THERE has been a great deal of speculation about the
deliberations of Hillary Rodham Clinton's Task Force on Health
Care. It is generally thought that the package to be unveiled in
May will be a version of what is called "managed competition," an
outline of which was included in "Mandate for Change," published by
The Progressive Policy Institute (PPI). This volume received the
seal of approval from President Clinton and its proposals offer
more than a glimpse at the president's policy preferences.
Ironically, managed competition would eliminate nearly all real
competition from health-insurance markets.
Imagine owning a business in an industry where the government
requires everyone to purchase your product - pretty nice, right?
Better still, imagine that potential competitors could only enter
your market after meeting stringent requirements set by a team of
government bureaucrats. In other words, you have very little to
fear from up-start companies anxious to take away your customers.
Now, imagine what it would be like to be a consumer forced by
the government to participate in this market. This would be health
insurance under managed competition.
Managed competition would create a managed monopoly that, if
attempted privately in another industry, would clearly violate
At the center of managed competition would be a
government-protected cartel in health insurance. A national
health-care board would organize and enforce the cartel.
The board would decide which health-insurance plans could
participate in the market, and officially sanctioned plans, called
AHPs (Accountable Health Plans), would have all dimensions of their
product defined by the governing body. As described by PPI's Jeremy
Rosner, the board "... would define both the medical procedures
covered and the financial parameters, such as deductibles,
copayments, and annual caps on out-of-pocket costs."
In the name of universal coverage, all US citizens would be
required to purchase, at a minimum, an AHP-provided plan. This
transforms less-coercive concepts, such as the "right to health
care" or "access to health coverage" into a mandate.
As part of this obligation Americans would be denied the right
to choose from other plans or to choose no plan at all.
To compel the purchase of health insurance, the PPI plan
proposes to enlist the most intimidating enforcer in Washington,
the Internal Revenue Service (IRS). It notes that "to help achieve
universal coverage, all taxpayers would be required to enclose a
certificate as part of their federal income tax returns proving
they had obtained coverage."
Furthermore, the tax code itself would be invoked to ensure that
only cartel-member plans would be purchased by consumers. Under
present law, employers can deduct all employer-paid health-care
premiums for tax purposes. Most managed-competition plans propose
to limit or eliminate this deduction. …