrealistically low amounts for good health coverage in many areas of the country. (In my conversations with Bradley's advisers, they did not seem to have yet dealt with geographic variations in costs.) Simple as the proposal may initially have seemed, there are enormous complexities in working out the details.
Bradley's proposal isn't small--it would be the single biggest expansion of health coverage since 1965, when Medicare and Medicaid were adopted. At a cost of $65 billion annually, it is the kind of big redistributive program that would have been quickly dismissed six years ago because of the deficit. Even his advisers concede that the program would cost roughly two-thirds of the projected (non-Social Security) budget surplus, and the proportion may well be higher. As a result Bradley isn't likely to have anything else nearly as big to propose in his campaign. In effect, he has staked his candidacy on health care even more than Clinton did in 1992.
The proposals from both Gore and Bradley reflect a shift back to the politics of redistribution. In the early '90s, reformers were hoping to create a coalition for health reform that included middle-class people, who, even if they had insurance, often faced such problems as insurance exclusions for "preexisting conditions." Many of these issues, however, were dealt with in the Health Insurance Portability Act that Congress passed in 1996 or are being addressed in pending patients' rights legislation. That leaves the problem of the uninsured, and it complicates the task of creating a broad enough base of support for further reform.
Will these new efforts to extend health coverage turn out any differently from the Clinton effort? It depends partly on the outcome of the 2000 campaign: A Democratic Congress and president are far more likely to take up the issue, and if the next president turns out to be Bradley, he would find it difficult to walk away from the single biggest promise of his campaign. While Bush has not yet talked about the uninsured, his support for the Republican tax cut removes the chief source of revenue for expanded coverage. In Texas, 25 percent of the population is uninsured, and the plight of these people has not been a priority for their governor.
Health insurance remains a key dividing issue between Democrats and Republicans. Now that America has rebounded economically and fiscally, how will we use the dividends of growth? That's the underlying question for the country--a very different one from that of 1993--as health care comes back into the national debate.
Paul Starr, author of the Pulitzer Prize-winning "The Social Transformation of American Medicine," was a senior adviser to the White House on health care in 1993. He is co-editor of the American Prospect magazine.