Paul Krugman Clinton, Obama, Insurance
The difference between the health care plans of Hillary Clinton and Barack Obama could well be the difference between achieving universal health coverage and falling far short.
US Senators Barack Obama and Hillary Clinton at a Democratic presidential primary campaign debate in Los Angeles last week
But as Ive tried to explain in previous columns, there really is a big difference between the candidates approaches. And new research, just released, confirms what Ive been saying: the difference between the plans could well be the difference between achieving universal health coverage -- a key progressive goal -- and falling far short.
Specifically, new estimates say that a plan resembling Mrs. Clintons would cover almost twice as many of those now uninsured as a plan resembling Mr. Obamas -- at only slightly higher cost.
Lets talk about how the plans compare.
Both plans require that private insurers offer policies to everyone, regardless of medical history. Both also allow people to buy into government-offered insurance instead.
And both plans seek to make insurance affordable to lower-income Americans. The Clinton plan is, however, more explicit about affordability, promising to limit insurance costs as a percentage of family income. And it also seems to include more funds for subsidies.
But the big difference is mandates: the Clinton plan requires that everyone have insurance; the Obama plan doesnt.
Mr. Obama claims that people will buy insurance if it becomes affordable. Unfortunately, the evidence says otherwise.
After all, we already have programs that make health insurance free or very cheap to many low-income Americans, without requiring that they sign up. And many of those eligible fail, for whatever reason, to enroll.
An Obama-type plan would also face the problem of healthy people who decide to take their chances or dont sign up until they develop medical problems, thereby raising premiums for everyone else. Mr. Obama, contradicting his earlier assertions that affordability is the only bar to coverage, is now talking about penalizing those who delay signing up -- but its not clear how this would work.
So the Obama plan would leave more people uninsured than the Clinton plan. How big is the difference?
To answer this question you need to make a detailed analysis of health care decisions. Thats what Jonathan Gruber of M.I.T., one of Americas leading health care economists, does in a new paper.
Mr. Gruber finds that a plan without mandates, broadly resembling the Obama plan, would cover 23 million of those currently uninsured, at a taxpayer cost of $102 billion (69 billion) per year. An otherwise identical plan with mandates would cover 45 million of the uninsured -- essentially everyone -- at a taxpayer cost of $124 billion. Over all, the Obama-type plan would cost $4,400 per newly insured person, the Clinton-type plan only $2,700.
That doesnt look like a trivial difference to me. One plan achieves more or less universal coverage; the other, although it costs more than 80 percent as much, covers only about half of those currently uninsured.
As with any economic analysis, Mr. Grubers results are only as good as his model. But theyre consistent with the results of other analyses, such as a 2003 study, commissioned by the Robert Wood Johnson Foundation, that compared health reform plans and found that mandates made a big difference both to success in covering the uninsured and to cost-effectiveness.
And thats why many health care experts like Mr. Gruber strongly support mandates.
Now, some might argue that none of this matters, because the legislation presidents actually manage to get enacted often bears little resemblance to their campaign proposals. And there is, indeed, no guarantee that Mrs. Clinton would, if elected, be able to pass anything like her current health care plan.
But while its easy to see how the Clinton plan could end up being eviscerated, its hard to see how the hole in the Obama plan can be repaired. Why? Because Mr. Obamas campaigning on the health care issue has sabotaged his own prospects.
You see, the Obama campaign has demonized the idea of mandates -- most recently in a scare-tactics mailer sent to voters that bears a striking resemblance to the Harry and Louise ads run by the insurance lobby in 1993, ads that helped undermine our last chance at getting universal health care.
If Mr. Obama gets to the White House and tries to achieve universal coverage, hell find that it cant be done without mandates -- but if he tries to institute mandates, the enemies of reform will use his own words against him.
If you combine the economic analysis with these political realities, heres what I think it says: If Mrs. Clinton gets the Democratic nomination, there is some chance -- nobody knows how big -- that well get universal health care in the next administration. If Mr. Obama gets the nomination, it just wont happen.