Health Care - and Less Two Views of Clinton's Approach to Health-Care Reform

By Roy E. Cordato. Roy E. Cordato is a senior economist with the Institute ), a. nonprofit, tax-exempt research organization . | The Christian Science Monitor, March 26, 1993 | Go to article overview

Health Care - and Less Two Views of Clinton's Approach to Health-Care Reform


Roy E. Cordato. Roy E. Cordato is a senior economist with the Institute ), a. nonprofit, tax-exempt research organization ., The Christian Science Monitor


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 antitrust laws.

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. …

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