“Universal Coverage” – Only Words

April 21, 2008

It’s only words, but words are all I have to steal your heart away …1

My wife and I stood at the curb saying goodbye to our friend Maureen last week. The election came up, and Maureen said “I like the candidate that’s going to provide universal coverage.” Here’s the problem: there’s no such candidate this year. Maureen’s been had.

But first, a question: What’s wrong with this sentence, from my friend Joe Paduda’s informative write-up of the World Health Care Congress, referring to the difference between the Clinton and Obama health plans?

“… [Clinton] wants mandated universal coverage and [Obama] does not.”

The italics were a hint: Joe and I agree, as does our mutual friend Bob Laszewski, that the two plans are essentially similar. But their primary difference, which is that the Clinton plan includes mandates for adults, can not accurately be described as “universal coverage.” The Massachusetts experience has demonstrated that conclusively.

Even if a mandate plan were to be passed, millions of today’s uninsured would – by my estimation – remain uninsured. Millions more would benefit, as they would under a non-mandated plan, but we’d have nothing like genuine “universal coverage.” And many working Americans would face new financial pressures, without receiving better health coverage in return.  (My numbers and logic are laid out in a footnote.)

I expressed early and serious concerns about the Massachusetts plan, and there’s no pleasure in reporting that they have proved justified. The plan’s been very effective in providing coverage for those who qualify for full subsidies. But it has been far less effective for lower-income working people. Subsidies don’t reach them, and the difference between plan premiums and the mandated tax penalties they face is still a big-dollar amount for their budgets.

The result? These hard-pressed Americans still don’t have health coverage … and they’ve been hit with more taxes.

The Massachusetts plan is a lot like Clinton’s, in a state with a much less complex uninsured problem that other parts of the country – and it’s been forced to exempt 20% of the uninsured. That’s not “universal coverage,” it’s health mandates – and while it will provide coverage for some, many will fall through the cracks.

Why does this matter? Why am I harping on the choice of words? Because perception drives reality in politics. Maureen thinks her candidate will provide “universal coverage” if elected. Here’s what will really happen if Maureen’s favorite gets the nomination – she’ll be hammered by her opponent in the general election over the enormous added tax burden to lower-income working families. If she wins, her plan will face far greater political opposition because of the mandate provision – which will most likely be dropped as a result. If, against all odds, these obstacles are overcome and a mandate provision is passed,

Based on rough calculations, I agree that Obama’s plan would leave approximately 15 million uninsured. But I estimate that Clinton’s plan would leave 8 million uninsured – and is far less likely to pass in Congress.2 (Each plan has its own strengths in the cost-cutting and health oversight areas – and McCain’s isn’t really a “plan.” It’s more of a “wealth-transfer-device” for the already well-to-do … but that’s another topic.)

What about the argument that a mandate plan can’t pass?

Not so, says Paduda. He quotes Obama surrogate Rep. Jim Cooper as saying the mandate provision – which Joe again mischaracterizes as “universal coverage” – will get “zero Republican votes,” which he calls “a completely wrong statement.” Joe cites the mandate-driven Wyden Health Plan, with six Republican co-sponsors, as proof.

But the Wyden plan, which takes employers out of the health insurance game, has a couple of carrots to offset the “mandate” stick. One’s for working people: It requires employers who currently provide coverage to boost salaries to offset for the huge expense savings they’ll get. That puts money back in people’s pockets. The second is for employers: Salaries are rising at a much slower rate than health premiums, and they have more control over them, so this is a financial win – especially for larger corporations.3

I’ve talked to many employers over the years – large and small – who would love to get out of the health benefits business. And I’d argue that the Wyden bill can be pitched as more attractive to lower-income working people. I suspect these differences make the Wyden bill GOP-friendly enough to offset for its universal coverage mandate provisions. (That said, it’s excessive of Rep. Cooper to suggest that a mandate bill would get “zero” Republican votes. There might be handful, but probably not enough to pass …)

So we watched Maureen pull away from the curb, content in her belief that at least one Presidential candidate would bring the country “universal coverage.” Can’t blame her: a lot of smart people think so, too.

Too bad life ain’t so simple …

_____________________

1What would a wonkish health policy post be without quoting at least one Bee Gees song? Others I could have cited here include “Stayin’ Alive” – and, of course, “Massachusetts.”

2Quick and dirty calculation: Massachusetts, which is demographically less challenging than other parts of the country (fewer illegal immigrants, etc.), was forced to exempt 20 percent of the uninsured from its plan. Planners in more variegated California expected that 30% would have to be exempted. So, even the generous assumption that mandates will do as well nationally as they have in Massachusetts gives us a 20% exemption rate. If we assume 40 million uninsured nationwide, then 20% = 8 million. That ain’t universal. Thus, the difference between an Obama plan that excludes 15 million and a Clinton plan that excludes 8 million is 7 million.

What’s left to consider? First, whether you think a mandate plan can pass Congress. If it can’t, everybody loses. Second, your personal opinion of whether mandates for hard-pressed working families are a) a way to force them to pay their fair share, or b) another regressive tax that places too much burden on those at the lower end of the spectrum.

3Re the Wyden plan, I like the concept. Unfortunately, though, I can see a number of ways that employers could game it. But that’s for another day.

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8 Responses to ““Universal Coverage” – Only Words”

  1. John Says:

    When it comes to health insurance quotes, health insurance plans and universal health insurance, who’s going to pay the cost? A universal health plan would be nice, but many people often forget it needs to be funded somehow.


  2. […] well as a similar number of illegal immigrants) will remain uninsured. That’s very close to the figure of 8 million I came up with a year ago, using back-of-the-envelope calculations based on Massachusetts […]


  3. […] position, as we explained here in 2007. And it’s not even “universal,” as we explained in early 2008. That’s why Obama was able to score some points against his opponents in the primaries by […]


  4. […] then we tried pointing out that the Clinton/Edwards/Heritage Foundation approach would not provide “universal coverage” and was un-progressive (see also, “How […]


  5. […] then we tried pointing out that the Clinton/Edwards/Heritage Foundation approach would not provide “universal coverage” and was un-progressive (see also, “How […]


  6. […] then we tried pointing out that the Clinton/Edwards/Heritage Foundation approach would not provide “universal coverage” and was un-progressive (see also, “How […]


  7. […] then we tried pointing out that the Clinton/Edwards/Heritage Foundation approach would not provide “universal coverage” and was un-progressive (see also, “How […]


  8. […] then we tried pointing out that the Clinton/Edwards/Heritage Foundation approach would not provide “universal coverage” and was un-progressive (see also, “How […]


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