McCain’s and Obama’s Inconsistent Health Care Reform Principles

Picking inconsistencies in the positions politicians take is too easy to qualify as a sport. They have to take stands on such a wide variety of issues it’s asking too much for all of them to fit into a consistent and persistent political philosophy. Pointing out the contradictions can thus be seen as a cheap shot. Then again, Lou Dobbs has made a career out of cheap shots, so what who am I not to play the game? Fittingly for this blog, there were two examples of this consistency that become apparent when you examine their their positions on health care reform.

1. McCain’s Anti-Federalist Health Care Reform Plan

Senator John McCain described himself as a “Federalist” last night. This was in the context of his explaining that the Supreme Court should reverse Roe v. Wade and leave it to each state to determine how abortion will be treated within their own boundaries. Federalism emphasizes the portion of the United States Constitution that reserves to the states powers not specifically assigned to the central government. It reflects the belief that, because voters are closer to their own state governments than to the federal government in Washington, the state is best positioned to reflect their will and protect their interests.

How surprising then that a core plank in Senator McCain’s health care reform plan is to allow health insurance companies to sell in every state benefit packages approved in one state. The result will be a rush by carriers to file their plans in the least regulated, most insurer-favored state. And it won’t take them long to identify this lowest common denominator jurisdiction. I give it three days max.

Here’s how Senator McCain’s free-for-all approach to regulation would work. Consumers in, say, California could purchase health plans approved by the Arizona Department of Insurance. I’m sure the regulators in Arizona are fine, upstanding defenders of consumers interests. But California voters had no say in who they were or what laws they enforce. A true Federalist would defend the right of Californians to create their own health care system. A false Federalist would call for Californians to accept whatever system any of the other states happens to come up with.

In many ways, this is worse than a nationalized health care system. At least Californians have representation in Washington. They have some influence on what happens there. California voters have no representation in Phoenix.

2. Obama Attacks a Progressive Health Care Subsidy

Senator Barack Obama took a lot of heat for saying he wanted a tax system that “spreads the wealth” during the debate. Yet, that’s the nature of America’s tax system: it taxes wealthier people more than poorer people. This system is called progressive. A regressive tax system puts a greater burden on lower income families than on the well off ones. In many ways, President George W. Bush’s cuts over the past eight years eased the tax burden more for those earning more than $250,000 than it did for those making less. A core plank in Senator Obama’s platform is to reverse that situation and make the tax system more progressive.

One of the least progressive portions of the tax code concern the treatment of employer sponsored health insurance. That’s because the value of these medical plans (the portion of the premium paid by the employer) is not considered taxable income. This makes employer-sponsored coverage a great deal for employees at all income levels, but it’s a regressive benefit from a tax stand point.

Take the case of Acme Widgets. It currently pays $10,000 a year on each employee’s health insurance plan. The CEO of Acme makes a ton of money and is in the 35 percent tax bracket. This means America’s taxpayers are subsiding her health care to the tune of $3,500. Her assistant makes a lot less and is taxed at a 15 percent rate, resulting in a tax subsidy of $1,500. The receptionist makes the least of all, pays no taxes and receives no tax subsidy. When the rich get more than their lower income colleagues, the tax structure is regressive.

Under Senator McCain’s proposal, the value of health insurance would be considered taxable income. He offsets this lost take home pay with a $2,500 per person ($5,000 per family) refundable tax credit. (Refundable means you get the credit even if you don’t pay taxes.) Senator Obama hammers his opponent for this “gimmickry.” But let’s see how it plays out with our friends at Acme Widgets).

The CEO’s family pays $3,500 more in taxes and gets $5,000 in a health care tax credit for a net of $1,500. The assistant’s family pays $1,500 more in taxes, receives a $5,000 credit and nets $3,500. The receptionist’s family still pays no taxes, but after the credit comes out $5,000 ahead. The well off pay more in taxes than the less well off. That’s a progressive tax system. That’s spreading the wealth.

Having It Both Ways

Senator McCain can’t have it both ways. He can’t be a Federalist when it comes to abortion and a Lowest Common Denominator-ist on health care. Well, actually he can, but he shouldn’t be able to have it both ways.

Senator Obama can’t have it both ways. He can’t be for a progressive income tax system and then attack a proposal to make the treatment of employer sponsored health insurance more progressive. Well, actually he can, but he shouldn’t be able to have it both ways.

Inconsistencies is as common in politics as false smiles and bad coffee. It’s a human undertaking and, by definition, humans tend to be inconsistent. But it is fun to point them out.

Questions McCain and Obama Should Answer on Health Care Reform

Senators John McCain and Barack Obama final debate tonight at Hofstra University will cover a host of issues. Health care reform is should be a major topic of discussion. The financial insecurity Americans feel in the face of the current economic crisis is exacerbated by concerns over health insurance. Can they afford the coverage they have? Will they be uninsured — and uninsurable — if they lose their job?

How the candidates approach health care reform says a great deal about their approach to governing. Senator McCain’s plan is primarily market-driven and uses the regulatory powers of government lightly. Senator Obama’s approach relies more heavily on government intervention and more dramatically regulates carriers, pharmacies and health care providers.

Neither of their health care reform plans are very detailed. And I’ve written before, they demonstrate the candidate’s attitudes and principles towards reform mor than dogmatic policy; they are a starting point for debate rather than specific legislative demands. I’ve also pointed out that both reform packages contain serious flaws. So the two Senators have a lot of explaining to do. Here’s a few questions that would be a good start:

Senator McCain would allow benefit plans approved for sale in any state to be sold in every state. This would lead to a rush to the bottom as carriers file their plans in the most lenient state they can find. It would mean that voters in a state would have no say in how health plans sold to them are regulated. How would Senator McCain mitigate these inevitable outcomes? Does he think states have no right to regulate health insurance sold to its citizens?

Senator Obama would require carriers to sell policies to anyone applying for coverage and prevent them from excluding pre-existing conditions. Yet he does not require adults to buy coverage. They could simply wait until the need for medical care arises and then buy insurance. It’s the equivalent of waiting until after your car hits a tree to buy auto insurance. New York and New Jersey have similar rules. It’s no surprise that the average cost of individual coverage in those states is twice that in California. Senator Obama claims his top priority is to make health care coverage more affordable. How does he reconcile this contradiction?

Senator McCain wants to treat the value of health insurance as taxable income to workers and replace this with a tax credit of $2,500 for an individual and $5,000 for a family. In many ways this would be a more fair and progressive use of the tax code than the status quo. After all, higher paid executives are in higher tax brackets, and consequently receive a bigger tax deduction, than their lower paid colleagues. This would change under Senator McCain’s plan. Executives would be hit with a bigger tax bill, but receive tax credit as everyone else. Given a more progressive system, why does Senator Obama reject this approach?

The tax credit in Senator McCain’s plan is supposed to make buying coverage affordable for America’s families. However, medical inflation increases at a far greater rate than general inflation. Senator McCain’s tax credits don’t increase with inflation at all. Since the cost of medical care is the primary driver of health insurance premiums, the tax credits will cover a smaller percentage of premiums over time. Eventually, the tax credits won’t offset enough of the cost (let alone offset the impact of losing the tax deduction). How would Senator McCain deal with this problem?

Speaking of health care costs, how do Senators McCain and Obama intend to tame that beast? Yes, they both support a greater emphasis on prevention and leveraging technology. Everyone does — and these steps will have an impact. However, an aging population demanding the latest technology for an increasing number of ailments will soon overwhelm this benefit. So, beyond the obvious and widely shared solutions, does either candidate offer any unique approach to controlling rising medical costs?

Senator McCain’s tax credits would allow individuals to purchase coverage in the marketplace; Senator Obma would drive consumers into a government-run “exchange.” What do they like about the other’s approach? What don’t they like about it?

And wouldn’t it be fun to hear them talk about consolidation among hospitals, which in some communities have created health care monopolies? Or discuss whether for-profit health insurance companies have any place in America’s health care system?

The odds of any of these questions being addressed is small. Really, really small. Intead, all we’re likely to get from the debate tonight are snippets of their stump speeches. These will express their mutual desire to  make health care coverage accessible and affordable. Then they’ll attack the other’s approach as “the same deregulation that got us into the banking mess” or “a big step down the road to socialized medicine.”

We deserve to hear more about their health care reform plans. Even a little in-depth dialogue on the subject would be nice. Unlikely, but nice.

The Flawed Health Care Reform Plans of McCain and Obama

Both Republican Senator John McCain and Democratic Senator Barack Obama have put forward substantial healthcare reform plans. They both seek substantial changes in the current system. That they take starkly different approaches reveals a great deal about how their view of the current system and what they perceive the role of government to be in overcoming them. That both health care reform plans are dramatically flawed would seem to be of great concern, but probably isn’t. After all, these are just starting points and whatever new health care system emerges from Washington in the next few years is likely to be significantly different than either of these plans regardless of which candidate is elected.

As I’ve noted previously, the two plans are campaign promises, meaning they are more an expression of the candidates’ attitudes towards reforms than a blue print for legislation. That both starting points are flawed should be of concern, but is neither fatal nor devastating. They are, after all, just starting points.

Interestingly, the biggest flaw in each plan is the mirror image of the other. Senator McCain would encourage consumers to buy coverage in the individual market, assuming their employer isn’t providing health insurance, by offering tax credits — $2,500 for an individual and $5,000 for a family. While this would help many Americans buy coverage, there’s no requirement imposed on health plans to accept them for coverage (although there might be high risk pools under his plan for those turned down by carriers). Senator Obama, on the other hand, requires health plans to accept all applicants, but he fails to require everyone to purchase medical insurance. As has been demonstrated time and again, this is a sure path to higher premiums. Just look at New York and New Jersey where carriers must sell, but consumers need not buy, coverage. The premiums there are twice that in California.

Each health plan has other problems. Senator McCain would allow carriers to shop for the most lenient jurisdiction in which to file their plans, then impose this lack of regulation on other states. It’s competition without representation that is sure to result in consumer distress, political shenanigans that would embarrass an earmark addict, and undermine the credibility of the system.

Senator Obama, on the other hand, wants to create a government-run health care program to compete with private plans. The idea is to increase fair competition, but the result will be anything but fair. When the umpire picks up a bat, he’s rarely called out on strikes. Similarly, when the government competes in a market it regulates, the playing field is invariably tilted in favor of the government. The danger inherent in Senator Obama’s approach is that the government program, given unfair advantages, will squeeze out the private sector. The result will be a government-run system imposed on the nation without the accompanying debate such a policy shift warrants.

At Tuesday’s presidential debate in Tennessee expect to hear a great deal about their health plans. They’ll both be eager to dive into specifics about their own program — and to describe the failings of the other side’s plans. There will be heated exchanges concerning taxes and government takeovers. There will be fierce arguments over regulation versus goverment getting out of the way. As you watch, keep one thing in mind: none of it matters all that much.

Come November 4th one of these candidates will win. Come January 20, 2009 the winner will be sworn in as President of the United States. Unless there’s a miracle, the economic situation will push back meaningful efforts on healthcare reform for at least a few months. Yes, there will be a team put in place with orders to produce a meaningful plan within, let’s say, 100 days. But the real work of shaping the reforms could be delayed several months or a couple of years depending on the nation’s economic health.

Most importantly, once the plan is put forward, it will be changed profoundly by Congress and the new Administration as they respond to the public policy advice and political pressure of the nation. Some form of health care reform is likely to emerge before the next presidential election. Hopefully the major flaws in what’s currently on the table will be addressed — ideally without introducing new and bigger problems.

Will National Health Care Reform Be a Victim of Financial Chaos?

The current financial crisis is a tragedy for those losing their jobs, their homes and their financial security. Secondarily, it represents a failure of public policy that will impact the country for years to come. One of the issues most likely to be dealt a set-back from the bank meltdown is national health care reform.

Whoever is elected president, health care reform high was to be high on their domestic policy agenda. The Democratic nominee, Senator Barack Obama has long made addressing access and affordability a centerpiece of his campaign. While Senator John McCain, the Republican candidate, has been less focused on health care reform, he has repeatedly made clear that he intends to change the status quo. However, recent events have cast a doubt on the underlying principals of their reform packages. Further, those events may have eliminated the resources substantial changes will require.

Senator McCain’s health care reform approach has taken the biggest beating from the financial market turmoil. A self-described “deregulator,” Senator McCain would loosen government oversight of the health care coverage marketplace. For example, he would allow carriers to offer plans in every state so long as they are approved by anystate. This means health insurance companies could shop for the jurisdiction with the weakest regulatory system. The current financial crisis demonstrates the danger of such an approach. Few would argue that it was caused by too much regulation of banks and mortgage companies. Neither party in Congress is likely to support this approach in light of the devastation deregulation of the banking industry helped to create.

Senator Obama’s health care reform plan has also been battered by the mess in the financial markets. He would expand existing government efforts like the State Children’s Health Insurance Program. He would offer health insurance coverage through new government-run health plan. This National Health Insurance Exchanges would be both a participant in the market and a regulator. Yet Fannie Mae and Freddie Mac have underscored the danger of mixing the two roles. The government has a tough enough time regulating markets. To ask it to both umpire the game while also stepping up to the plate would tax the competence of any organization. To ask the government to try this feat is foolhardy,

Then there’s the cost of the candidate’s health care reform plans. Senator McCain claims his reform plan will cost $10 billion; Senator Obama says his will cost $50 billion. Both, no doubt, underestimate the final bill. However, the proposed $700 billion Wall Street rescue plan represents about 5% of the nation’s Gross Domestic Product (GDP) of approximately 13.8 trillion in 2007. It dwarfs the astronomical federal deficit of $482 billion. It is, in other words, a vacumn cleaner that will suck up much of the resources needed to implement any kind of meaningful reform.

Senator Obama recognizes this. According to the Associated Press, Senator Obama said he “remains committed to addressing needs in health care, education and energy.” However, he indicated tax cuts for the middle class will be his top priority, noting they are “particularly important to strengthen an economy sliding into economic recession.

Health care reform was never going to be an easy issue for the next president to tackle. Finding the right role for government and the right level of regulation was always going to be a challenge. Given the new economic landscape and the fall-out from the current financial crisis, fashioning meaningful, comprehensive health care reform will be even more difficult.

What this means is that national health care reform will be delayed. It will also be more contentious and a greater challenge than previously feared.

Health Care Reform and the GOP Platform

Party platforms are like cotton candy. They’re tasty and sticky (if a bit too sweet) for a brief moment of time and then they’re forgotten. Who can recall a lawmaker proclaiming their support for a measure because it was consistent with her party platform? Nonetheless, in a recent post I noted the Democratic Party platform’s rejection of a single-payer, government-run system.  Which got me thinking about what the Republican Party platform had to say about health care reform.

The answer is: nothing much different than what John McCain has been saying. Entitled “Health Care Reform: Putting Patients First.” the platform begins with a First Principle: Do No Harm. Here, the GOP explicitly states the party “will not replace the current system with the staggering inefficiency, maddening irrationality, and uncontrollable costs of a government monopoly.” No surprise there. It follows with a call for “patient control and portability.” Here’s where the paty calls for lowering the cost of coverage and calls for empowering employees “the option of owning coverage that is not tied to their job.” They call for eliminating the current difference in tax benefits between insureds who buy their coverage on their own or obtain it through an employer.

The rest of the platform is fairly straightforward calls for lowering costs through prevention, transparency, reducing frivolous malpractice lawsuits, leveraging technology, support of medical research and identifying best practices. These are fairly common proposals and unlikely to raise the hackles of many voters. There are, however, two controversial items.

Declaring the family as the basic unit of society, the Republican platform supports “parental rights to consent to medical treatment for their children including mental health treatment, drug treatment, alcohol treatment, and treatment involving pregnancy, contraceptives, and abortion.” I’m not sure what this means in practice. It doesn’t sound like it would prevent carriers from covering treatment for these services to minors, only that the parent could decide not to take advantage of them. Other than in life threatening situations I’m not aware of anyone forcing a parent to take their addicted child in for drug treatment. So it’s unclear to me whether this is simply a family-friendly statement or if it’s attacking a serious problem.

The second controversial item is a call to “Drive Costs Down With Interstate Competition.” This reflects a pillar of Senator John McCain’s health care reform plan. “A state-regulated national market for health insurance means more competition, more choice, and lower costs.  Families – as well as fraternal societies, churches and community groups, and small employers – should be able to purchase policies across state lines.” I’ve expressed surprise that this approach would find favor in the Republican party. Usually the GOP is in the forefront of allowing states to set their own rules. By allowing a health plan filed and approved in one state to be sold in every other state they undermine the ability of every state to create their own approach to health care coverage. This proposal would encourage jurisdiction shopping in which health plans would seek approval for their offerings in the states with the most lenient regulation and loosest rules.

The goal of encouraging competition is a good one. Even the idea of a national platform of health insurance rules has merit. In many respects, however, the GOP approach of “pick a state, any state” is the worst of all worlds. Moving regulation of health insurance products from the states to the federal government would provide uniformity (meaning products would meet minimum standards regardless of where they’re sold), but at the expense of accepting regulators that are more distant from consumers. The current patchwork of state regulation creates 51 silos that makes achieving best practices more difficult and lessens competition, but it keeps decision making closer to consumers. Allowing jurisdiction shopping neuters the ability of consumers to influence regulators while doing little to achieve uniformity in rules and offerings.

While the interstate competition provision is, in my opinion at least, a violation of the principle of “doing no harm,” the rest of the GOP platform is consistent with the no new taxes, keep government out of it philosophy that is at the foundation of Republican policy making. In that regard it’s not a surprising document. Given the insecurity many Americans feel about their continued access to health care, I am surprised that the Republican Platform doesn’t emphasize the desire to reduce the number of uninsured in the country. On the other hand, by elevating portability to the core of their proposal, they are seeking to reassure those now afraid to change — or lose — their jobs and thereby lose their health insurance.

McCain and Obama Health Plans More Attitude Than Policy

Experts are weighing in on the health care reform proposals put forward by presidential candidates Senators John McCain and Barack Obama. That they’re finding them inadequate is not surprising. They are, after all, campaign promises, not legislation. Nonetheless, they offer an important glimpse into how the candidates approach the issue.

Most recently, the Health Affairs blog features an analysis of the McCain plan by professors at the University of Michigan and another on the Obama reform proposals by a authors affiliated with the American enterprise Institute, Project HOPE and a volunteer adviser to the McCain campaign.

The conclusion of each article is that each proposal is inadequate, too expensive (either for consumers or the government), and could do more harm than good. In other words, no surprises. What they fail to note is that the health care reform proposals, as they stand now, are more about attitude than policy. They do a much better job of outlining the preferences and approach of the candidates than they do in creating a workable structure to improve America’s health care system.

Senator McCain focuses on portability of coverage for those who have it; or Obama  on access. Senator McCain’s plan would cost far less than Senator Obama’s, although the Democrat’s plan would bring far more people into the system than the Republican’s.

What they tell us is that Senator McCain prefers solutions that empowers consumers to make their own health care decisions while Senator Obama is comfortable with a more forceful (some would say intrusive) role for the federal government. Interestingly, both are looking to chip away at the current employer-centric American health care system with Senator McCain shifting more toward individual coverage and Senator Obama introducing more government intervention.

There are some surprises in each plan. Senator McCain would allow carriers to seek approval of their plans in one state and sell them in others. Republicans usually support state rights yet this proposal would prevent a state from taking steps to protect their citizen’s interests regarding health care coverage. In fact, it would empower health insurance companies to shop the country for the most lenient regulators and regulations. Meanwhile, Senator Obama has repudiated advocates of his own party who call for a government-run, single payer health care system. This no doubt disappoints many of his most ardent supporters, including many of the unions supporting him, but it does recognize the reality that Americans are uncomfortable turning their health care over to the government.

Either Senator McCain or Senator Obama is going to be President of the United States in four months. Health care reform will be high on their “Things To Do” list. Voters should analyzetheir campaign promises, but need to take consider them in the context of reality. Attitude influences policy, but it’s not the same thing. The health care reform debate will be long and the compromises numerous. Neither candidate will be in a position to impose their reform plan on Congress. That’s a good thing.

Single Payer Losing Ground

This should be the best of times for advocates of a single payer health care system in America. The environment for radical change has never been better. After years of hammering at problems in the current system, there is general agreement on the need for substantial change. When asked what single issue will most impact their vote for president, a substantial number of voters have consistently cited health care according to the Kaiser Health Tracking Polls. For example, in the August 2008 survey, 16% cited health care as their determinative issue, ranking this concern behind only the Economy (49%), Iraq (25%) and and Gas Prices 18%). Significantly, health care reform is a critical part of the economy and 24% of the respondents said paying for health care and health insurance was a serious problem. 

Meanwhile, legislation to create a single payer system has been introduced in Congress and several states. In California, the Legislature passed a bill to create a state-run health plan:(Senate Bill 840 by Senator Sheila Kuehl. (It currently is awaiting a veto by Governor Arnold Schwarzenegger).

Given all this momentum for radical change, you would think a government-run system would be a major issue in the presidential campaign, yet it’s not. Clearly, Senator John McCain, the Republican nominee is not going to support a single payer system. What’s significant, however, is that Democrats are not advocating this approach either. Neither the Democratic nominee, Senator Barack Obama. nor his chief rival through the primary season, Senator Hillary Clinton, called for a government takeover of America’s health care system. Even the Democratic Party platform rejects a single payer system.

The 2008 Democratic National Platform, Renewing America’s Promise, gives its approach to heath care reform considerable prominence. Here’s some meaningful excerpts from the document:

“Democrats are united around a commitment that every American man, woman and child be guaranteed affordable, comprehensive healthcare.”

Our vision includes: Covering All Americans and Providing Real Choices of Affordable Health Insurance Options.  Families and individuals should have the option of keeping the coverage they have or choosing from a wide array of health insurance plans, including many private health insurance options and a public plan. Coverage should be made affordable for all Americans with subsidies provided through tax credits and other means.”

Shared Responsibility. health care should be a shared responsibility between employers, workers, insurers, providers and government. All Americans should have coverage they can afford; employers should have incentives to provide coverage to their workers; insurers and providers should ensure high quality affordable care; and the government should ensure that health insurance is affordable and provides meaningful coverage. As affordable coverage is made available, individuals should purchase health insurance and take steps to lead healthy lives.”

Meaningful Benefits. Families should have health insurance coverage similar to what Members of Congress enjoy.”

This is not the language of single payer advocates. Yes, the Democrats call for coverage for all Americans that is “similar to what Members of Congress enjoy.” And they want to protect Americans from “the burden of skyrocketing premiums, unaffordable deductibles or benefit limits that leave them at financial risk when they become sick.” So we’re not talking about a “hands-off” approach here.

But we’re also not talking about a single payer system. Advocates of SB 840 claim as one of its chief benefits the elimination of health insurers and HMOs. That’s a long way from the platform’s call for “keeping private health insurance options” available.

There will be robust debate in Washington concerning health care reform. As I’ve written previously, a bipartisan coalition of Senators is waiting for the new president with their own health care reform package. Single Payer advocates are not going away. They will throw their proposals into the mix, but this won’t change the reality: the Democratic nominee and his party’s platform have rejected the single payer approach.

So here’s the question: if single payer advocates can’t win when the political stars are so strongly aligned in their favor, will they ever win?

My take is that the stars are realigning in such a way to make the answer a resounding “no.” Over the next two-to-four years there is a real possibility that Congress and the new president will pass meaningful, comprehensive health care reform. That’s another two-to-four years in which the cracks in existing single payer systems around the world will deepen, broaden and become more apparent. Faced with a new alternative to what will increasingly be seen as a nonviable approach at hand being rolled out, single payer advocates won’t go away, but they won’t be successful either.

Health Care Still Vital Issue in 2008 Campaign

The Kaiser Family Foundation has been issuing quarterly tracking polls on the issues voters want presidential candidates to address. Health care has been the top domestic issue voters are focused on (Iraq has been the top issue). But now that the mortgage crisis, gas prices and a faltering stock market has had more time to impact family’s sense of financial security, the economy has taken on greater importance to voters.

In the March 2008 Kaiser Health Tracking Poll 45 percent of the voters listed the economy as one of the two issues they would most like to hear presidential candidates talk about. 32 percent of the voters listed Iraq and 28 percent mentioned health care. Immigration followed with 14 percent, education with seven percent and terrorism six percent.

The economy topped the list for Democrats, Republicans and Independents alike. For Democrats, however, health care was the second most mentioned issue followed by Iraq.

In the Kaiser poll published in December 2007, Iraq was the top issue, mentioned by 35 percent of those surveyed, followed by health care mentioned by 30 percent and then the economy, cited by 21 percent of the participants. Democrats, Republicans and Independents all ranked the top three issue in this order.

When asked what single issue will most drive their choice for the next president, the economy was at the top of the list for all voters, Democrats, Republicans and Independents. For Democrats and Independents, the next two issues were Iraq and health care; for GOP voters it was terrorism and Iraq.

In March, the top issue for all voters was Iraq, followed by the economy and health care for Republicans and Independents, while Democrats selected health care and the economy as their next two most important issues.

While the economy has supplanted health care as the top domestic issue among voters, health care is still a powerful issue. However, health care costs are a factor in how people feel about the economy. 10 percent of voters cited health care costs as the single most important economic issue facing you and your family. This trailed inflation (26 percent), high taxes (13 percent), and the price of gasoline (11 percent), but it was higher than items like problems getting a good-paying job or a raise in pay (nine percent) and the cost of housing (six percent).

Health care reform remains a critical issue, especially among Democrats and Independents. When evaluating health care reform proposals, 58 percent of what the Kaiser Foundation calls “health-focused voters” want to provide health insurance for nearly all of the uninsured, even if it involves a substantial increase in spending. 30 percent support a more limited plan that would cover only some of the uninsured, but involve less spending.

In 1992, the sign in the Clinton campaign war room read “It’s the economy, stupid.” What’s less well known is the addendum to the sign that read, “And it’s health care, too.” History looks like it’s repeating itself (although this time it may not be a Clinton war room). While Iraq will remain a critical issue, the economy and health care are even more relevant to voters’ decisions. That could change, but barring a terrorist attack on American soil, the voters are increasingly focused on the economy and remain strongly interested in the candidate’s positions on health care.

In other words, future debates will sound a lot like the recent debates. 

Congressional Health Care Reform Plan Waiting for New President

During their Ohio debate Tuesday night, Senator Hillary Clinton and Senator Barack Obama spent the opening 16 minutes diving deep into the minutia of their health care reform plans. The public has heard the debate many times before. One might be forgiven for believing the differences actually matter. They don’t.

The reality is that health care reform will be a top priority for either of these candidates should they gain the White House. What plan eventually emerges will be negotiated, compromised and updated so much and so often, it may bear little resemblance to the proposals Senators Clinton and Obama have put on the table. And that’s fine. No one has the secret formula. Crafting the best health care platform for America should involve a great many people not yet heard from.

Then there’s the health care reform proposal already waiting for the new president. Sponsored by Democratic Senator Ron Wyden and Republican Senator Bob Bennett, the Healthy Americans Act is the most bi-partisan and prominent bill stewing in the current Congress — or any recent one, for that matter.  Supported by a dozen senators, six from each party, in many ways it goes much further than the plans being promoted by the Democratic presidential candidates. And compared to Senator John McCain’s market-based reform plan, it’s downright radical.

Twelve percent of the Senate is a long way from a majority. But it’s a start. Even Senators Wyden and Bennett don’t agree with every aspect of their bill. The plan requires all Americans to buy coverage. It does away with the preferential tax treatment of employer-based coverage, forcing individuals to purchase their own coverage through regional purchasing pools. While it’s not a single-payer system, those pools do mean multiple governmental agencies will be running the show.

The Healthy Americans Act is, as it stands, seriously flawed. But that’s not the point. The details of this legislation don’t matter any more than the specifics of the candidate’s proposals. What matters is the existence of a bi-partisan coalition of Senators waiting for a president who is serious about building a consensus to appear on the scene. That’s fertile ground for a serious debate and equally serious negotiations about a complex and vital issue. And that’s good news.

Seeds of 1993 Health Care Plan Defeat Planted by Clinton

At the Democratic debate in Austin last week, Senator Hillary Clinton declared her experience in the 1990s in developing and promoting health care reform would serve her well if elected president. She claimed it would help her stand up to the special interests. Senator Barack Obama responded it was her approach to health care reform that doomed the effort. He is right. She is wrong.

Senator Clinton blames special interests, especially the insurance companies, for defeating the health care reform package she developed for her husband’s administration in 1993-94. There’s some merit to the claim. Tens of millions of dollars went to lobbying, advertising and organizing against the proposal. But while that level of spending would have made passage more difficult, if the plan had been well conceived and well promoted it would not have been enough. With Democrats in the White House and controlling Congress, the right plan, developed and sold in the right way should have been successful. And that was the problem. Under now-Senator Clinton’s leadership, the plan was developed in secrecy and presented to the public and decision makers with unforgivable ineptitude.

Senator Clinton talks a lot about reaching out to all points of view to fashion consensus policies and programs. Now. Then, however, it was her way or the highway. In late-1992 she began assembling a large group of very smart people to develop her health care reform package. They sequestered themselves in Washington and talked among themselves. Occasionally they’d seek input from outsiders. But like Ken Kesey’s Merry Pranksters, you were either on the bus or off the bus. And if you were off the bus, your opinions didn’t matter.

This created two problems. First, developing policy in an echo chamber rarely works. The results may look good when considered in a vacumn, but when exposed to the real world, one flaw cascades through the interwoven assumptions, reducing the whole to dust. The Clinton health care plan of 1993 and 1994 was beautiful to behold, an exquisite example of theoretical policy. It was also fragile. Because the Clinton administration was unwilling to accept advice or input or, heaven forbid, changes, from the outside, it lacked a foundation to withstand deep scrutiny. Much to the surprise of the Clinton health care working group, their plan was flawed. And those flaws led to the unravelling of the whole.

Second, excluding members of Congress from the process was just stupid. By ignoring even Democrats in Congress, there was no one at the other end of Pennsylvania Avenue who had any stake in the outcome. In fact, it merely engendered hostility. I participated in three Congressional hearings, representing the National Association of Health Underwriters (NAHU is an association for health insurance agents and other professionals). None of the questioning dived deeply into the Clinton health care plan. There was plenty of questions concerning other reform proposals, but our criticism of the Administration’s plan was pretty well accepted by the Congressional panels.

The lack of an open process is one of the reasons Assembly Bill X1-1 failed in the California legislature. To their credit, the staff of Governor Arnold Schwarzenegger consulted with far more “outsiders” than the Clinton health care task force. But these were seriel discussions held in private. No one really knew what the entire package looked like until months into the Year of Health Care Reform. As a result, when the legislation reached the State Senate, there were few there who had a stake in its passage. When faced with the state’s budget crisis, it was easier for them to let health care reform slide away.

The lesson is clear: developing health care reform requires an open, inclusive process. Every opinion and perspective needs to be represented. Senator Obama gets this. Unlike Senator John Edwards, who claimed he wouldn’t let the insurance industry participate in developing his health care reform legislation, Senator Obama said they’d have a seat at the table, they just wouldn’t be able to buy them all.

It’s this approach to openness and collaboration that holds the greatest promise of success. Senator Clinton tried the old way. It didn’t work. Her continuing the blame the special interests instead of her own mistakes for the defeat of the Clinton Administration’s health care plan shows she may not have learned the right lesson. And that’s another reason she’s no longer the frontrunner for the Democratic nomination.