Clinton’s health care plan only a first draft

By RONALD BROWNSTEIN

LOS ANGELES TIMES

Much of the commentary on Sen. Hillary Rodham Clinton’s new healthcare proposal has focused on what she learned from the collapse of the universal coverage plan she designed during her husband’s first term as president. But a larger legacy of failure looms over her carefully constructed new initiative.

Over the last 15 years, each of the three most ambitious efforts to reshape domestic policy have failed, badly burning their sponsors. The healthcare plan the Clintons proposed in 1993 died without ever reaching a vote on the House or Senate floor. So did President Bush’s 2005 proposal to restructure Social Security. Newt Gingrich and the Republican Congress passed their blueprint to reorder the federal budget in 1995, but they were buried under a public backlash after they shut down the federal government in an unsuccessful effort to force President Clinton to sign it.

In each instance, the party driving the change provoked nearly united resistance from the other party and its allied interest groups. Ultimately that opposition derailed each proposal and ignited an electoral backlash. The unmistakable lesson is that in a country so closely divided, sweeping change — of the sort Hillary Clinton proposed this week — cannot succeed without substantial bipartisan agreement.

Measured against that standard, Clinton’s health plan represents an impressive first draft, though the final grade is necessarily still out. She’s saying the right things about giving Congress more leeway and consulting more broadly than she did last time. As important, she has clearly structured her new plan to try to respond to the principal complaints about her old one.

Shock troops

Small business provided the shock troops against the 1993 plan because it required all companies to contribute to insuring their workers. This time, the plan not only exempts smaller companies (probably at around 25 employees or less) frompaying for coverage but provides generous tax credits for those that do provide insurance.

Critics crucified the 1993 plan with the charge that it would have reduced choices for the roughly 85 percent of Americans with health insurance. The new plan allows those satisfied with their coverage to keep it. But it also allows those unhappy with their insurance (as well as the uninsured) to pick from the same broad menu of private plans offered to federal employees, with tax credits to help families cover the cost. Among the choices would be a government-run competitor to private insurance. The 1993 plan regulated health insurance companies so heavily that it virtually converted them into public utilities. The companies responded with an advertising barrage — remember Harry and Louise? — that perforated the proposal.

This time, Clinton is offering insurers a grand bargain. She would bar them from denying coverage to people with health problems or dropping those who develop them. In return, she would require all Americans to buy insurance (with government help); that would better balance the insurance companies’ risk by forcing the young and healthy into the system. It would also, not incidentally, transform the 47 million uninsured in this country into consumers for the industry’s products.

So, although Clinton recognizes that “there will be features” insurance companies won’t like, and that many Republicans will recoil from any expansion of government’s role, she’s optimistic the plan can attract a coalition that includes elements of both groups. “People are much readier for change than they were in 1993 and 1994,” she said in an interview. “There is a greater appreciation of what is at stake.”

Amid the hurricane of words responding to Clinton’s proposal, two reactions suggest that her analysis isn’t just wishful thinking. In 1994, John Breaux, a skilled deal-making Democratic senator from Louisiana, helped design a bipartisan Senate alternative to the Clinton plan, which he considered too partisan and rigid. Breaux, now a lobbyist, says her new proposal “is something that can find support in both parties.”

‘Whole new game’

The other intriguing response comes from Karen Ignagni, president of America’s Health Insurance Plans, the industry trade association. She didn’t like the rhetorical broadsides that Clinton gratuitously directed at the industry on Monday. But Ignagni praised Clinton’s tax credit and said her insurance reforms might be acceptable to insurers as long as they are linked to a mandate on individuals to buy coverage. “It’s a whole new game when you bring everyone into the system,” Ignagni said.

Much of the Democratic healthcare debate is turning on which candidate will be toughest on insurance and drug companies. The better question is who is shrewd enough to reform those companies ’ practices without provoking them into a full-scale war that would also pre-empt the possibility of meaningful support from congressional Republicans.

X Brownstein is the Times’ national affairs columnist.